Vivian's Global View
06/09/2006 12:00 am EST
Although not forecasting a bear market, global investment expert Vivian Lewis is concerned about weakness over the coming months. Here, she looks at markets around the world to find those select opportunities that she still considers a a buy.
"The average decline of the 14 US bear markets since 1949 was 26.5%, from 50.5% (2002) to 8.3% (1998). Wall Street is off only about 5% from early May, so even if you pick the midpoint between the best at—8% and the average of— 26%, it may get ugly. Foreign markets, such as India, are off nearly four times as much.
"Investors should not be tempted to get in and out of the market. Average investors cannot capture every market move without daytrading, a self-defeating strategy harmful to mental and physical health. Between now and the end of October, the big money will be made on the downside. We are now at the start of a medium-term correction. Average investors should focus on capturing most of the correction while avoiding periodic counter-trend rallies and whip-sawing. Go into cash. Rigorously pick stocks to buy, hold, or buy.
"What is still a buy in this environment? In my view, Teva
"Indian growth reached a whopping 9.3% for the March quarter, an
argument for such stocks as banking firm ICICI (
"The emerging markets debt market has been hit more heavily than junk bonds,
and in our view, wrongly. Attractive is Salomon Emerging Floating Rates (