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S&P sees worst week since 2002
By Pehon | July 29, 2007
The STI closed down 2.4% on Friday, after the synchronised sell off by Dow Jones on Thursday night (Singapore).
And the worst is probably not over. The Dow fell 1.54% and the S&P fell 1.6% on Friday night as Singaporeans were partying away.
What should we expect from here. What can we do from here?
Unfortunately, nobody knows how long the current “correction” will last. Analysts are divided on whether the market is going to make as quick a recovery as in Feburary or its going to take a weeks to recover. However, one thing is clear, nobody is expecting this current correction to last for a year or more.
We’re probably going to see similiar picture of red on Monday after the fall in the USA market. What would I recommend to investors.
For investors already vested in the market, stay in it. You’ll never know when the recovery will occur. But one things for sure, earnings are expected to be strong still, and its highly likely recovery will happen, and when it happens, global indexes are going to make new highs, including the STI. Allow the weak shareholders to run, leaving the stronger holders behind, allowing the bull to return.
For investors who are not yet vested, i recommend holding off for a short while, before the subprime crisis shows a clearer direction, and when the market direction clearly points towards the green once again.
Whatever you choose to do, its always good to remember that when you invest in stocks, its meant to have a long term outlook. With earnings still strong, and global economy growing, its highly unlikely a sharp global depression will occur, and the correction we are seeing is just a short term market correction.
Topics: Indexes&Economy |