Enough with the Nosebleeds Already!

07/31/2008 12:00 am EST

Focus: GLOBAL

Nancy Zambell

Editor, Wall Street's Best Investments and Wall Street's Best Dividend Stocks

Perhaps the bear is not finished with us just yet.

It seems that we are back to three steps forward, two steps back with the markets around the world. This week has seen some pretty large declines, followed by some healthy and positive days.

Global exchanges were buoyant from falling oil prices (to some $121 a barrel before a slight rebound), and pockets of positive earnings news seem to be boosting them now. As well, the markets appeared to appreciate the efforts of the US Federal Reserve, the European Central Bank, and the Swiss National Bank to ease the burden on financial institutions by enhancing liquidity-providing actions.

Germany’s engineering firm, Siemens (SIEGn.DE) and the largest steel manufacturer in the world, ArcelorMittal (ISPA.AS), both led European bourses higher after reporting higher than expected earnings.

In Asia, strong results from Matsushita Electric Industrial Co. (6752.T) helped lift Japan’s Nikkei average.

Yet, not all results were so good. Sony Corp (6758.T) and Lloyd’s TSB (LLOY.L) both saw their stocks tumble because of large profit declines.

In the US, Standard & Poor’s announced that reported earnings for the S&P 500 have so far declined by 24% over last year. Consequently, we remain in the ‘some good, some bad’ situation. It’s now more important than ever that investors approach the markets and investing with a cautious eye.

At risk of revealing my true age, I think investors would do well to remember this line from the old Gladys Knight/Marvin Gaye song, “I Heard It Through the Grapevine”: “Believe half of what you see and none of what you hear”.  A little skepticism, as well as some “what-if” questioning, will go a long way to determine if an investment is right for you in the long term.

Clear-eyed advisors can help, too, of course. In this week’s Global Investing, we interview Gordon Pape about investing in Canada. Pape gives forthright advice on the Canadian dollar, as well as the tax issue with energy trusts in the Far North.

Meanwhile, Vivian Lewis takes issue with the hype surrounding the BRIC (Brazil, Russia, India, and China) phenomenon, imploring investors to analyze the companies and countries as separate entities.

Among this week’s Global Investing recommendations, Jim Trippon discusses a Chinese media company whose shares may have been brought down to an attractive level. And Jeff Siegel looks at several alternative energy stocks and ETFs.
 
We hope your week was prosperous and a little less volatile than the markets! Don’t forget to bookmark MoneyShow.com and visit us daily for important updates. We are looking forward to bringing you lots of profitable advice.

Nancy Zambell edits Global Investing for MoneyShow.com. Her opinions are her own and not necessarily the views of InterShow or MoneyShow.com.

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