It wasnt a very exciting time for me last week. The Footsie didnt exactly catch fire, did it? And gains one day were wiped out the next. Still, there is a lot of political uncertainty about.

And the Stock Exchange hates nothing more than uncertainty. Ironically, shares can often rise on bad news, as long as everybody knows where they stand.
For example, if the bank rate rises, it is usually bad for shares (though perhaps not quite so much in these strange days). But if the economic news has been so bad that everybody expects the rise, then the actual hike will also causes a rise in the
Footsie (news) – because everybody expected it, any way.

What Ive just given you is a very obvious example. So obvious that you already knew what I was going to say, I know. But this one instance shows how shares can soar if everybody is fairly certain what will happen in a certain set of circumstances.

Now what will transpire as far as UK government goes is quite unknown. Nobody can predict it. So you would expect the Footsie to fall like a stone. After all, weve seen in recent years what government action, or more usually, inaction, can do to shares. Look (Munich: 867225 - news) at the Northern Rock (LSE: GB0001452795.L - news) fiasco and its effect on all other shares.
The fact that the Footsie is not falling like an anvil down a helter-skelter, despite the biggest political uncertainty in some years, shows the strength of the general feeling of optimism cruising around Crazyland.

I regard the fact that the Footsie is at least holding its own as a very good sign indeed. I am very encouraged. And even more of my cash reserves will probably be changed into shares this week as long as the Footsie keeps its present levels, more or less. Rocking on.