What’s next


Forthcoming measures to stabilize financial markets and stimulate growth. This means recovery of asset prices, which initially will be stronger in the shares with the strong correction. Before the end of the year will again have a portfolio shifts towards sectors with better performance such as health, consumer non-cyclical industries. But it is possible that investors will prioritize more of the financial sector, raw materials and energy, which corresponds to the period of recovery in the economic cycle. This will depend on incentives and zero interest rates, purchases of shares of these sectors will have a perspective of their arrest in 2016

In practice it looks like this:

1. Purchase the next one month with a decline of shares which is greater than or corresponds to the reduction of indices for the period of adjustment. These companies must have a good assessment as P / E (price / earnings) of 15 or lower. Appropriate sectors are finance, technology, raw materials, even if relying on incentives to drive the global economy. These shares are suitable for short-term investment.

2. Restructuring of the portfolio more volatile securities to more defensive sectors such as healthcare and consumption. The most important condition is to select stocks with good score and avoid too expensive papers, among which there are many pharmaceutical companies for example.

3. bravest investors may focus on financial securities (due to zero interest rates and new incentives) cyclical sectors (automotive, electronics) and technology companies that perform well in the recovery and growth.

The correction is an opportunity for investment. Yes, the market looks expensive and dependent on monetary incentives, but fears of a repeat of 2008 is not confirmed by the behavior of investors. This is the foundation for the next long-term growth of exchanges in the world.