Thursday, October 16, 2008

Vol 7

World is close to Recession: IMF
The world stands on the brink of a recession, led by a devastating financial crisis that is sending rich nations on a downward spiral unlikely to end before 2010
Expert’s Advice towards your investment process in the today’s criteria of falling markets

1) Use a hybrid approach that stresses Value Investing approach when the markets are down and Growth Investing approach when the markets are in an upswing. The rationale behind this is that as markets run, high growth & momentum stocks will outrun the market. On the other hand, in a down market as growth expectations are pared back, all stocks tend toward their intrinsic value.

2) Be a cautious investor over the next six months, with the fourth quarter as a possible point to keep your eyes on - not for a full-blown turn around, but at least some signs of life.

3) In recessionary times it is important to go for companies who have clean balance sheets, strong cash flows and reliable income.

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