Diamonds and Dogs
Third Quarter Results Prove to be StellarThird Quarter Results Prove to be Stellar
The third quarter of 2010 was outstanding for stock investors as the Dow was able to gain 10.4% as investors picked up bargains after a second quarter that fell by almost the same amount. In fact for the last two quarters, the Dow closed down just 70 points from where it started and is up by about 3% for the year. With this being said, where do we go from here? Large companies are taking advantage of the lowest interest rates in a generation and are borrowing money at a high rate of speed. With cash and the new borrowings, companies are in a great position to pay increased dividends, buy back stock, or look for reasonable acquisitions. With the uncertainty of the elections around the corner, we believe that stocks could have a good showing in October, as historically, with the exception of a couple of crashes, October is positive 2/3 of the time. Be long or possibly be wrong.