Global economy recovering in final quarter

IMF chief Dominique Strauss-Kahn told a news conference in Vienna on Friday that he expected the global economy to recover in the first half of 2010 and the beginning of the turning point is in October, November or December this year. (Source: AFP, May 16)

 

News of late was less gloomy than the time in late last year. There is more optimism than negativity in most news reporting.

 

The great unknown is the impact of the influenza A H1N1 virus affecting the world economy. If H1N1 turned out to be milder than feared, then this will not derail global economic recovery. We wish that it will be the case.

 

Despite the optimism, we can still expect the stock markets to gyrate daily albeit around an uptrend line. Equity as an investment class continues to be attractive when economy recovers because equity and economic growth are positively correlated. Investing in some stock indices and holding on for a longer term may prove to be the right thing to do.

 

Written on 5/17/2009 11:00 AM

 

Copyright © 2009, the author known as LKT in Singapore.

 

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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