Stocks in most regions of the world pulled back sharply today in response to investors’ concerns about the potential destruction of several nuclear power plants in Japan and a future slowdown in worldwide economic growth.
However, stock market indices for companies that operate primarily in the United States, Europe, and the world’s major emerging economies of Brazil, China, and India held above some key price-support levels as astute investors took advantage of today’s stock market pullback to add to their stock positions.
Meanwhile, the Federal Reserve Bank of New York announced this morning that manufacturing activity in the tri-state area of New York, Connecticut, and New Jersey rose during the first half of March at the fastest in nine months.
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Separately, the National Association of Home Builders reported today that the outlook for the U.S. housing market improved during the first 15 days of March for the first time since October 2010.
In other economic developments, sales of goods and services at U.S. retailers rose for the eighth month in a row during February, as employment prospects in the United States rose for the fifth consecutive month.
In regard to recent economic developments in Brazil, China, and India, government officials in those countries announced during the past two weeks that industrial production in those regions of the world increased during the past couple of months and that recent surveys of purchasing managers in those countries indicates that manufacturing activity in those regions will likely continue to increase during the months ahead.
In light of the positive economic developments mentioned above, my experience suggests that now is a good time for investors to add to their stock portfolios.
Although most individual investors often react emotionally to the type of tragic events that occurred in Japan during the past few days by selling their stock market holdings, my research indicates that now is a time for investors to add to their stock portfolios.
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