The correction

Probably at least a month, but most of the decline in such adjustments is very fast and subsequently formed a bottom for several weeks at elevated volatility. V-shaped bottom rather should not be expected. The reason for recovery, according to my expectations will be postponing the rise in US interest rates and secure considerable monetary stimulus in China. It is possible the Fed could find a way to support the US economy, which take off extra dollars and respond to the depreciation of the yuan and the continued depreciation of the euro. Even the central bank not to take all possible and desirable market measures, the adjustment sooner or later will end when investors see attractive share prices.

What to buy

And here is the time to put the most important question – what to buy. The answer lies in the economic and market cycle. In March, we prepared a graph that combines the economic cycle with the movement of the shares of various sectors. Since there is only one change – the countries have moved forward. So China, the main “culprit” for the adjustment account contraction of its industry; US likely will also consider economic slowdown; EU and Bulgaria and grow their prospects are better compared to several months ago.

Health and non-cyclical sectors (companies for food and drinks, cigarettes, etc.) Are doing better than the market during the economic peak and subsequent decline. Proof is the rise in the health sector by 4% this year, while others are less. Least presented the financial sector and cyclical industries. Shares of mining and energy, in particular, are an exception to the usual cycle due to oversupply and high amplitude of movement of commodity prices. The financial sector in the US lagged behind due to expectations of higher interest rates, as is normal in the top of the economic cycle.