Tags: Stocks | Investors | Wary | prices

Stocks Double in Three Years but Investors Stay Wary

Wednesday, 07 March 2012 12:19 PM

Stock prices have jumped twofold in the last three years although investors remain on the sidelines, wary of jumping back in due to relentless economic uncertainty.

The Standard & Poor's 500 broad stock index dipped to 666.79 on March 6, 2009, and three years later, the index was up at 1,343.36.

The climb has been bumpy thanks to uncertainty stemming from the U.S. debt-ceiling impasse, the Greek debt crisis and Middle East unrest on top of a weak economy.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"On the main street level, people are still worried about jobs and the economy," says Doreen Mogavero, president and CEO of Mogavero Lee & Co., according to CNBC.

Corporate fundamentals, meanwhile, look strong.

"Today, you’re looking at companies that are lean, have tons of cash on their balance sheets and are much better equipped to weather another down cycle if we were to have one," Mogavero adds.

Others add it's not too late for investors to jump despite stock-market gains.

"The U.S. economy is gaining solid footage here," says Peter Cardillo, chief market economist at Rockwell Global Capital, CNBC adds.

"I don’t share the view that the market is headed for a correction because the economy is faring better and it’s also encouraging to see that consumers are continuing to spend."

The S&P 500 took a massive hit recently thanks to another setback involving Greece restructuring its debts with private creditors.

Failure to do so could mean a messy default in Greece, which would send shockwaves to financial markets worldwide, another uncertainty grabbing headlines.

"Investors typically dislike uncertainty more than they dislike bad news," Michael Koskuba, who helps oversee $28 billion at Victory Capital Management Inc. in New York, tells Bloomberg.

"There’s concern about whether or not there will be enough participants in the Greek debt swap. The fear is that if it doesn’t happen the way most want it to happen, there’s potential for a greater recession in Europe."

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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Wednesday, 07 March 2012 12:19 PM
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