Markets are confronting an uphill battle against the bears across the world. Recession fear haunting in the minds of the investors and it is demising the confidence of the investors. Thousands of investors are juggling with financial problems and some of them (literally) already on the road. Financial crisis has penetrated the developing world i.e. America to Asia and Africa. Investors need to ponder over their investment strategies and must react promptly in the bear markets. All major indices across the world fell badly in the recent past. Stock markets have given up all gains, earned last year. Hence, what should an investor do? Should they stay away from the market? As a market analyst I will try to answer both the questions in this writing.
What should an investor do?
Markets all over the world crashing but at this juncture seem to be oversold. The raison d’être is investors have lost confidence into the markets. At present something unusual is happening in the markets. Investors waits for the small rise and once markets starts to recover from its lows, investors begins a new sell off to get out of the market and this whole cycle of activities throws markets into the new lows. Technical signals also start giving red signals and bears continue to hold the nerve of markets. All this happening in the financial arena only because of the investors have lost faith in the markets.
As I mentioned earlier markets are technically oversold and can recoup any time provided with investment friendly ambience, but a fresh buyout must be corroborated with the next buy out. Otherwise markets will not register over the bears. There is not much wrong with markets; these are run by the investors. Simple thing no investors no market and vice versa also holds the key. Hence investors must take wise decision over their investment and they must shed the fear and invest boldly in the markets. They should give some time to the markets for the recovery. Once again I reiterate that at this stage nothing wrong in the market, it just lack of the confidence among the investors. Otherwise the investment baron Warren Buffet (Berkshire Hathaway) would have not bought the billions of dollars` stocks in recent past.
Financiers all over the world are seeing the scenario as the best buying opportunity in recent past. Common investors are treating as Diwali or upcoming Christmas gift. Therefore the large investors should come out of the mob and invest money in the market with the confidence which will assure the guarantee for their investment.
Should investors stay away from the market?
At this juncture small investors should keep themselves away from the markets because every move in the markets deviate their strategy and this deviation can make them the victim of brutality of the markets. Hence small investors should scrutinize the market happenings and must wait for the proper opportunity to enter in the market. The large individual investors and investment firms should go in the bang- bang way. Aggressive investment strategies of the big players and combined efforts of the governments can boost market sentiment in supportive way.
As an alternative investment I would also like to suggest the investors to invest in commodities like Gold and silver because bullions are treated as safe haven investment in crisis situation. Small investors and retail investors should keep one eye over precious metals too because at present these commodities are at the lower levels and future seems to be brighter than stocks. Gold can shoot up any time in near future and it may perform better than the stocks, later may take more time for the recovery. Hence investors must not keep their money idle in the safes. They must put the money into the system so that money cycle will not get perturbed and once jammed money will start flow into the markets automatically financial system will recoup because money is the blood of the financial body.