I thought that having a barbecue on Monday night would be a great idea, as the forecast for the week was excellent. Sunny skies were on the agenda and above average temperatures. However just as the thought of burnt steak and undercooked chicken was going through my head the heavens opened and we had the mother of all thunderstorms. The weathermen said that the reason for this was due to the temperature being warmer than anticipated which led to thunderstorms developing which quickly cooled the air.

 

This is a pretty good analogy for what has happened to the Stockmarket over the last few days with the news from America regarding unemployment being too "good", which led to the markets getting nervous in the short term and led to a sudden sharp fall on Monday. However in sunny Linlithgow we are wheeling out our "barbies" and are set fair for a pretty good week of weather as was predicted, which is how we see the stockmarket performing for the remainder of the year.

 

At no time have stockmarkets ever been plain sailing, but the basic fundamentals are as strong (if not stronger) as they have been for quite some time. There is a real chance that markets, therefore, could through technology and productivity gains, go beyond what can normally be expected. Merger and acquisition activity, along with rising corporate profits and still low interest rates make the long term prospects look very exciting. Some people will say it is different this time, but the truth is we went through similar situations back in 1982 and 1992, and the markets came through both times.

 

So get your shorts and tee shirts out for the summer ahead, but don't forget your brolly!

 

ALAN ADAM
Financial Consultant

Author
ALAN ADAM
Financial Consultant