Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Stock Markets Skating on Thin Ice! Four Steps to Protect your Portfolio

Portfolio / Global Stock Markets Nov 13, 2007 - 10:06 AM GMT

By: Money_and_Markets

Portfolio

I'm starting to see a lot of "thin ice" signs here in my home state of Montana. That's because the temperature is dropping, but it's not yet cold enough for thick ice to form on our bodies of water.

I'm seeing a lot of warning signs popping up in the financial markets, too. Oil is flirting with $100 a barrel. The credit crunch is deepening. Corporate earnings are disappointing. The U.S. dollar is making new all-time lows.


So, in my book, U.S. stocks are skating on thin ice. Cracks are already forming on the surface, and what lies under the surface could prove deadly. After all …

Last week, the market suffered its worst three-day decline in five years! The S&P 500 lost 3.7% … the Dow fell 4.1% … and the Nasdaq sank 6.5%, its largest one-week drop since September 2001!

Don't ignore the stock market's warning signs!

Now is the time to evaluate your portfolio for downside risk. Ask yourself how your investments will hold up if the market drops another 10% or 20%. And if you're not satisfied with the answer …

Consider These Four Steps to Protect Yourself from More Stock Market Weakness

Unless you are truly a long, long, long-term investor with a stomach made of iron, the " buy, hold and pray" strategy of doing nothing is the worst mistake you can make. What can you do?

#1. Adjust your asset allocation — This is a great time to look at what percentage of your portfolio is invested in stocks, bonds, cash, etc. If you're heavily invested in stocks, you may want to consider reducing your equity exposure and raising cash.

#2. Implement stop losses — These orders tell your broker to sell your shares if they fall to a predetermined price. Only you can decide what prices you'd like to sell at, but many investors choose an acceptable percentage amount (say, 10%) and apply that to each of their positions.

#3. Use a strict sell discipline — Market technicians use tools like moving averages, relative strength indicators, and other momentum-oriented tools to tell them when to buy and sell. One of the simplest market-timing strategies is selling a stock or fund whenever it drops below its 50-day moving average. But whatever indicator(s) you use, the key is removing as much emotion as you can from the process.

#4. Don't get stuck in one country — The U.S. economy is rapidly slowing and even on the verge of falling into a recession. However, that is hardly the case in other parts of the world. It's a lot better to invest in countries that are growing like mad than those that are crawling along like inchworms.

And remember …

Asia Is Still the Fastest-Growing Region and Where I Suggest Putting Some of Your Equity Dollars

I've been telling you all about the opportunities in Asia. And I've been especially vocal about many of the U.S.-listed Chinese companies that are becoming available to investors through initial public offerings (IPOs).

Reason: These new stocks have been soaring even as the U.S. market dives, and the trend shows no sign of slowing. In fact, two Chinese companies went public last week on the New York Stock Exchange, and both did quite well!

Nepstar's drug stores are all over China, but there's plenty of room for more growth.

One of those IPOs came from China Nepstar Chain Drugstore (NPD), the largest retail drugstore chain in China. The company has 1,791 drugstores in 62 Chinese cities. And even though Nepstar is easily the biggest chain in China, it currently has less than 0.5% of the total prescription drug market.

In other words, the sky is the limit for this dynamic company. Investors agreed, sending the shares up 15% in their first day of trading.

The second blockbuster Chinese IPO was from AirMedia Group (AMCN) . The company operates China's largest digital media network dedicated to air travel advertising. All told, it runs 95% of the digital TV screens in China's 15 largest airports, as well as 16,000 TVs on the country's airplanes.

What's more, thanks to Chinese regulatory restrictions, foreign advertising companies are prohibited. In other words, Air Media has a very strong economic moat protecting its profits. Maybe that's why the stock soared more than 40% on its first day of trading!

Airmedia has a stronghold on advertising in Chinese airports and planes.

Just to give you a sense of how big and important Chinese companies have become, I want to point out that the market value of Petro China, a government-owned oil and gas company, rose above $1 trillion last week, making it the largest company (by market cap) in history!

Yup, bigger than ExxonMobil or General Electric. In fact, Petro China is now worth more than the combined value of those two companies!

Bottom line: It's becoming pretty hard to ignore Asia these days.

Fortunately, you don't have to! This isn't the French Foreign Legion. Nobody is forcing you to invest only in U.S. stocks, especially since an avalanche of Asian issues are now listing on domestic exchanges as American Depositary Receipts (ADRs).

Heck, buying stocks like Nepstar and AirMedia is as easy as buying Microsoft and Motorola!

More importantly, I believe that partially diversifying out of vulnerable U.S. stocks, which are skating on thin ice, is one of the very best defensive moves you can make today.

Best wishes,

Tony

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Gerry
02 Mar 12, 17:08
Gold manipulation

Then the way to unrig this crap shot is to take delivery of pcysihal and call thier bluff. The manipulation exists is Gold and Silver. Silver is historically some what connected to gold and being a relatively tiny market would be a lot easier to force the shorts to cover. There is a lot more Gold than Silver because Silver is also an strategic, industrial and investment metal. If everyone took out a Credit Card (or two ?) issued by a "bullion bank" (Chase,Morgan,HSBC etc.)and maxed them out buying Silver then the pcysihal demand would in essence "short circuit" the shorts. They would be in a position to sell back (at a profit) to the "bullion banks". Silver works to do this because there is so little of it available unlike gold. Ted Butler has stated that there is now less silver than gold because we have used it industrially. Buy Silver to unwind the Gold Carry Trade. Forcing COMEX to default on Silver would expose the Gold manipulation to all.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in