The Gung Ho Days May Be Gone But Not The Good Values

Stock investors have a habit of reacting to news before it happens--sometimes long before. This "discounting" pattern is one reason stock-market performance is a leading indicator of a country's economic health. It's also why, despite the long-awaited global economic recovery, the major developed-country markets are languishing now and are widely expected to continue their uninspiring drift through 1995. Instead of focusing on improving corporate earnings, investors are preoccupied with rising interest rates that could slow economic growth and make fixed-income instruments more appealing than stocks.

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