What Now
The recent market volatility has created a lot of uncertainty and fear as investors second guess themselves. The uncertainty is being heightened by the talk of inflation pressure increasing due to higher fuel prices and the potential for higher interest rates as a result.
Investors should be looking at this market decline as an opportunity to refocus their portfolios to take advantage of the next upswing. This is a time to be cautiously greedy and patiently waiting for share prices to get back to levels that represent good long term value. There will be some excellent opportunities created by this decline and the best strategy to utilize in this type of market is to be ready to act.
The global economy remains in a strong growth trend even as there are signs that the US economy is starting to slow. The US economy is likely to see a recession as the Federal Reserve continues to increase interest rates in an effort to reduce inflation pressure. Investors should be looking at sectors that are not dependent on the US economy for profit growth.
The Canadian market contains many companies that are in a position to benefit from global growth that is not centered in North America. Investors will be well rewarded for selling shares of companies that are depend on the strength of the North American economy and moving into companies that are supplying products to the global growth region Asia.
There are a number of sectors that are well positioned to capitalize on the long term growth in Asia. The global demand for base metals is driven by the increase in infrastructure and housing demand that is being created by the transformation of China and India from an agricultural to industrial societies.
The creation of wealth is being reinvested in homes, highways and power facilities to supply the needs of a newly created middle class. The pace of change is picking up speed and the trend appears to be very well entrenched with the potential to last for years into the future. The demand will remain strong as millions more people will be participating in this over the next few years.
The Canadian mining sector is attracting global attention as seen in the recent take over activity with Phelps Dodge the largest copper produce in the world trying to buy Inco/Falconbridge in an effort to be a global player in the nickel business as well. While at the same time Falconbridge is trying to fend off a takeover by Xstrata of Switzerland. This takeover activity is driven by the belief that metal prices will remain at elevated levels for a lengthy period of time and that the premiums being paid to buy these companies will be justifiable over the long term.
Investors should be looking at this market decline as an opportunity to refocus their portfolios to take advantage of the next upswing. This is a time to be cautiously greedy and patiently waiting for share prices to get back to levels that represent good long term value. There will be some excellent opportunities created by this decline and the best strategy to utilize in this type of market is to be ready to act.
The global economy remains in a strong growth trend even as there are signs that the US economy is starting to slow. The US economy is likely to see a recession as the Federal Reserve continues to increase interest rates in an effort to reduce inflation pressure. Investors should be looking at sectors that are not dependent on the US economy for profit growth.
The Canadian market contains many companies that are in a position to benefit from global growth that is not centered in North America. Investors will be well rewarded for selling shares of companies that are depend on the strength of the North American economy and moving into companies that are supplying products to the global growth region Asia.
There are a number of sectors that are well positioned to capitalize on the long term growth in Asia. The global demand for base metals is driven by the increase in infrastructure and housing demand that is being created by the transformation of China and India from an agricultural to industrial societies.
The creation of wealth is being reinvested in homes, highways and power facilities to supply the needs of a newly created middle class. The pace of change is picking up speed and the trend appears to be very well entrenched with the potential to last for years into the future. The demand will remain strong as millions more people will be participating in this over the next few years.
The Canadian mining sector is attracting global attention as seen in the recent take over activity with Phelps Dodge the largest copper produce in the world trying to buy Inco/Falconbridge in an effort to be a global player in the nickel business as well. While at the same time Falconbridge is trying to fend off a takeover by Xstrata of Switzerland. This takeover activity is driven by the belief that metal prices will remain at elevated levels for a lengthy period of time and that the premiums being paid to buy these companies will be justifiable over the long term.
posted by Grant | 7:47 AM
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