Time To Cash In Your Investments -mercbelize

October being favorite for bears in global financial market right from crashes in 1929

, 1987, 1997 and the great meltdown of 2008 is recurring in the year 2012 with Indices and Commodities starting their downtrend once again. With US Presidential election scheduled to take place on November 6,Institutional Investors are likely to liquidate their holdings into cash on uncertainty mounting fiscal cliff in US and slump in major economiessuch as Europe, China and Japan. Window dressing for 2012 from Fund Managers, Portfolio Managers and Major Institutional Investors are likely to start their action from the month of October itself to reap massive gains made from Stock markets from June to September. A quick view on market return for major Stock market indices for the last 4 months will give you the extent of solid gains made by Institutional Investors within this period-Nearly 14% from US, 26.6% from Germany, 22.7% from France and 13.4% from UK and the list continues to go longer on expectation rally that saw major Central banks like ECB and Federal Reserve calming investors with major announcements such as QE3.

Rationale for Divestment

No major surprise announcements are expected to come from Central Banks in US and Europe as QE3 announcements still lacks action rather than model.

US November election will made investors to set aside cash holdings as the dangerous Fiscal cliff whether Mitt Romney or Barack Obama comes into power- will be impacted by the new term for the Worlds largest economy.

Fiscal cliff in US will impact much to global economy as tax hike and spending cuts in US certainly limit export orders which will be a major blow to developed and developing economies.

Expectation of poor Q4 Earnings and dismal guidance from Companies in US and Europe will make investors think twice.

High yields for European countries like Spain, Italy and Greece will prompt Rating Agencies to lower ratings, which will make Institutional investors reducing their portfolio holdings.

For the time being, investors are extremely cautious with global markets on extremely stretched valuations. As on October 22, 2012, S&P 500 is trading at a PE at 17.3, Dow at 15.4 and Nasdaq at a hefty PE ratio of 21.2 despite negative forecast from majority of Corporates, leaving many investors scratching their heads. European indices are also trading in the expensive valuation with DAX 30 trading at a PE of 17, CAC 40 having PE at 18 and U.Ks FTSE 100 PE at 21 despite low economic growth forecast and unsolved debt crisis. Profit-booking by Institutional investors are likely to be happen in all these Indices ahead of Year end.

About MercBelize

MercBelize is an 100% online exchange committed to provide a world-class mercantile exchange domiciled in Belize, licensed by International Financial Services Commission of Belize. CFD and Spot trading is being promoted by MercBelize to our extensive client base across the globe. We provide global exchange trading system with highly automated trading platforms including best charting tools available in the industry having multiple Trader workstations where traders can handle multiple accounts from a single platform anywhere in the world. www.mercbelize.com

by: Merc

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