The declines in the stock markets, the wave of sales on the financial markets and stock exchanges, large declines and the consequent strong market growth are among the most active events of recent weeks. What do you currently invest in? Which markets will be best swept? Salary still insight, in 2008 will be a commodity?
Panic is not a good leader
The key investment strategy for each investor is the investment strategy chosen by each investor. This should not, in principle, significantly affect the movements in individual markets and during the investment process itself.
The first of these correctly chosen and subsequently adhered to the strategy, approach to the investment itself and long-term relationship and tolerance for risk, which is understandably different for each investor, the individual investor should emerge even if the stock market stagnates and declines. He should not panic or panic. If these assets are invested in investments, which the investor in, should present to the present as a matter of urgency and should not make a mistake in the long run.
In many cases, it is inappropriate to get rid of the title from the long-term strategy, which is currently lost due to negative sentiment and the market decline, but in the long run otherwise they still have a perspective. In times of sharp market decline and panic, from a long-term perspective, it is important not to succumb to the market, but to monitor the fundamentals of individual companies.
However, it is certain that the first long-term investor was quick to buy the assets that v. The speculative investor, on the other hand, is currently very active in the markets and tries to trade very vigorously. In this case, he has to deal with the risk.
In general, in the event of a downturn and a sharp decline in stock markets, the investor should, according to his opinion and according to the strategy, invest, for example, at a time when the market is at its bottom, and in the sector, which has the fastest recovery from other declines. (currently according to our opinion eg energy).
Gold, real estate, or even a commodity?
Last year they were among the most successful investments in agricultural commodities. And even with the outlook for 2008, investment in commodities was predicted to have a great future for the first time. So are commodity investments really promising? The same question may occur to some investors in connection with gold, which is more than ever related to the development of the US dollar or real estate investments, as the first mortgage crisis triggered declines in stock markets.
It can be determined that gold is generally perceived as security, and if, according to the deepening of the current crisis and uncertainty in the stock markets continues, the limit of USD 1,000 / ounce can be considered real. The same can be done with similar commodities, and even here there should be no significant change in attitudes in the case of investment in them.
The ever-increasing energy intensity of the company and the limited resources of raw materials will still be one of the reasons for investing in these sectors. In times of expansion, the demand for energy and industrial commodities is growing, and thanks to the recent boom in renewable energy sources, agricultural commodities are also succeeding. Investing in commodities is so much more risky than e.g. stock market exposure.
In connection with investments in the real estate market, the view may not be so clear. Very bad in the segment and region, because the real estate market has its own specifics. The real estate fund will change, for example, the local market to have a stable investment, although with a low return, but with limited risk. On the contrary, it is necessary to expect still high volatility in the actions of real estate companies. After the reduction of rates by the Fed, the short-term trend of these companies can be expected to be positive, however, the mortgage crisis is far from over, and therefore a careful approach is necessary.
How do regions have the potential?
The mortgage crisis had its impact on the residential real estate market in the US and gradually spread to other countries in the developed world. They are affected by developing countries, which are in much better shape when it comes to the macroeconomic situation, not at any time in the past.
The growth of these countries, such as India or in, is also a strong domestic demand as their population grows in purchasing power. On the other side of the country, such as Russia or Brazil, ie the production and export of commodities. These countries are currently suffering from other problems, such as high inflation, and then a markedly overvalued stock market.
Therefore, it is also true that some shares of the company in these fields will be affected by the crisis. In general, these are defensive titles (such as telecommunications and company tables), which pay high dividends and thus ensure a regular shift in income (pensions) regardless of the current market price.