For all of you who have seen your 401k portfolio loose 10% over the past few months, don't worry. Hopefully you do not need that money right now.
This morning U.S. stocks headed for yet another sharply lower open Monday as stock markets tumbled further around the world on worries about the health of the global economy.
A surge in the yen illustrated investors' nervousness about how much economic activity could slow. Japan's Nikkei 225 index dropped to its lowest close in 26 years as investors worried that the high yen will hurt Japanese exports and further disrupt economic activity. The currency moved to the 93 yen level.
This tell us that we have not yet seen the bottom and that market volitility is still an issue. For the casual investor this offers an oppentunity. Equities are cheap right now.
Example 1: this company is trading a 11x forward earnings, pay a very good dividend and is debt light and cash heavy, Microsoft. Microsoft is a high quality stock and is a value right now.
Some others include Dow, Becton Dickinson, Disney and Quixote are all good picks.
Showing posts with label equities. Show all posts
Showing posts with label equities. Show all posts
Monday, October 27, 2008
Monday, April 14, 2008
Buy low, Sell high
While the old addage still stands true, in this turbulant time its becoming harder to apply traditional fundamentals to the equities market(s). So what can you use as your guide - Greed. That's right, let that little voice in the back of my mind be your guide.
A great example of the big G. Just a few months ago Google was selling at around $700 per share. Had you bought the stock at $400 a share your eyes should have been green with glee.
When looking at your short-term investments (no matter if its long-terms that have come due or a day trade) its a good idea to set some buy/sell limits for yourself. A very simple way is to say -5% and +10%. This way you are in there long enough that you can weather a small storm or you stick around until right before the bubble burst. Its never a good idea to trade on emotion.
Some strong sectors that should bring some solid returns are: aerospace/defense, manufacturing (especially TVs and DvD players), and AOL. While AOL isn't a sector its deal with Verizon, combined with the restructuring makes them a good value pick.
Stay away from companies that are heavy in the export business, the weak dollar is slowing cutting into already slim margins. Restaurants, blame it on the rain or maybe the lack of it. Fuel prices and crop shortages are leading to increased food cost. The problem is that with families pocketbooks being tight its hard to raise prices. A silver lining may be Applebees, Ruby Tuesday, and Red Lobster. Some builders and their suppliers... Need I say more.
A great example of the big G. Just a few months ago Google was selling at around $700 per share. Had you bought the stock at $400 a share your eyes should have been green with glee.
When looking at your short-term investments (no matter if its long-terms that have come due or a day trade) its a good idea to set some buy/sell limits for yourself. A very simple way is to say -5% and +10%. This way you are in there long enough that you can weather a small storm or you stick around until right before the bubble burst. Its never a good idea to trade on emotion.
Some strong sectors that should bring some solid returns are: aerospace/defense, manufacturing (especially TVs and DvD players), and AOL. While AOL isn't a sector its deal with Verizon, combined with the restructuring makes them a good value pick.
Stay away from companies that are heavy in the export business, the weak dollar is slowing cutting into already slim margins. Restaurants, blame it on the rain or maybe the lack of it. Fuel prices and crop shortages are leading to increased food cost. The problem is that with families pocketbooks being tight its hard to raise prices. A silver lining may be Applebees, Ruby Tuesday, and Red Lobster. Some builders and their suppliers... Need I say more.
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