Don't crash amid termoil
Feb 12, 2008 10:57:24 GMT -5
Post by Disgruntled70sHab on Feb 12, 2008 10:57:24 GMT -5
Found this earlier today. The markets have been taking a kicking lately. Not too bad a read.
Don't crash amid turmoil (link)
Linda Leatherdale
Updated: 2008-01-20 06:05:18
How thoughtful: Ontario's lapdog securities regulator is telling us to "check before you invest" this RRSP season.
After all, an informed investor won't fall prey to a scam artist.
Well, excuse me, but all the checking in the world isn't saving investors from the scam artists who defrauded the American public by leading them hook, line and sinker into the scuzzy sub-prime mortgage madness, which sparked a global market meltdown.
Poor investors, watching their hard-earned savings go up in smoke as trillions of dollars are wiped from share values around the world.
In the States, not only are they losing savings, but their homes, too -- as real estate prices crash, foreclosures run rampant and 2 million households renew mortgages worth more than their homes.
Even after President George W. Bush announced a $150-billion US stimulus package, including tax cuts to help keep his hard-hit economy from sinking into recession, the bloodletting continued.
On Wall Street, the Dow, which suffered triple-digit losses all week, lost another 59.91 points at week's end to close at 12,099.30. That's more than 1,000 points wiped out since the beginning of the year.
Bay Street is getting whacked, too. After losing 1,000 points in just four days, the TSX tumbled another 58.51 points Friday to close at 12,737.12.
Mark my words, the bull is dead. And a vicious bear is kicking butt.
"The fear is that (Bush's) plan, and even the Fed, may not have enough firepower to turn the path to recession around," said one senior equities analyst in the U.S.
Now, here's my opinion: It's not the "R" word we should fear.
It's the "D" word.
And just where is Bush getting $150 billion for his bailout package?
Once the world's economic superpower, the U.S. is drowning in a sea of red ink, owing -- please sit down -- a whopping $60 trillion in debt and liabilities. The breakdown: $8 trillion in federal debt; $20 trillion in social security liabilities; $32 trillion in medicare liabilities.
'SERIOUS THREAT'
Then there's record household debt, with our American cousins owing $7 trillion.
As David Walker, U.S. comptroller general, commented: "I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan, but our own fiscal irresponsibility."
Cranking up the money printing machine, as central bankers around the globe are doing to keep our financial system afloat, will only add to this debt.
And if you want stagflation, keep it up.
Meanwhile, the worse it gets, the more investors will bail.
"For the average investor, it is literally when you think you can't stand it one minute longer, you don't care what you lose, you call up and say 'get me out,' " said Quincy Krosby, a chief investment strategist at the Hartford in New York.
She predicts a lot of volatility lies ahead.
"You're going to see bounces but, overall, it will be a big, big wave of selling."
North of the border, Bay Street veteran Fred Ketchen is trying to calm frayed nerves by preaching for people not to panic and bail at the bottom.
Ketchen, director of equity trading at ScotiaMcLeod, who has lived through a number of market meltdowns, says the smart investor will be sitting in some cash waiting to buy up good blue-chip shares at depressed prices.
Bank shares, with their sweet dividends, are prime examples. At week's end, the financial sector lost another 1%, with Royal Bank down 45 cents to $57.65, Scotiabank off 70 cents at $45.82, and BMO down 64 cents at $54.01.
Royal, TD and Scotiabank, by the way, are on Scotia-McLeod's buy list.
It's not just financial stocks getting hit. All indexes are down, with even record-breaking oil and gold suffering a volatile ride of one day up, the next day down.
RRSPs no longer have borders, meaning you likely have money in global markets. My advice is to review your portfolio, know where your money is invested and add some safety.
BLACK MONDAY
Interest rates may be low, but a 3% guaranteed return on a GIC during this rough ride is better than losing money in equities, where there are no guarantees.
And let me remind you: Among the 10 worst crashes in history, Black Monday on Oct. 19, 1987, didn't make the list. Why? It was a one-day plunge, followed by a decent correction.
It's the silent killers, like years of volatility after the hi-tech bubble burst in 2000, which hurt the most. Though markets went on to score new highs, some investors have yet to make up their losses.
Here's something to think about: With the Great Crash of 1929, which ushered in the Great Depression, a $1,000 investment in September 1929 was worth only $108 by July 1932, and a full recovery wasn't made until 22 years later.
