For investors, the idea that global economic growth will be lower, not just for longer, but forever, is daunting. They begin to worry that the doomsayers have it right and that we are heading for another economic meltdown. That’s the wrong fear. Because central banks are convinced that printing money is the way to go to prevent collapses and depression, the right fear is of future inflation. As this correction plays out, smart investors will want to get into holdings that will do well when inflation finally hits down the road. I will talk about that in future as well.
As more people recognize the problems of $230 trillion of global debt (not to mention unfunded liabilities) and an aging population around the world, the fantasy that global GDP growth will ever return to 4% for any meaningful time period will disappear. The realty of slow growth forever will take hold.
In the short term, investors have a few options for managing their money as we go through this process of repricing markets for slower growth.
The first option, as always, is to do little to nothing other than minor asset-allocation tweaks. People who think “Modern Portfolio Theory” has validity or are married to the idea of indexing will follow this approach. If their time frame is long enough, these folks will ride the waves and come out of it with a middle- to high-single-digit return over the next few decades. If you are looking to just barely beat inflation and have the stomach for the inevitable down periods, then this approach will suit you.The other option is to invest in value and confirmed growth in an attempt to try to beat the markets. In an up market with broader-based growth, this is a tough thing to do as the indexes tend to do well. However, in a choppy market, where value and growth are hard to find, it actually becomes easier to beat the indexes for stock pickers. As the bear market plays out, finding value and growth opportunities will become easier to invest in as stock prices decline and create bigger margins of safety. How we good know most of the stock have their burst period of 30%-80% for the 2-3 weeks, don’t fear the volatility, LET THE VOLATILITY BE FRIEND WITH YOUR WALLET. As we seen as well the energy sector’s have very low price, some of them even a 12-year’s low ! Which we good know that this is leading to a lot of sector’s in the domestic market’s to go cheaper. Let’s move forward in difficult time’s for the World..