Analysts at the US investment bank Morgan Stanley are recommending that clients start to buy shares again after more than a year of falling markets. In an investment strategy report, analysts at the bank said that all four indicators they use to gauge the equity market outlook have started to indicate a turn in the downward trend.
"We have now come full circle: our market timing indicators are giving us a full house buy signal," said the statement. "Each of the four indicators – valuation, capitulation, risk, fundamentals – tells us to buy."
"These models tend to work some 80 to 90 per cent of the time," they said. "And in the 10 to 20 per cent that they don't work, the move the other way can be spectacular."
Unfortunately the model tends to NOT work this time.
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