Well, even Moody’s which held back from lowering the credit rating of the sovereign debt of the US has begun to see that the economic outlook of the US is indeed weakening. Of course this is Moody’s way of saving face. With the administration’s onslaught against the S&P downgrade clearly failing as most analysts and investors felt that the US deserved, Moody’s had to save its own hide and throw a grimmer than usual forecast to be taken seriously.
What this Means For Stocks
As I have been saying for the last month we will be seeing stocks fall 20% or more. The manufacturing data is less mediocre and global production is slowing and stands at 2%. As reality is beginning to set in investors are pulling back. Don’t be fooled by some of the gains at the end of last week and yesterday. This is very similar to 2007. There will be ups and downs, but as the recession sets in the market will trend lower over all.
Don’t Be Afraid
There should be no fear in your trading and that means if you are walking around sweating because you are afraid losing you retirement or your wife’s anniversary present, take your losses now, but this is going to be a serious ride. First of all most of this is out of your hands. Lots of turbulence is flowing from the Euro Zone and it will continue to get more stormy as Sarkozy and Merkel try to stem the coming tzunami. This will have the power to shake American banks as well.
So stay strong and look up and invest using your brains. Don’t go after risky investment. Stable tech and multinationals are the way to go, just don’t be afraid as gets rocky.
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