Investment Strategies In An Uncertain Market

Investing in an uncertain market is one of the most difficult investment strategies. This is probably the point we are at right now in the economic cycle. Each day contradictory stories appear in the press and online about the fist sign of green shoots appearing only to be dashed the next day by worse than expected numbers from one sector or another.

Both the arguments of the Bulls and the Bears seem equally compelling. It can’t get worse says one… oh yes it can says another.

The effect of this is to paralyse investors into taking no action at all. Not always the best strategy.

Effective research is the answer coupled with a certain amount of going with your own gut feelings. But don’t be too extreme. If you think a Bull market is approaching look for bargains and companies with strong fundamentals. By all means invest in those but don’t put everything into them.

Keep invested in defensive stocks which will rise in a Bull market anyway if perhaps not spectacularly. Keep a part of your investment portfolio in cash or as high an interest rate deposit account as you can find.

I would be inclined to err on the side of caution and remain bearish. The worst that can happen id you may miss out on the very bottom but will poised to jump in once the positive indicators become more solid.

Remember the first rule of investment is to avoid or minimize losses. Keep that in mind and you will be well placed to invest and profit from the upturn.

Updated: October 14, 2011 by admin