Friday, October 5, 2012

Surviving The Stockmarket

Everyone wants to make money but few will do their homework...

Most major markets have enjoyed their good run since July; are we at a crossroad of turbulent Jupiter-influenced October?

What have changed fundamentally? Nothing really; alot of talks and still plentiful of talking without actioning.

USA - Growth is stable to slow with Presidential election in tow. If market/DJIA is reflective of Obama's chances at re-election, its been positive. With QE3 and enhanced QEx, money is not a problem.

Euro - ECB warranty of buying any amount of bonds is not unlike QEx; flooding the system with enough monies to re-float the ailing comrades.

Asia - China's growth has slowed but she has been releasing more funds to grease their system/economy.   With a change of Guards in sight, China will likely ensure that the economy is 'healthy' and pumping. Japan is on the road to recovery; slow but steady. ASEAN bathes in the shadow of the larger economies like a boat in the ocean. Mid-East is riding on their oil dominance and, when peace returns, oil prices will ease to a more earthly level.

Russia is always the X-card, swaying in the horizon looking for gainful alliances.

Generally, the larger aka more influencial stockmarkets have priced in the excess supply of currencies by their national bodies like ECB & Fed. Cost savings from declining raw material prices, natural attrition and retrenchments have boosted their earnings.

As the fundamentals have broadly remained unchanged except of printing more money, the problems are shifted forward. Physical and paper assets are inflated in inflation.

When stockmarkets are unsure, uncertain yet flooded with hot monies but hopeful, they rises. Further gains are seen when those lag behind jump into the wagon, not convince but cannot resist the returns. As caution thins out in the air, the market shall turn. 

We are at or near .. As caution thins out in the air, the market shall turn .. The correction will be deep, sharp & fast. 

After the storm, the good days shall return but many may/will be left licking their wounds.

It's smart to lighten your investment load on a rising market or when the market challenges her previous high without any change in fundamentals. Sit out and buy into sharp dips, then ride the rebound.

Possible? Sure. The market goes in cycles but everyday a fool is born.   

You can either be BULL or BEAR but don't be a sheep waiting to be slaughtered.

I am the farmer ... a lot of hardwork, plentiful of commonsense and discipline; like you, I reaped what I sow. You wouldn't disagree.



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