whateverworks

Another (Brave New) World - Question of the Week

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The recent down trend and volatility are not affecting my portfolio decisions because I decided back in August that we were in for a long bear market with occasional rallies. The beginning of this contest coincided with the beginning of the downturn. My initial group of companies plummeted like a stone. Ideally, I would have switched to a shorting strategy; however I don't have any skills in that area. So I quickly modified my overall basic strategy by beefing up on foreign stocks and looking for bear-resistant industries. This is an ongoing search.

At the beginning of the slide, I read that ARMs will reset through March '08; therefore I predicted that this drag on the banking system, the construction industry, the economy and everyone's spirits would maintain an overall decline at least through the first quarter of '08. I was hopeful that during the summer of '08 banks could vigorously sell off the remaining foreclosed properties and we could start getting back to normal. Now, withmore heavy dominos falling than I'd thought, I'm looking toward lasting recovery starting in 2009.

More importantly, I think this slowdown, added to the falling dollar, has accelerated some long-term changes. Everyday investing in foreign stocks is not just coming; it's here. Permanently. A year ago investors were buying ADRs. Six months ago foreign ETFs were the newest, hottest thing. Today investors are looking for brokers who have relationships with traders located in foreign countries so as to buy and sell directly whatever they want while minimizing the necessary fees and commissions. I thought these changes would take place gradually over 5 or 10 years but instead they are taking place in 2007.

Worldwide markets are even more of a challenge and interesting than domestic. The fast change to global investing is great. As "Larry the Cable Guy" would say, "Git 'er done!"