Re-assessing the market strategies has assumed added importance in view the new situation that has been created in the market on account of world-wide recession in the economy. No one knows whether the gloomy conditions will continue and if so for how long! Whether the market is on the recovery course! A market researcher and analyst have to work on the assumptions to the best of one’s ability and judgment. The broker has a difficult task before him to formulate revised strategies and advise the clients accordingly.
No one is attempting to make assertive, positive predictions for the market for 2009. The conditions are extremely volatile. The technical picture of the current weak market is too confusing. A mild rally could resume but it is difficult to say whether it will assume the form of a trend reversal. The present low is unlikely to be breached. From the present low, some expect a significant bounce in to 2010.Some expect a bounce of 35{a16d06abe49b7cb280a391e2908a1c67db5c20e235c835a9ae172b47b18e1709} from the present low to the year end. Many foresee the market to crash again in October. The forecast for end of 2009 is likely to be clearer by mid 2009.
As per the current indications, the year 2009 will be a great time for the long-term investors. Shares are available at bargain basement prices. Assuming that the market conditions still go worst, that position can not continue for long. It will change for the better, as the stock market history shows that great bull markets emerge out of the most pessimistic market conditions. A strategy to invest 10{a16d06abe49b7cb280a391e2908a1c67db5c20e235c835a9ae172b47b18e1709} of the funds to be invested, on a monthly basis seems appropriate at this stage. But watch, if the present index trades to below 10{a16d06abe49b7cb280a391e2908a1c67db5c20e235c835a9ae172b47b18e1709} of its present low. In that case, evaluate each share in your portfolio, afresh. Be wary of the mega trends that are taking shape in the economy. Some of them are Peak Oil, Rise of Asian Middle Class, Population growth, Global warming etc. These will impact the indices in the long run.
For the experienced investors, the current volatility of the market can be highly rewarding. The investors of this category are position traders, including those who employ hedge fund style trading tactics, day traders etc. Such brilliant investors take out the best from the so-called worst conditions of the market, because they are great market-timers Stock market is always tricky and has its own style of functioning, beats calculations of the researches, and yet every day many investors make fortunes. The year 2009 is good one for the short-term investors, who have the market-timing on their side.
Those who are new to the market or the ones who decide to venture into to the market for the first time, better note that this is not the time for adventurous investments. Forced attempts to make luck work in your favor, will in all probability, be futile exercises. The investors who have steadily gained from the share market are the ones who cultivate the studied approach to investments. 2009 is a special year. Uncertainties loom large in every segment of the industry, including the banking sector. It is for you to decide, where you have to lower your anchor in the whirlpool-like market.
The rules and opportunities in 2009 are not much different, for the discerning investor. In real terms, whether there is recession or you are in the midst of a great economy, from the point of view of an investor, they are one and the same. In great economy all investors do not earn profits. Similarly, when there is recession, not all lose money. The final victors are the market-timers. Therefore, have a simple and practical strategy for the year 2009.
No need to take a grim view of 2009. Take thinks as they come. Cross the bridge, when you come to it bug know in advance that there is a bridge to cross mid-way!
