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Originally Posted by Slava
First let me say that this is one of the stupidest things that someone can do...try to predict the stock market! But with the other investment thread being severely de-railed into a dsicussion about oil workers vs. auto workers and things like that I figured it was time for a new one.
I also feel somewhat remiss about not posting last year when I was moving the bulk of my clients in to cash....so here goes. Before I make any predictions here though let me state unequivocally that this does not constitute investment advice, and like any good workout plan you should consult with an advisor before you implement these things!
Basically given the current cycle my position is that we are set for one more re-test of the lows. I would suggest that this will take place in the first week of December and things will bottom out right around the first. My suggestion for my clients will depend on a few things; if you are buying on a disciplined schedule (i.e. once a month or more frequently you have a purchase that comes out of your account) you should continue with this.
If you are not on a program such as that however you should really think about moving to a cash/very conservative position. Its a temporary situation and you will want to buy back in before the end of the year in all likelihood. I would highly, highly recommend this if you are in a position of holding non-registered investments specifically to crystallize the losses you have likely suffered.
What in the world do I base this on? Well there are a few things:
A) The last day for Hedge fund redemptions is on November 30th...you can bet that if people are eligible to take money out and that is their last kick at it than there will be some serious money moving.
B) The fundamentals in the market indicate that we are not quite done yet. As the date for a recovery begins to push back into later 2009 the bottom of the market moves a little backward with it. My impression is that the bottom is 60% of the way through...as the trough deepens, the 60% mark moves as well.
I say one more time for the record, that this is purely my opinion. As a lot of you may know I am not one who believes in trying to time the market, because it is relatively impossible...however I am also not terribly interested in watching everyone else ride it down and then back up again! I would be extremely interested to hear with others have to say though, which is a large part of the reason that I post this!
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Good to hear some professional tips. Just be sure to update us when to get in! Far too many people explain why thing happened, but it's good to hear some predictions about future happenings.