For those who like amusement parks and mountain climbing, then 2011 has definitely been a fun year in the stock markets. Ironies aside, elevated volatility levels and high correlations between the markets are making it very difficult to be able to define investment strategies that extend beyond the near term.
The market's strong connections with macroeconomic events, such as the EU summit that is going on now, has not helped either. Yesterday, European indexes saw generalized gains of more than 4% thanks to the agreement banks reached concerning a voluntary forgiveness of Greek debt and recapitalization requirements for European banks.
The worst is over
With stock markets behaving thus, it is increasingly clear that the sentiment moving investors to put money back into the markets depends on company fundamentals. elEconomista has kept a pulse on market tendencies (in reference to the Ibex 35) on various occasions during the past several weeks. The latest survey, completed yesterday, provided a unanimous answer: of more than 3,000 readers who participated, 56% believe that the Ibex 35 will not dip back below 2011 minimums.
