Saturday, 17 July 2010

Double-Dip is Here! Prepare for a Deflationary Depression

It's not looking good for the world economy!

The American market has just tanked 3 per cent in a day and Nouriel Roubini is calling a double-dip recession. I am really worried because I have about 75% of my wealth exposed to the stock market and I just know the stock market will tank. I was close to 100% in stocks during the recovery after the GFC, hoping to take advantage of the stimulus-fueled recovery--and it worked out well!--but for the last seven months I've been worried about a double dip recession and have gone into cash and bonds, but unfortunately it seems like I could not buy cash and bonds fast enough. In desperation, I am thinking of selling stocks in my retirement fund, which should see my overall stock market exposure reduced to 60% which I think is reasonable. The only problem with this is that switching investments in your retirement fund is not a quick process and may take a fortnight. Between now and next fortnight, a lot can happen in the financial markets.

No comments: