Bear Market Until 2012

Bear Market Until 2012

The global stock market could be stuck in its current bear-market trend until 2012 and beyond, but next year could give investors a strong bear-market rally to trade, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC.com.
Major stock indexes such as the Dow Jones Industrial Average, FTSE-100 and indexes in Asia could all face "major declines, possibly all the way down into 2012, 2013," Jadeja said.
more .... Charts: Bear Market Until 2012 - How to Trade It - Economy * Europe * News * Story - CNBC.com

 

I tend disagree.

I think that there is a good chance that the DOW will start bouncing back once the US starts depreciating their currency value again (sometime in 2009), obviously this won't represent "real" gains, but that hasn't stopped people in the past from redeveloping bullish sentiment on the back of artificial growth.

I don't know what effect this will have on the rest of the world's stock markets. Obviously with the weaker USD this will adversely effect many emerging and western economies which export heavily to the US.

 

Thanks for the link Tropo.

I don't know anything about this market strategist but it appears his predictions are based on technicals or reading the charts. I am sure we can get many opinions from forum members for the same chart.

As far as where the markets will be in 2012, probability will say the markets will be higher given the substantial falls thus far and also given that markets tend to rise over the long term.

In the short term, heads or tails anyone on the market rising or falling?

 

"In the short term, heads or tails anyone on the market rising or falling?"

Short term:
DOW may bounce back towards 9090, or pull back down to 8200.
Important level (support) on DOW is at 8485/95

 

Many said the same thing in 1930 and 1931 before the market tanked. I think we are in the beginning of a deflationary recession that is in a similar league to the great depression and as such we probably won't see a sustained recovery until the asset prices have sufficiently depreciated, so the time until recovery may well be in the hands of policy makers.

For example, it wasn't until Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34 that the economy was snapped out of a defaltionary cycle to begin to surge ahead again.

I think the Fed (along with the BOJ) finds itself in somewhat of a similar situation with the USD.

 

I was just re-reading this thread, and I'm presently of the opinion that most developed economies will struggle to make significant "real" gains on both the stock market and in their economies over the next few years.

However I'd really like to know what people think about the oppurtunity for investment into emerging markets?

I'm personally quite bullish on investing in BRIC economies in the back half of 2009 for the long term.

 

Hi Chris

Most market analysts and commentators believe emerging markets are a great investment over the long term - and I agree with them and you. However, investing into emerging markets means you need to be comfortable with the ups and downs for this sector.

How are you looking to gain exposure to the emerging markets - managed funds, ETFS or invest diretly?

You also need to be aware of currency risks unless you hedge your exposure.

Also, why just consider the BRIC economies? It may be better to diversify with exposure to more emerging market economies.

 

I'd have no idea of the ins and outs of companies on other continents, so I would very much be leaning towards ETFs and Managed Funds.

Well I personally am not too worried about currency risk over the long term, as you'd expect developing economy's currencies to appreciate in value as they converge towards western levels of GDP. So you'd think over the longer term 5+ years that the exchange rates if anything would work in your favour.

Oh I still plan to have money in the Australian market, it's just that I'd plan to be heavily exposed to countries with great growth prospects.