So many have said so much!
G20 and the rest of the world are still out there scrambling to come up with an economic model or models for growth. All with the same agenda of getting economies back on growth mode and are well intended actions.
How many of you people out there believe that Keynesian theory of the "invisible arm of the economy", or the pendulum as the hidden arm (yes people those stimulus packages), is the key? Of caused this must not in any way cause another round of "excessive spending" (in the west its this that brought the world to almost a stop 16 months ago) beyond the ability to fund or pay for it.
Overall I'm not in a position or in any way bring to affect such models that will bring about growth. However and never the less, let's stick to this, after each downturn there is always a recovery. From the 1930's Great Depression, 1986 Global Recession, and the 1998 Financial Crisis also. Now at this juncture, the sub-prime issue, almost 2 years in it. The 1st chart shows that all recorded recessions lasted less than 24 months. The conclusion is that we are now currently 16th months into the current global recession thus data shows that it is about to end.
My thoughts are in each down turn: there are two groups. The 1st group, are people with wealth wipe-off when a recession kick's in. The 2nd group at the same time became the next success as the economy recover, this group make the most of it when the economy bottoms out.
So you and I, don't want to be in the 1st group, right! What about the rest? Guess we have the same thoughts, let's ride this opportunity. All of us merely need to grab this opportunity, we have to just create wealth by investing in this current recovery. Avoid Bonds, Fixed Income (FD) etc. Go for equities for the next 3yrs to 5yrs when it is still at a fair discount to maximize our returns as every thing is discounted and is still not at a premium yet.
My views to support the thoughts that we are new recovering is based on the following gobal indicators. Here are some latest updates:-
- Economic data in China points to signs of recovery taking place. Y.O.Y CPI drop 1.2% in August. China Industrial Output grew by 12% since August 2008.
- New Zealand economy report card show a surprise 0.1% growth for 2nd QRT 2009, said Finance Minister Bill English, mainly due to exports to China.
- US recession is bottoming out. Economists of the Conference Board said, five of their 10 leading indicators improved in August 2009 and two remain unchanged
- US home price that is track by the US Federal Housing Finance Agency (yes they like to use “agency” a lot) gain 0.3% in July 2009.
- The chief economist of Asia Development Bank predicted that Asian will lead global recovery as he see a 3.9% growth for Asia.
Thus having read the above report-cards we are now staring at the last few days of 3rd QRT. Come October 2009 we will be having indicators that confirm that major countries have registered a consecutive quarter of positive GDP growth. When a country register 2 quarters of growth then it’s officially out of a recession. Hey people let’s wait and see which country report card will read so.
That much, and now what do we do? Simple, take advantage and do some investments, than sit back for the next 3 to 5 years and watch our investment double up.
Have an investment at this current market value record a above 161% returns from a year 2000 decision (IT bubble burst and market crash). This investment fund Standard Deviation, Sharp Ratio and Beta reading has resulted in such returns till to-date of this posting. Get on to one and double up your money. Don't know which one to do you pick! You know where to get me!
Tj
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