As an investor this is my first downturn. What a recession it is turning out to be? In relative terms, I do not know how bad this recession is. Whoever I talk to, it seems everybody feels that this is the worst one and would perhaps be the most difficult one. Another aspect that I have observed is the folks in 20s and early 30s seem to be using this as an example to not believe in stock market, or scouting for safety, or losing their entrepreneurial spirit. Once again media seems to uphold its traditional values of sensationalism and harping on few themes. CNBC will make you feel that everything is fall apart the next day.
Some the media themes now-a-days are China’s domination, India’s rising potential, Dollar’s demise, US losing its steam, various type of flations, and few more gloom and dooms. Somehow the focus seems to be eased away (not gone completely) for banking system.
The best way to deal with these multiple issues or themes is to diversify your portfolio which captures the essence of these themes.
At work I have (had?) a coffee and lunch buddy. We used to get into these endless discussions about economy, emerging markets, and stock markets. On many occasions, our discussion use to end at “wish we get one more opportunity to invest at market bottom”. Guess what, we didn’t have to wait longer. The wish has been fulfilled pretty fast. That’s the way I look at this market. Like all fingers not created equal, same way, all stocks are not created equal. There are some strong, some weak, and some carp out there. All I need to do is pick some strong ones.
Now that I am investor, I wish, we get to one more shot at the market boom. History shows eventually we will get one.
There is dividend stock for each and every theme that media pundit discusses. In some of my earlier post, I have shortlisted, discussed, and analyzed:
- dividend stocks for commodities;
- dividend stocks for international markets; and
- dividends stocks for dollar’s demise.
So far, I have analyzed few and I am continuing to analyze the remaining ones. In addition, I have also started the process of short listing stocks to hedge against the three flations (inflation, deflation, and stagflation). I will provide an update when I am ready with my shortlist. Meanwhile, if you have any suggestion for stocks to hedge against any of flation, please let me know by leaving in comment section below.