Friday, March 09, 2012

Thoughts on Investing from Forbes

#6 Watch the Politicians

The new era of hypervolatility means that political news and events ranging from the battle over raising the US debt ceiling to the European debt crisis tend to move stocks much more than fundamental factors like paying down debt or boosting profit margins.

For example, in early August 2011 a host of blue chip stocks plummeted as the world wondered whether the congressional stalemate in the US would cause it to default on its debt. Fundamentals are important, but pay attention to the politicians. They can move markets.