Stock markets

It´s Feb 2007 and we have had a good start of the year. The stock market in Sweden has shown a positive year end since year 2002. Normally, 5 positive and consecutive years are very rare. Only twice before in history have this happened. During the 90s we experienced a long economic growth followed by a deep dip on the stock exchange markets.

So, what is our immediate direction?

I think we will find answers in the macro economy. There are changes in the economic world. It is not dependent on US economy any longer. We have four major growing markets (BRIC) and even if they don´t compete with the size of American economy it keep up demand.

The beginning of this century we have experienced an unbalance in the worlds supply and demand, which have pushed up prices in many sectors. It takes time to invest and develop new capacity but the world is slowly adjusting to a new demand level. This will continue for many years. The growth in China can be compared to the growth in western Europe post WWII.

In conclusion, Asia will most likely experience a steady growth for the next 20-30 years. There will be setbacks but overall a higher return on investments than money on the bank.

P