Thursday, May 7, 2009
We have been witness of a volatile market crises, which started with the housing market, credit market and lately the banking crises. It is a three punch impact that started in 2007. I have seen many friends in corporate lose their jobs lately; friends taking jobs they are over-qualified for for less money to make ends meet. These are tough times, we can feel them in some way or another. Inflation is on the rise; a concerning fact is the government spending on companies that over-extend themselves; the aid received by some have created an intangible sense of security for some making buy other companies that have too much debt and toxic assets. Even banks are not excluded from these behaviours. Lately a Bank for banks has been liquidated. Many smaller banks will follow. This is a sign of times that will last quite a while. Our culture of over spending on credit and extending our means will suffer and have to be dealt with. I could see this happening upon coming to a robust, bull market. I am blessed to be a conservative investor. I believe in being one's own bank and diversified not only in the stock market but in tangible holdings. Always sell high and buy low. In a bear market, cash is king for those who have it. Even though the sense of fear instill by the public media has a greater impact and affect the consumer confidence; this freezes commerce, entrepreneurship and financial well being. Many over spenders will have to work longer. Generations X'ers and Y'ers will have to realign goals as many government programs will not be there for them. As a nation our financial strength will decrease in a way of a weaker dollar. Our only positive productive industry: Exports will suffer in a global market. New player will emerge and dictate how we do business in the future. Free trade and global competition will be fierce. Our efforts for job creating will be challenged by our socialism changes. Capitalism have endured and always have come on top. This time around we will be restricted on production, earnings as we will pay higher taxes. My only recommendation at the present time is to budget, restrict expenses and hold on for a wild ride. It will be a few years until we would feel relieve. Do your homework and prioritize what it is really important, not only for now but for the future of our children. So far it looks very bleak.