Time to Invest in The Eurozone?

2 Mar

It is fair to say, that compared to the state of the Eurozone  since the Recession there are many redeeming features, which have led some to call – now is the time to invest.

Some key points :-

  • The threat of the Eurozone imploding has faded. 
  • The fear of the immediate demise of the Eurozone has subsided.
  • The European Central Banks’ Long-Term Refinancing Operation (LTRO) may be a turning point because it removed the tail-end risk.
  • Since December, the ECB has lent to European banks more than 1 trillion euros at low interest rates, and those funds don’t have to be paid back for three years.

This refinancing operation is likely to help calm worries about the Eurozone Debt Crisis, at least short-term and may lead to European stockmarkets rallying and the bond yields on at least some Eurozone countries falling this year. Trading volumes are relatively low and the long-term effects of the LTRO and its impact on the real economy are unknown.

Is Europe able to stimulate more, and are they willing? The answer I think is YES to both, although further liquidity operations in Europe and the US will be needed.

I think banking in the future will look completely different and the golden age of finance is now over. I just doubt that the banks accept this fact as yet.

Investing is all about being careful but not too careful.

The question you must answer is – if you don’t take risk now with everything that has happened, when is it right to take risk?

Any questions my email is welshmoneywiz@virginmedia.com

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