Financial Markets Woes 2008

First Bear Stearns, then Freddie Mac and Fannie Mae. Now Lehman Brothers and AIG. Questions surround other big names e.g Merrill Lynch and Morgan Stanley.

The speed at which these developments occur has seldom been seen before. The named losses and the dollar amounts needed to bail these organisations out have just too many zeroes for the mind to comprehend.

We have just survived one of the worst week in financial history, well at least in my 27 odd years of working life in the finance industry. Strangely though, there is no feeling of pessimism or panic. My investments have taken a tailspin and paper losses mount with each point the markets fall. The rallies that came on Thursday and Friday console but not quite enough to make up the losses.

The question of "is this it or is there more to come?" A general consensus amongst financial experts is that there is more pain yet to be unleashed. They based this diagnostic on the de-levering of asset prices, the need for besieged institutions to sell assets to stay afloat or to use the still valuable assets to attract white knights. But this is the question for the big boys. What about you and I?

What must be on the minds of most (well certainly in mind):
a. look for a rally to sell and minimise losses
b. look for a rally strong enough to take me back to my breakeven, sell there and breather a sigh of relief.
c. look to buy into these crashed/crashing markets.

It's the last point that I would like to discuss a little more. This is not the time for panic selling. The concept strategy for Investments 101 is simply "Buy Low and Sell High". This is the time to put that strategy to the test. This is the time to find bargains and buy.

When markets plummet and prices of stocks fall, invariably they will fall below their worth. This is the result of overdone selling and brings these assets and securities into what is known as oversold conditions. This status can continue for a while as contrarians test the strength of the selling. There will come a tipping point at which, the number of buyers will begin a more courageous attempt to hold the selling. When sellers see this happening and realise that perhaps they could get more by holding back on their selling while the buyers take stocks up, then the pace of decline slows and may even turn around.

I do not know when the tipping point will be reached. However, I have begun to look around and see some markets offering hope. This is a good time to look for your TRUSTED financial advisor to help build or rebuild your investment portfolios.

My personal choices are in stocks of business lines which touch me e.g. food, utilities, transportation. Go round your home or office and look for the brands which continue to hold quality for you. It is likely that others who are like you will have the same perceptions. Start here.