markets in general are determined by 3 factors, the economy, the valuations, and lastly the events (which occur daily). while the valuations have started to look attractive for fundamentally sound companies (which post good earnings growth and results) and that economy is definitely great long term growth story, however it is the medium term crisis, sub-prime to begin with (US in recession), followed by oil, inflation and elections, that will come in a few months time, which will continue to sustain the ongoing panic..
so from a 6-8 month horizon, alternative (less risky) options such as Fixed deposits, gold should be considered, they do protect your valuable capital.
We are certainly going through cyclical downsides patterns in markets, globally. if one is able to predict the end of this phase (when the above mentioned factors responsible for the medium term crisis have been resolved). good, strong, fundamentally sound companies at attractive (cheaper) prices, which command sound and better valuations, can be considered, post some research and consultation with analysts (brokers), however, the medium term risks still continue to exist and have so far shown no signs of improvement.
wait and watch approach is advisable. |