The Wise Investor
“Prognostications 2009"
For Immediate Release
Vancouver, BC (December 29, 2009):
- The global recession will continue in all corners of the world. Even China can slide into a rough patch. Commodity prices, like oil, will gravitate to lower lows. Hefty corporate losses will continue.
- President elect, Barak Obama will inherit a mess. The expectations of him and his team are beyond reach. His approach will be different. Look for the “Obama bounce” in the markets. Reality will set in when investors realize he can only deliver partially.
- Lower prices and interest rates won’t be sufficient temptation for cashless consumers to loosen their purse strings and incur more debt. Big ticket items, like autos, will struggle heavily. Keep a keen eye on the viability of commercial real estate.
- Governments will spend more taxpayer money they don’t have on additional wasteful workouts, bailouts and other projects. Government deficits will balloon trying to shore up disappearing jobs.
- Get used to shrunken automakers. Before they do, they will ask for more assistance. Nobody should be surprised that the loans they’re getting won’t come back to taxpayer coffers.
- Corporate earnings will soften. The spectre of more layoffs, mortgage defaults, foreclosures and bankruptcies will fuel added turmoil. Weak US financials will continue on the ropes. Finding new capital to replenish their balance sheets will be job one.
- Conventional wisdom has the second half of 2009 getting better, but it may take longer. While stocks seem like screaming buys, cheap doesn’t always equal value. Watch for market rallies that don’t stick. Not everything is a golden opportunity.
- There is always an optimistic side to economics. For instance, housing affordability will continue to improve. At least, that will help first time buyers. Another is more responsible lending practises.
Stay simple. Cash will be king. Allocate it slowly and methodically within your well-designed game plan. Make decisions based on fact and reason. Never on emotion.
No investing strategy I know has you making all your moves in one year. So, keep your priorities straight. Remember that your investing is a marathon, not a sprint. Slow and steady gets you there.
Be on the lookout for market sentiment to change one day. I can’t tell when, but until then, tread carefully. Very carefully.
Your comments are welcome.
Adrian Mastracci
Portfolio Manager, R.F.P.
KCM Wealth Management Inc.
"Fee-Only" Portfolio Managers & Financial Advisors
Suite 1500, Box 1078, 885 West Georgia Street
Vancouver, BC, Canada V6C 3E8
Tel: (604) 739-4500 Fax: (604) 739-0234
E-mail: kcm@kcmwealth.com Website:
2 comments:
No investing strategy I know has you making all your moves in one year. So, keep your priorities straight. Remember that your investing is a marathon, not a sprint. Slow and steady gets you there.
Bollux.
Turning around your financial plan can be done in a year, you may not see the results come flooding in and the progress at the start is slow. This is true of all new ventures.
Following the 'slow and steady' course with lots of diversity is a recipie for total disaster in the coming financial reality.
LEARN about the place you want to invest in. UNDERSTAND it from your own perspective. TAKE ACTION.
Sitting on your cash right now is like asking for the governments, corporations and mostly the Federal Reserve to TAX you at 7%. That is the real rate at which all fiat currencies based on the US dollar are falling...a rate that may soon accelerate.
Sitting on cash, no matter how big the mound, may not be the wisest choice.
Garth Turner also has some interesting predictions for 2009.
Find them at his website, greaterfool.ca
He predicts -21% for Vancouver real estate, and a shocking -38% for Kelowna.
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