Posted on 5 September 2011 by Douglas Chadwick
As I am going away for the month of September,I have the problem of what to do with my investments. The markets are in total flux. Do I leave them where they are in the Slow and Safe Haven groups with a small amount in gold funds. Jesse Livermore would say do nothing until the market shows you the direction to go via the numbers. But I am going to be totally out of touch in the wilds of Deception valley in Botswana. Do I ignore my hero and anticipate a market move or stay put. Well some thoughts before I decide.
I cannot believe that America,Europe and the U.K. have yet made sufficient changes to correct their problems of debt,unemployment,finance and housing. So maybe there is much more bloodletting still to come. These developed markets may have low p.e.`s and appear cheap,but are they safe. I don't think so.
However what about the Emerging economies. Depending at which country you look at,they have problems of inflation,interest rates, excess housing stocks and falling demand from the developed nations. But never the less they have safe banks and still substantial growth with a young population to avoid imminent pension problems. So why did these developing markets take such a canning in the last six months. Here are some numbers to look at.
2011High 2011Low 1st Sept. Back to high.
Brazil 71616 50192 56012
30% fall 12% above low 28%
China 3057 2516 2567
18% fall 2% above low 19%
India 4967 3852 4038
22% fall 5% above low 23%
Russia 2119 1527 1700
28% fall 10% above low 25%
U.K. 6091 5007 5394
18% fall 8% above low 13%
Now as I said above, these markets have their problems but not to rival the problems in the West. They are also acknowledged as the investment world for the future. So maybe just as they fell dramatically,they will rise just as dramatically. But to do the Saltydog numbers show that this is going to happen anytime soon? Well no they don't,not yet. So I guess its a question of watch this space. What am I going to do? I am going to stay in Slow and Safe whilst I am away. I may miss a gain if the markets go up,but I will definitely avoid a loss if they go down. Its sleep at night time.
I cannot believe that America,Europe and the U.K. have yet made sufficient changes to correct their problems of debt,unemployment,finance and housing. So maybe there is much more bloodletting still to come. These developed markets may have low p.e.`s and appear cheap,but are they safe. I don't think so.
However what about the Emerging economies. Depending at which country you look at,they have problems of inflation,interest rates, excess housing stocks and falling demand from the developed nations. But never the less they have safe banks and still substantial growth with a young population to avoid imminent pension problems. So why did these developing markets take such a canning in the last six months. Here are some numbers to look at.
2011High 2011Low 1st Sept. Back to high.
Brazil 71616 50192 56012
30% fall 12% above low 28%
China 3057 2516 2567
18% fall 2% above low 19%
India 4967 3852 4038
22% fall 5% above low 23%
Russia 2119 1527 1700
28% fall 10% above low 25%
U.K. 6091 5007 5394
18% fall 8% above low 13%
Now as I said above, these markets have their problems but not to rival the problems in the West. They are also acknowledged as the investment world for the future. So maybe just as they fell dramatically,they will rise just as dramatically. But to do the Saltydog numbers show that this is going to happen anytime soon? Well no they don't,not yet. So I guess its a question of watch this space. What am I going to do? I am going to stay in Slow and Safe whilst I am away. I may miss a gain if the markets go up,but I will definitely avoid a loss if they go down. Its sleep at night time.
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