January 22, 2008

Those of you have follow my blog regularly, you guys would have know the bear market is coming. A few months ago, I was shooting down the financial sector. I was careful on the strength of the technology sector. As i mention before, if the technology sector start to fall, the market will press the panic button.

Just some Warning !!!

Please do not catch the falling knife. This mean that if the market is falling down, please do not buy and think that it is a bargain especially if you wanna buy and hold for long term. When the market is falling down, there will be some bargain hunter and novices around to push up the downfall a bit, but the fall will be greater after the push. If you are not a day trader or swing trader, then you are most likely to be in risk.

Ride with the wave … if the market confirm to be a bear market, just shot all the way down. If you are not comfortable in shorting the stock, then park your money in somewhere safe (please do not park in gold or oil as they are already peaking) and wait till the end of bear market.

A bear market is always good for the whole economy since we already have 5 years bull market. A healthy market/ economy will go through many boom and recession.
Some sector that are recession proof are …

- Tobacco
- Health Care
- Consumer Staple
- Beverage and Alcohol

The market today is no longer investor market. It is rather a trader market with a lot of novices. Most of the big time investor either park their money in the bond, commodities or they just sitting sideline.

I suspect that the FED will cut the rate till 1% before holding the rates and eventually raise the interests rate. I will not be holding any short term trade and also stay away the market for a while.

Warning …

If you think that BLUE CHIP stock will eventually go up again … Think again …
Let say if the bear market take about 2 year to end and you need another 2 year of the bull market to make back your losses, you will need a total of 4 years. Well isn’t it better to cut losses now and ride will the bull market when it finally come .
Only loser will say that it is meant for long term investment and let their money losing value …
Take charge of your financial and admit that you have make a poor judgment and move on with it …
Only Winner will admit their mistake and use it as a strength to bounce back at a greater height.

Trade Safely and Trade well …
When is the time to Cut, Just Cut it …
The choice is with you …