Monday, May 11, 2009

Are bank stocks a good bet for investors after the stress test?

I'm a strong believer in trading stocks not playing the market because I think that term makes it sound like it's a game. I put my hard-earned money into carefully chosen stocks to provide equity for me and someday become my outlet to retirement. It's not a game. The financial sector has been doing really well these past couple of weeks and I have even doubled my money in the last 2 months in a particular bank stock and I am very happy about that, so I found this article I wanted to share with you. USA Today explains if it is a good time to invest right now.

There are some really good points made here:

Likely to benefit from a better banking climate. Not only is the economy expected to heal, but banks may borrow at historically low rates, says Jim Paulsen at Wells Capital Management. There's also strong demand for mortgage loans. "It's a good operating environment for banks," Paulsen says.

and the other side of the fence:

Not everyone is convinced, though. Investors could do better with stocks in other industries, Maltbie says.

David Ritter of Argus Research says investors who think the banking crisis is over are deluding themselves. Refinancing activity and bond trading now helping banks are temporary, and problems with business loans are just starting, he says. "There will be poor earnings over the next couple of years. I'm not sure people have priced that in."

Share what your thoughts are and what you might be investing in and why.

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