Mutual fund investors remain undoubtedly hesitant about diving back into the financial markets following the punishing losses incurred last year. They endured a brutal bear market, collapse of major investment banks and sharp rallies that fell as quickly as they materialized.
Because the challenges of prudent investing are more emotional and behavioral than technical or informational, a disciplined systematic approach to asset management has never been more important.
Now may be an ideal time for investors to instruct their personal portfolio manager(s) to acquire some holdings in typically higher risk/return funds. Most would probably agree, the majority of panic selling has passed.
•Canadian Marketplace: Following a painful year for investors in Canada’s resource businesses, Scotia Capital’s head of global investment banking, Adam Waterous, believes there’s still good reason to be optimistic. Mr. Waterous, probably the world’s busiest banker when it comes to energy deals, is expecting to be very active in 2009 as the drop in commodity prices leads to a merger spree, particularly in the oil sands. He does not expect prices to stay down for long, given how fast producers of oil and copper have cut back production. His view is that Canada is the indirect beneficiary of the greatest social policy ever implemented on a global basis.
•U.S. Marketplace: Gold futures fell below $850 an ounce today, keying in part, on losses in crude oil, as a rising U.S. dollar reduced the metal’s investment appeal. Analyst’s say gold headed lower as the dollar surges. Gold prices will remain sensitive to movements in oil prices. Silver is also shining these days having gone up for 6 straight days, but is now quickly approaching resistance.
•International News: China and India joined much of Europe in slashing output and jobs at a record pace in December. This is a sure sign the biggest emerging markets are wilting under the recession gripping industrialized nations. Economists and policymakers had seen China, Russia, India and Brazil, with their vast markets and rising wealth, as the engines of growth that could save the world from recession. Those hopes are fading fast and forecasts are getting gloomier.
…..Doug T
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