Continuing Market Rally Shows Return of Investor Faith

Investors appear to have regained faith in the U.S. economy if the steady improvement in stock prices is any indicator of market sentiment. The S&P 500 has shown a good 6% improvement this year and, across many sectors, investors have been steadily buying into stocks of various kinds. The inertia in the markets and the risk averseness seem to have worn off as many of the high return- high risk stocks show good following alongside the ‘sure winner’ ones like Coke.

In fact, economists point out that high risk stocks are being favored increasingly by investors who would have earlier stuck to ‘safe’ ones in the utilities and telecom basket. This ‘safe’ basket, has, quite surprisingly, kept a low profile when compared with the market performance of the relatively risky stocks. The investment trend is clearly not conservative at this point with investors vying with each other for stocks like Netflix that keep inching upwards almost every day.

Technology, energy and materials are some other sectors that are popular with investors. The earlier focus on housing and finance seems to have given way to this new trend. Considering where housing prices are still stagnating post recession, the market has good reason to leave this sector well alone. However, shift or no shift, experts say that the trend clearly shows a return of faith by investors in the economy.
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