Take Care to Not Blindly Invest in Wide Moats
Wide-moat stocks are a good bet in today's market, but not all are attractively priced.
This week was a good reminder that volatility remains the name of the game in the investing world. The instability in the markets continues to be driven by the same fundamental worries over Europe and the U.S. economy. And there was plenty to add to those worries this week. More conflicting news from Europe dampened hopes that that leaders were close to a breakthrough in shoring up the banking system. In the United States, the Federal Reserve seemed deeply conflicted about what its next course of action should be. Fed officials left the door open for another round of monetary stimulus, but there doesn't appear to be any imminent action.
As we've discussed before, none of these issues is going to evaporate overnight. Creating a fiscal union in Europe is way easier said than done. It is a project whose progress will be measured in years, not days. The U.S. economy is also in for a long adjustment as we work off the debt hangover and the housing recovery remains fairly anemic. A gridlocked political system and the threat of the so-called fiscal cliff in 2013 aren't helping matters much either. Add in worries about China's and other emerging markets' growth, and you have a recipe for uncertainty.
Bearemy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.