Forex Yellow Pages

For the past seven months since the collapsed of Lehman Brothers, the banking and financial industries have taken a beat. Almost all of the financial and banking stocks in the world financial market were hitting the low point during month of February and rebounded few folds from the lows. Citigroup fall to the lowest of $0.97 (March 5^th, 2009) and rebounded to $3.12 (April 29th, 2009) and Bank of America dipped to the lowest of $3.14 (March 6^th, 2009) and rebounded to $8.68 (April 29th, 2009).

 

Now the question is when is the best time to get into the equity market? Any stock broker will answer NOW; even they already tell you to get in few months back and wait for the correction of the drop. Unfortunately you can almost impossible to get into the market at the lowest point and sell and take profit at the highest point. Most banking stocks now is almost 80% discount and I would enter the market with confidence that it will rebound at least 50% higher than the current market price. The suggestion holding period would be at least one year. The way to minimize risk is to enter slowly and acquire the shares whenever the market drops (mostly Friday because speculators are taking profit). This trend has been forming for the past few weeks.

 

The basis of my outlook is that the banking system in the USA cannot afford to collapses as the World is watching what the Obama’s Administration is doing to bail out the banks.

As this happen, improvement to the economy is through government spending and the bailout plan the Administration is exercising now. Nevertheless, billions of dollars will be pumping into the system in the next one year at least. The only worry is the after effect of the spending which may cause inflation; a positive growth for the stock and real estate market in short term, but in long term, it might hurt the overall economy.

 

I will focus my attention to banking and financial institution stocks as I believe these are the stocks that will rebound first before any other sectors. We will look further into the market in a week to come.

This entry was posted on Sunday, May 3rd, 2009 at 6:47 pm and is filed under My Blogroll, Trading & Investing, World News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.