Pessimistic investment outlook?

ionapaul

Am I alone in having a very pessimistic outlook on almost all investment opportunities at the moment? The stocks and commodities I hold have been taking a beating recently and I don't see many opportunities in equities right now as I'm very worried for the world economy over the medium-term, I have been a property bear for years now (and now more than ever), my Northern Rock return surely isn't beating the 'actual' rates of inflation we've had over the last few years, I prefer to invest in American companies but I think the dollar is going to tank, can't invest in most Irish companies because of over-exposure to the property market....it all seems doom and gloom to me!

Even with a fully funded SSIA coming to me next year, I am really worried about maintaining my current net worth over the next few years, as I have a decent CGT bill to pay off this year (thanks to last year's fantastic gains) - at least I'll have some losses to offset this bill! Anyone else as pessimistic as I am?

Diarmuid

ionapaul wrote:

The stocks and commodities I hold have been taking a beating recently

A good time to buy more with some cash you have lying around

dunkamania

'be fearful when others are greedy and be greedy when others are fearful'

Hitchhiker's Guide to...

Just because you are pessimistic on the economy (or Ireland, and the world in general), doesn't mean you should then be bearish on all stocks. Certain stocks perform particularly well in poor economic conditions.

The theory suggests that you should look for stocks with low betas if that is what you feel. In case you are not sure what betas are; they are a measure of the riskiness of a particular stock relative to the overall stock market. For example, Heinz has a low beta and does particularly well in poor economic conditions (simply put, people tend to give up buying expensive food, and spend more on the staple food that Heinz sells).

What about UK stocks? The UK economy is quite aligned to the European one, so sterling is unlikely to fluctuate much. There are some nice-priced global companies in the UK that could do well, no matter how the economy performs.

Pal

people have to eat

wishfulthinker

I started a forum just for these types of questions dont worry though no one uses it yet!! so they can be pesimistic. check it out maybe there will be a post!! its in SNIP

ionapaul

Yeah Roundtower2, the only equities I think I'm gonna hold on to are those UK stocks I currently own (both of which pay very nice dividends), plus I'm looking a Unilever and Procter & Gamble and other similar corporations that will do well when we are all less flush with cash! God I need to stay away from the 'Great Financial Debates' section of askaboutmoney.com, I think the bearishness is getting to me.

Like the Buffett quote, dunkamania, so many people right now are soooo convinced the good times are here to stay, that it has driven the rest of our 'fearful-o-meters' into overdrive!

x.x.x

overall i would advocate a little caution at the moment, espiecaly in Asia!
Many ipo's are delaying or pushing back there timeframes.
Fortunately for me i work in a very bullish country where there are almost as many hedgefunds as there are McDonalds and where a third of investors invest in ipo's.

I am currently working on by far and away the most lucrative deal of my life, supported by hyper professional documentation and exit strategy.

Oppurtunies are there but seem to require more leg work then previously.

silverharp

it is the usual ebb and flow, remember all the central banks have got together to squeeze the hedge funds as they have being putting up the price of commodities, add to that the unwinding of the yen carry trade and that explains what has been happening.
As the US property market falls over later in the year the FED will be itching to stop raising rates, the stock market will probably be "encouraged" to rise coming up to the US elections in Nov, so hold off for the summer or average in over the next 6 months