Here is a report and portfolio suggestions from our Swiss eClub advisor.
Dear International Friend,
Many investors and experts seem surprised by the fast rebound in the market.This should not be so. A review of the S&P since 1890 suggests that a strong downward slide proceeds a war. But this review also shows there is a spike up when the war begins before the gloom sets in and there is another serious drop. The long bull only comes when the war ends and a post war boom begins.
Our Swiss advisor in Zurich Andy Kaegi agrees when he writes:
"Dear Readers, The relatively strong recovery of all major equity markets over the last 20 days rather surprises us in view of the still gloomy outlook of world economy with war and retaliation going on for an unspecified period. We do not wish to get caught in a bulltrap and therefore do not yet alter our strategy and keep equities underweighted as long as we see the upside potential limited. The fast and large short term swings do, however, offer possibilities for the short term trader; what is reflected in our today's list. For the long term investor we marked some items as "accumulate" at lower price levels, where we think bottomfishing and bargainhunting will offer opportunities for the long run. Instead of our sell recommendations (they are on equities that we mostly sold long ago and would not yet repurchase) you can also consider a call writing strategy."
Andy has given us some good food for thought and we can use this knowledge to our advantage. Investors make money whether the markets rises or falls. All that matters is accurately predicting which way the market will go. Call writing (puts) brought some investors fortunes during the recent terrorism. If you are pessimistic about the days ahead, puts are a good way to protect your portfolio. You can get more information from Andy Kaegi at email@example.com
Until next message, good global business and investing!