Starting in July of this year, the major U.S. stock markets, as well as some foreign ones, started a rally that is now starting to fizzle out as stock prices decline across the U.S., Europe, Asia and Latin America. Leading economist Nouriel Roubini, who believes it's about time this happened, says its better to play it safe with investments during the short-term, offering several reasons why the remainder of 2012 and all of 2013 will see continued price declines in equities. First, is the anemic economic growth in the U.S., Europe, Japan and in key emerging market economies like Brazil, Russia, India and China. Without strong economic growth, it's difficult for companies to do well. Second, there remains too much uncertainty as to what the U.S. and Europe will do about their respective fiscal problems. Finally, many equity securities have increased significantly in price during this rally, meaning that the stocks are "priced for perfect execution" something that we know seldom happens.
Learn more at Project Syndicate.