So the US government has bailed out the countries two major mortgage lenders, will this be the catalyst to some new found confidence and stability in these hardened times? The major stock markets from around the world staged a major rally on the news, the London stock exchange even broke down as it could not cope with the demand, so will this become a sustained rise and are these stock markets set for a very good 2009?
Experts are still suggesting that we have not seen the back of this credit crunch. Only yesterday the head of Nationwide, the largest building society in the UK, stated that he believed that house prices would fall another fifteen percent in the UK over the next twelve months. That would leave them twenty-five percent below their peak.
Stocks and shares do however look very cheap when you look at all of the fundamentals. I for one am currently investing on a monthly basis to take advantage of what is called pound cost averaging, this is where you able to purchase additional shares/units when the price falls which in turn will benefit you when the price rises. Whether stock markets will surge in 2009 is another matter and there are many factors that could certainly stop that from happening, a terrorist attack is just one example.
One thing that could be very important to the investment performance of many stocks and shares is how the tough the new President of the United States gets with the finances of the country. He could either breathe new life into the markets or could make some major blunders. The Prime Minister in England, Gordon Brown, could also be a major player. He is seemingly losing his grip on the country and people are already writing him off. I doubt for one second whether he will give up without a fight and may well attempt to start an economic recovery of his own for the people of the UK. Lowering petrol prices and a windfall tax are two obvious starting points.
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