Good vibrations

I can't stand that saying "you don't know what you don't know" because it's so obvious. However, market 'sociologists' seem to think it has great applicability to most investors. I know that because too many of these experts use it all the time.
Given the fact that we don't know everything, I like to take a consensus of information from those who spend a large chunk of their life studying what we can't - markets, economics, stocks, investment products and so on.

Europe coming good
What follows is a summary of what keeps bobbing up regularly from these full-time investment experts.
Europe, after being an economic basket case for years, is now the darling of the global economy going forward. As a consequence, I've been looking at good-performing funds, which are heavily exposed to good European companies.

The roll on effect
The thinking is if the Eurozone grows nicely, it means well-placed big companies should be beneficiaries. As I am not an expert on European companies, I am scouring the info sources to see what Euro-inclined funds have been doing well.
Search engines, such as Yahoo!, are a great way to do your homework to find the better performing funds.
Recently the euro has spiked against the US dollar, following higher-than-expected Eurozone growth in the final quarter of last year. Economic life is getting so robust that there are expectations of another interest rate rise there soon.

Slow down for the Yanks?
Meanwhile, the US could be looking at a slightly slower economy in 2007. The Yanks estimate that the final quarter growth for 2006 was around 3.5%, but a bad trade deficit could eat into expectations of this growth rate being sustained.

We react to the US
The US will be vital to our stockmarket, as it often is. The message I keep getting is that more and more investor experts and analysts are becoming cautious. Many interviewed on US business television channels are talking about going for defensive positions, and healthcare and consumer staples stocks are often featuring in their recommendations.

The online world
Another often-mentioned recommendation from those expressing measured concerns about the future for shares is the positive case for tech stocks, which surprises me a little. I can see a long-term case for tech stocks in the age where we have gone berserk on iPods, mobile phones and BlackBerrys as we increasingly engage with our world online.

The big, boring, blue saga
One local analyst, who I have a healthy respect for, made a reference in his regular commentary to a "correction" in a very matter of fact manner and explained how he had positioned himself with big, boring, blue chip stocks.
He thinks many small caps and mid-cap stocks are near their trading peaks. His argument was that he wanted to be holding the sort of stocks that people would want to be keen to buy when the market heads south.

Thoughts can create reality
By the way, there are lots of 'experts' who have the suspicion that we will see a sell off on the stock market this year and sometimes when enough people think like that, they actually make it happen.
Another expert who spends his time looking at fundamental returns, exuberance readings and the volatility of forecasts thinks the stock market will put on 13% this year. However, the exuberance factor is now at 4% and so a net result of 9% - 13% minus 4% - is on the cards.

View backed by knowledge
This guy is a pointy-head who does a lot of quantitative analysis, but has a good record. His numbers tell him that financials, consumer staples, industrials, materials and healthcare are the better areas to look at this year. He also believes a portfolio with 10-15 stocks reaps the best results.

It's the vibe!
This year is a year for caution but the vibe, to quote the lawyer from the movie The Castle, is positive, but don't expect 20% unless you pick and trade brilliantly.

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