- - -
It's shocking that 25% of all investors have been scammed. Really?
So, with the Feb. 29 RRSP deadline to shelter 2007 income from the taxman six weeks away, here's some advice from the "check-before-you-invest" campaign by the Ontario Securities Commission:
- Don't be pressured into making a fast investment decision. Avoid limited-time offers that look like a great deal, or promises of tax advantages.
- Keep track of your investments.
- Be wary of unsolicited investment offers. Most fraudulent schemes are made through unsolicited phone calls or e-mails.
- Know who you're dealing with. Scam artists will go to great lengths to look legitimate through slick websites, professional marketing materials and believable sales pitches. Don't fall for it. And check with the OSC to see if the salesperson has a history of disciplinary action.
- If you suspect a scam, report it to the OSC at 1-877-785-1555 or checkbefore youinvest.ca
---
MARKET MAYHEM
As stocks melt down around the globe, here's how world markets performed so far this year (values up to close of Jan. 17):
Morocco +9.83%
Jordan +7.54%
Egypt +2.38%
Malaysia +1.97%
Nigeria +0.89%
Israel -2.00%
India -2.83%
Pakistan -3.95%
Slovenia -4.87%
Taiwan -5.16%
Indonesia -5.23%
Switzerland -5.90%
Italy -6.03%
Ireland -6.13%
Russia -6.16%
Japan -6.34%
Thailand -7.09%
New Zealand -7.23%
South Africa -7.26%
France -8.29%
Spain -8.38%
Peru -8.58%
Hong Kong -8.59%
Germany -8.75%
Czech Republic -9.01%
United Kingdom -9.31%
United States -9.61%
Portugal -9.62%
Colombia -9.63%
Netherlands -9.79%
Philippines -9.80%
South Korea -9.81%
Singapore -9.90%
Chile -9.98%
Sweden -10.77%
Mexico -11.02%
Canada -11.16%
Greece -11.66%
China -11.70%
Argentina -11.82%
Finland -12.08%
Turkey -12.11%
Hungary -12.16%
Denmark -12.76%
Brazil -12.76%
Iceland -15.73%
Norway -15.75%
Poland -16.08%
Luxembourg -16.88%
-- S&P/CITIGROUP GLOBAL EQUITY INDEXES, BMI
Don't crash amid turmoil (link)
Linda Leatherdale
Updated: 2008-01-20 06:05:18
How thoughtful: Ontario's lapdog securities regulator is telling us to "check before you invest" this RRSP season.
After all, an informed investor won't fall prey to a scam artist.
Well, excuse me, but all the checking in the world isn't saving investors from the scam artists who defrauded the American public by leading them hook, line and sinker into the scuzzy sub-prime mortgage madness, which sparked a global market meltdown.
Poor investors, watching their hard-earned savings go up in smoke as trillions of dollars are wiped from share values around the world.
In the States, not only are they losing savings, but their homes, too -- as real estate prices crash, foreclosures run rampant and 2 million households renew mortgages worth more than their homes.
Even after President George W. Bush announced a $150-billion US stimulus package, including tax cuts to help keep his hard-hit economy from sinking into recession, the bloodletting continued.
On Wall Street, the Dow, which suffered triple-digit losses all week, lost another 59.91 points at week's end to close at 12,099.30. That's more than 1,000 points wiped out since the beginning of the year.
Bay Street is getting whacked, too. After losing 1,000 points in just four days, the TSX tumbled another 58.51 points Friday to close at 12,737.12.
Mark my words, the bull is dead. And a vicious bear is kicking butt.
"The fear is that (Bush's) plan, and even the Fed, may not have enough firepower to turn the path to recession around," said one senior equities analyst in the U.S.
Now, here's my opinion: It's not the "R" word we should fear.
It's the "D" word.
And just where is Bush getting $150 billion for his bailout package?
Once the world's economic superpower, the U.S. is drowning in a sea of red ink, owing -- please sit down -- a whopping $60 trillion in debt and liabilities. The breakdown: $8 trillion in federal debt; $20 trillion in social security liabilities; $32 trillion in medicare liabilities.
'SERIOUS THREAT'
Then there's record household debt, with our American cousins owing $7 trillion.
As David Walker, U.S. comptroller general, commented: "I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan, but our own fiscal irresponsibility."
