Confidence on Stock Investments

We are in a very volatile market, and the people are very concern about their investments,

Some people have said that when the Index’s gain some points, the market is good, but we have seen that one day the market get up and the other immediately get down, , one day the NIKKEI is gaining 4, 2% and the analyst said that the S&P 500 will recover, but in this year we have seen the major “systematical failure of all the history” after the great Depression.

I remember when Warren Buffet tried to help to maneuver the “Recession”, by offering to reinsure $800 billion of MBIA, Ambac and FGIC (companies managing municipal bonds). And now the biggest Mortgage insurance AIG has been saved by a Government Bailout.

So, listening to some experts as Suze Orman we can identify 3 factors we have always should pay attention to when the Market analysis comes.

1) UNEMPLOYMENT (UP)

2) ECONOMY GROWTH (EG)

3) REAL STATE (RS)

If we put great attention to these factors the “Market confidence equation” will be:

+(EG) -(UP)+ (RS) = Bull Market

 +(EG) +(UP)+ (RS) = Bear Market

-(EG) +(UP) - (RS) = Bear Market

-(EG) +(UP)+ (RS) = Bear Market

So, even if you don’t have great knowledge about brokerage or investments, you can analyze by yourself what is going on in the market.

And depending of that, here are some recommendations, which are “Vox Populi” on investments:

When is a Bear Market:

A)     A)Maintain your money exactly were you have. Don’t enter in Panic by taking out the money of the banks.

B)     B)If you have some money that you will require immediately, take out of your investments.

C)     C)Maintain a percentage of your money for Long TERM investment

D)    D)Pay attention to other kind of investments: as Commodities and right now some people are investing in GOLD

When is a Bull Market:

A)     A) Diversify your investments; invest in many stocks of different sectors, invest in Mutual Funds

B)     B)Establish  your long term strategy

That’s all for today, and we have to pay attention to the new Bailouts, remember that the U.S government has invested $500 billions of dollars to save many institutions (Freddie Mae, Fanny Mac, AIG and proximately …, we have to see what happen  in 2008.