IS IT TIME TO SELL SOME STOCKS?
Lot of publications use sensational headlines because they sell!
Linda says:
Financial columnists have been equally prone to eye-catching statements recently, usually related to the sub prime mortgage mess or the impending collapse of the US dollar. There has been no shortage of gloom and doom scenarios discussed.
Amidst such pronouncements, the fact that an economist named Mr Mervyn King is warning of the risk of major falls in global equity markets could be otherwise only slightly noticed. But Mr King is in a role where he would be expected not to be making such statements. He is the Governor of the Bank of England.
Certainly, Mr Alan Greenspan has been making all sorts of headline market predictions of late, but he has undergone a metamorphosis from reserved, central banker to best selling author. But Mr King is still the incumbent Governor, and not prone to rash statements.
“It is very striking that despite the developments we’ve seen in the last three months, despite the stresses and strains in the banking sector, equity prices are higher now than they were in August,’ he said. A recent report by the Bank of England has highlighted the vulnerability of the UK stock market.
But he is not just talking about problems in Britain. Mr King also said, “This is true around the world, and in emerging markets they’re 20pc higher. There must be some downside risks there.”
IT DOES sound like a good time to take some profits! While no one can accurately time financial markets, the fact that such prestigious individuals are sounding warnings, means it would be prudent to review your particular investments. This is particularly so, if they involve borrowed money in the form of margin loans or some other gearing.
What do you think?
