Tags: us | stocks | investing

The End for U.S. Stocks? Not Hardly

By Julie Crawshaw   |   Thursday, 22 Oct 2009 11:42 AM

Every nation has it rise and fall — and while the recent devaluation of the U.S. dollar has some investors wondering if investing in America is still wise, most analysts appear optimistic about continued U.S. fortunes.

Those surveyed by Bloomberg estimate profits for S&P 500 companies will rebound 65 percent in the last three months of this year.

“The stock market wants to move higher,” Oppenheimer Funds money manager Michael Levine said.

“Corporate earnings have been in line or better-than-expected. I see a positive tone through the end of the year.”

Even more encouraging is a report that Pacific Investment Management Co., the world’s biggest manager of bond funds, is considering adding stocks for the first time in its history.

Investing in foreign stocks is a wise move now, some say.

The products of many international firms are just as familiar to Americans as those of domestic companies. Nestle, Sony and Panasonic are located on foreign soil, but all offer products most U.S. consumers use.

When investing internationally, analysts advise looking for companies with good growth records and good cash flows, located in countries that are politically stable.

Even then, developments can be challenging: Brazil’s government just announced it will levy a 2 percent tax on Brazilian real-denominated, fixed-income securities and on purchases of stocks in order “to avoid an excess speculation in the stock market and in capital markets” Brazilian finance minister Guido Mantega told reporters.

According to commodityonline.com, investors interested in buying currencies should be aware that the U.S. dollar is expected to remain choppy and could decline further against major currencies in the short term.

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