March 17, 2011

Japan Market Update: No Time to Get Careless

Japan’s markets didn’t melt down on Thursday – and, so far, neither did its reactors. We finally got a bid in U.S. equities. Crude oil is rebounding, and yields are rising slightly as the rather tepid flight to quality trade takes a breather.

But a breather is probably all today represents. There could still be bad news on the nuclear front, and don’t forget the other hot spots in the world. Libya is still a mess, as is Bahrain. Even Saudi Arabia is getting in the act.

Advisors should remember the difference between a speculator and an investor. The former reacts to market sentiment with the hope of buying into a low point, or selling into a rally. The latter makes strategic portfolio changes based on valuation and fundamentals that may take months to play out. And in the long run, the investor almost always comes out on top.

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