A whole new year before us ... Good luck to all of us...

First of all Happy New Year!

I wish much luck, success and health to all readers in 2006.

After more than tree-week break I come again to my bourse notes. During the holidays the stock markets could rise further. A lot of reviews and comments of the past year appeared - all in all it was a pleasing year for all those, who speculated on rising courses and a bull market - especially in Europe, where I am mainly invested, an the most other international markets. The US stocks could not provide substantial performance in the last 12 months (on dollar basis), but the year was all in all positive. And if you have a positive performance on your stocks, you should be happy, right?

How will it be now in 2006? We can be surprised…

Although the broad "market barometers" rose, this development did not exceed the growth of profits and other underlying fundamental data. Thus, the large indices remain at the valuation level as of one year ago and even better. I generally avoid to say the stocks movement is "fundamentally supported" (or “justified”), because the valuation after all is not (that) determinant. Nevertheless this is a "reassuring" fact.

However, much more important to me is the state of the interest rates particularly at the long end, which in this year – “unexpectedly” to most analysts – did not substantially change. Thus, the lack of investment opportunities for the world-wide liquidity (and large savings volumes - mainly from the Asiatic area, and also, from the moderately growing Western European industrial nations such as Germany) remain considerable and the basis for valuation of stocks favorable. The rate cycle in the USA had of course affected and absorbed the (over-) liquidity somewhat. In this environment the American indexes could not go far last year, and - once again "surprisingly" - the dollar was strong. Now they already talk about the close end of the interest rate hikes, and the stock market anticipates already such development with optimism. As long as rates remain low I would count on the continuing of the rally.

However - a whole new year is before us. In any case, I wish much success to everyone...


stocks bourse 2006