what to watch out for in a falling market
"look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it." -- billionaire investor warren buffett.
i don't want to sound like the weather bureau when there is a storm, or an expert when financial markets are in a tailspin. so be careful on what you read from here.
be smart, call up your stock brokers, your most reliable analysts, read, watch out for any major announcements from policy makers. most of all, listen to your instincts.
after all, it is your money, honey.
so be safe.
always stay ahead of the pack.
stop, look and listen (now i sound like the fat traffic policeman who stays hidden all the time until you violate the traffic rules).
most importantly, stay calm and fabulous.
while stock prices are falling across the board in reaction to the rating cut in the united states, concerns about another recession in major economies and the debt worries in europe, there will always be bright spots. gold, considered a safe haven in times of uncertainty, continues to rise and touch record highs so it would be a safe bet to take a look at shares of gold miners once the dust settles down.
domestic consumption shares such as food, retailers (super markets) and utilities (telecoms) may also be resilient as we will have to eat and drink, buy basic necessities and businesses and ordinary people like us will continue to need to make calls even during a crisis. health-related counters will also be good investment options and you know why.
for the moment, avoid exporters, as they are sensitive to sluggish growth prospects and a weak dollar will likely dim their prospects, as well as banks and rate-sensitive properties.
asian central banks are still on a tightening mode amid expectations that funds will flow into the region as their economies stay afloat amid debt worries in the u.s. and europe.
also stay away from luxury goods. even the few wealthiest ones will stay away from buying those one million dollar bags and scarves because it is not considered chic and politically correct to shop when everyone else is suffering. this has been the trend since the financial tsunami reared its ugly head in late 2008. rich people keep it simple in sympathy with millions who lost their jobs.
of course, despite pronouncements from some government officials and central bankers that they will start to diversify their investment holdings, u.s. treasuries will remain the investment of choice even after the rating downgrade. they are still the most liquid instruments, after all, and therefore the easiest to sell.
on a lighter note, i thoroughly enjoyed captain america and the revived planet of the apes. i know, i know, i am a film snub (as if) and i usually avoid blockbusters, particularly the popcorn junk varieties. i got a headache from the noise pollutants in transformers and i got bored watching green lantern.
but these two films have smart scripts, toned down the noise, distinguishing them from other summer blockbusters.
here is a trailer of the rise of the planet of the apes with james franco:
go watch. you deserve it after the mentally and physically taxing day at the markets.