[MoneyGuy]

In the interest of continuing education.

Here are some thoughts for those of you considering what to do now regarding this current market.

• Panic selling stage appears over, market now focusing on earnings.
• There are three key criteria to end a panic and we have seen the first two: government initiatives to stimulate the economy, and central bank intervention. It takes time for these to have an effect. The third criterion is for buyers to come back into the markets and this may be starting.
• Analysts and fund managers feel that stock prices are close to their lows, though the markets may trade sideways for a while.
• Valuations are within 15% of their lowest levels of the past 50 years.
• Now seeing a global recession that will probably last into 2009. But recessions are a normal part of the investment landscape.
• Also need to remember that there are now six emerging economies with GDP over $1 trillion and they continue to grow, though at a slower pace.
• Remember that the stock market is a forward-looking indicator and typically bottoms while the economy is still in recession.
• There is likely too much pessimism; confidence will probably start to recover soon.
• Interest rate cuts and other stimulative measures will have an impact, and the global deleveraging process is well underway.
• Market lows are a good time to be putting capital to work.
• Mutual fund managers are starting to deploy their cash because valuations are so attractive. They’re buying with the understanding there could be further declines, but valuations are compelling and they don’t want to be on the sidelines when the turnaround starts.
• Since the Second World War, the average rebound in the U.S. market from the bottom has been 34% over the following year and 51% over following two years.
• The market turnaround, when it comes, will be abrupt, likely with breathtaking daily gains. But it will start when the environment is still bad.

This info is for what you feel it’s worth. Happy investing.