Cranking up the money printing machine, as central bankers around the globe are doing to keep our financial system afloat, will only add to this debt.
And if you want stagflation, keep it up.
Meanwhile, the worse it gets, the more investors will bail.
"For the average investor, it is literally when you think you can't stand it one minute longer, you don't care what you lose, you call up and say 'get me out,' " said Quincy Krosby, a chief investment strategist at the Hartford in New York.
She predicts a lot of volatility lies ahead.
"You're going to see bounces but, overall, it will be a big, big wave of selling."
North of the border, Bay Street veteran Fred Ketchen is trying to calm frayed nerves by preaching for people not to panic and bail at the bottom.
Ketchen, director of equity trading at ScotiaMcLeod, who has lived through a number of market meltdowns, says the smart investor will be sitting in some cash waiting to buy up good blue-chip shares at depressed prices.
Bank shares, with their sweet dividends, are prime examples. At week's end, the financial sector lost another 1%, with Royal Bank down 45 cents to $57.65, Scotiabank off 70 cents at $45.82, and BMO down 64 cents at $54.01.
Royal, TD and Scotiabank, by the way, are on Scotia-McLeod's buy list.
It's not just financial stocks getting hit. All indexes are down, with even record-breaking oil and gold suffering a volatile ride of one day up, the next day down.
RRSPs no longer have borders, meaning you likely have money in global markets. My advice is to review your portfolio, know where your money is invested and add some safety.
BLACK MONDAY
Interest rates may be low, but a 3% guaranteed return on a GIC during this rough ride is better than losing money in equities, where there are no guarantees.
And let me remind you: Among the 10 worst crashes in history, Black Monday on Oct. 19, 1987, didn't make the list. Why? It was a one-day plunge, followed by a decent correction.
It's the silent killers, like years of volatility after the hi-tech bubble burst in 2000, which hurt the most. Though markets went on to score new highs, some investors have yet to make up their losses.
Here's something to think about: With the Great Crash of 1929, which ushered in the Great Depression, a $1,000 investment in September 1929 was worth only $108 by July 1932, and a full recovery wasn't made until 22 years later.
- - -
It's shocking that 25% of all investors have been scammed. Really?
So, with the Feb. 29 RRSP deadline to shelter 2007 income from the taxman six weeks away, here's some advice from the "check-before-you-invest" campaign by the Ontario Securities Commission:
- Don't be pressured into making a fast investment decision. Avoid limited-time offers that look like a great deal, or promises of tax advantages.
- Keep track of your investments.
- Be wary of unsolicited investment offers. Most fraudulent schemes are made through unsolicited phone calls or e-mails.
- Know who you're dealing with. Scam artists will go to great lengths to look legitimate through slick websites, professional marketing materials and believable sales pitches. Don't fall for it. And check with the OSC to see if the salesperson has a history of disciplinary action.
- If you suspect a scam, report it to the OSC at 1-877-785-1555 or checkbefore youinvest.ca
---
MARKET MAYHEM
As stocks melt down around the globe, here's how world markets performed so far this year (values up to close of Jan. 17):
Morocco +9.83%
Jordan +7.54%
Egypt +2.38%
Malaysia +1.97%
Nigeria +0.89%
Israel -2.00%
India -2.83%
Pakistan -3.95%
Slovenia -4.87%
Taiwan -5.16%
Indonesia -5.23%
Switzerland -5.90%
Italy -6.03%
Ireland -6.13%
Russia -6.16%
Japan -6.34%
Thailand -7.09%
New Zealand -7.23%
South Africa -7.26%
France -8.29%
Spain -8.38%
Peru -8.58%
Hong Kong -8.59%
Germany -8.75%
Czech Republic -9.01%
United Kingdom -9.31%
United States -9.61%
Portugal -9.62%
Colombia -9.63%
Netherlands -9.79%
Philippines -9.80%
South Korea -9.81%
Singapore -9.90%
Chile -9.98%
Sweden -10.77%
Mexico -11.02%
Canada -11.16%
Greece -11.66%
China -11.70%
Argentina -11.82%
Finland -12.08%
Turkey -12.11%
Hungary -12.16%
Denmark -12.76%
Brazil -12.76%
Iceland -15.73%
Norway -15.75%
Poland -16.08%
Luxembourg -16.88%
-- S&P/CITIGROUP GLOBAL EQUITY INDEXES, BMI