Aug
12
Over the last few weeks, Asian stock markets have taken a number of hits, which have sent stocks tumbling at least 5%. Sub prime lending - high risk mortgages - in the USA was blamed, which highlights the global nature of financial markets now. News has it that some banks are starting to restrict criteria on residential lending.
But where does that leave the individual investor ?
Is the market just correcting itself ? Or is this the start of a bear market ?
The Fed is definitely shaken, having thrown in over USD 38 billion to stabilise the market. It also helps that a large number of investors with liquid assets have been buying up what they perceive to be now underpriced stocks, what with analysts stating that stocks are undervalued and slapping “Buy” ratings on a number of stocks, especially financial related and bank stocks.
But the storm is not over yet. Things could still get worse.
We think the market will stabilise, plateau, possibly even bear downward a little. It’s not yet time to buy. Not yet. The market is still jittery and may fall further. Which means bargain time is not quite here yet. Hold your cash and wait. When we give the signal, then buy to your heart’s content.
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