Stock Market - An Ocean of RED and Back to BLACK

Since early this year I have been following news on the world's financial health especially the recently protracted partisan haggling in raising American debt ceiling. Their Congress managed to resolve the impasse just hours before default on 2 Aug 2011 much to the relief of the financial world. Most of the writings point to another possible GFC2 (global financial crisis). Things have been further confounded by  Europe's sovereign debt crisis which seems to have defied remedies and threatens more euro-zone economies.

Like most investors, I am worried , yet  I hesitated to offload some of my stocks  early last week. My hesitation does make a poor investor out of me. The intransigence was an opportunity lost. Despite being a small-time market player for quite some time, I must admit I am no savvy investor. I have created wealth no doubt but not as much as it should had I been more decisive and less greedy ... ooops!

Last evening saw the worst Wall Street sell-offs in two years. The world has seen it coming. Investors just fled the market on news of American worsening economic data and the failure of the stimulus packages to spur her economic growth. The Dow Jones Industrial Index was down by more than 500 points. I foresaw an ocean of red in our own stock market the next day which is today and as sure as the sun rising from the east, the ocean of red stares at me from the screen of my computer when market opens.

Market free falls at New York Stock Exchange Aug 4 2011 (WSJ)

Ocean of RED at Bursa Top Volume Aug 5 2011

Following the DJI steepest decline since 2008 yesterday, panic selloffs also hit other Asian stockmarkets . And the Australian stock market wiped off nearly AUD56b this morning. It seems that it is a natural reaction for most investors to panic and convert  what they have got in the market around time like this to cash and someone has made a remark that if this was the favoured technique, it should have been done before the crash!

It is envisaged that markets will continue to be tough for the next couple of months in the absence of any short-term resolutions of prevailing macroeconomic issues and investors have been advised to balance up the need for return with the absolute need to preserve their capital. It is not the time for borrowing and investing.

The Present Cliche - Credit The STAR

Well, for people who have the fund to spare for the longer term (one or two years?), it is the time to buy up those battered down stocks and wait for them to come back to black for long-term gains, reminds me of the popular song of the same name by the late and tragic British singer and composer Amy Winehouse.

Amy Winehouse-RIP

Savvy and lucky investors would have capitalised on this large hiccup in the market. As for me I tend to be wise after the event..... rather unfortunately.

Just as well I am still hanging on to my precious money and not silly enough to buy the coveted Armada shares last week, the price was rather low this morning since its launching on 28 July 2011. Time to buy I guess.. no, no, just let me wait a little bit longer as Armada's trading is in USD and I note that the greenback is weakening..... Typical me I would say. By the time I decide it would have been Back to Black.