Looking back @ 2008 & hopes for 2009 !!!!

Now that last day to book loss/gain is over for 2008......we have a complete picture of where 2008 ended.....Following are the numbers......:

Dow @ 8515.55 Down from 13494.30 a loss of 4978.75 or <36.9%>

S&P 500 @ 872.80 Down from 1488.01 a loss of 615.21 or <41.34%>

Nasdaq @ 1530.24 Down from 2697.77 a loss of 1167.53 or <43.3%>

The above losses took a HUGE toll in equity of all investors/traders.....as one can clearly see that there was no place to hide....so if you were lucky to be in Dow index your loss was 36.9% but if you were in Nasdaq index your loss was 43.3%.....add margin leverage or 40 times leverage of hedge funds.....then you are looking @ total wipe out or OWING money.....NOT a pretty picture @ all......

Majority of loss was incurred from June onwards...so it was a relentless downward dive in markets in the last seven months.......

We are 234.76 above lows in Nasdaq or +18.12%

We are 131.78 above lows in S&P 500 or +17.8%

We are 1123.28 above lows in Dow or +15.20%

It is important to understand what was the reason for total collapse in Equity in 2008......it was deleveraging of uncontrolled GREED which caused the financial system to UNWIND to non-operational level...NOT anticipated/predicted by Fed,ECB,Investors,Traders,Hedge funds,Banks or anyone with any financial know how......

Did we LEARN anything from 2008 FINANCIAL TSUNAMI......????

Yes ...it was a BITTER pill to swallow by proponent of FREE MARKET......which became RAMPANT with PROFIT @ all expense......

Credit was abused by millions which is ending in total collapse of housing prices in US & Britain which COMPOUNDED credit availability as equity evaporated from Houses & Stock Market.....

So...majority are facing HORRENDOUS liability & no equity to tap......a recipe for disaster in any economy.......thus a COLLAPSE in stock market......as economy is SEVERELY CHOKED UP......

So Economic FALLOUT became very evident to everyone as we close 2008 trading in Stock Market......as stock market is a great predictor of future equity prices.....so 40% SLUMP in equity prices in 2008 was NO accident.........

So .....

How about 2009 equity prices.......

Fed,ECB,China,Canada,Middle east are all PUMPING money to JOLT the economy out of COMA.........

DO they have chance to UNFREEZE credit?

DO they have MEANS to KICK START GROWTH in economy?

Will stock market RESPOND to resolution of CREDIT issues?

Will economy GROW again?

Will company start GROWING profit again?

The answer to all of the above is a confident YES !!!!!!

I am looking @ 2ND half of 09 as the time for GROWTH.......in world economy !!!!It will be a simultaneous GROWTH in GDP worldwide in 2ND half of 09......

As we all have learned that stock market ALWAYS predict next 6 to 9 months AHEAD.....so we MAY be sitting on a MAJOR turnaround in markets.......

I am positioning with ETF strategy to take advantage of UPCOMING turn UP in markets .....as I feel individual stocks are still VULNERABLE to market WHIMS & ANALYST game playing????

Please do your OWN due diligence & find your OWN comfort level with ETF or STOCKS.....

Here is my sector focus & $ allocation in ETF:

HOU.TO...ETF for Nymex Crude 9.9%

HQU.TO ETF for Nasdaq 100 19.6%

HMU.TO ETF for world mining & gold stocks 45.8%

URE ETF for commercial real estate 24.7%

Plus I am SHORT US$......

The logical question is ...WHY we did not get Christmas rally????

You CAN give full credit to Mr MADOFF who put the final nail on the stock market coffin by swindling to the tune of $50+ billion when deleveraging was almost complete......

As most participant have extremely LOW expectations of stock market & PESSIMISM is extremely HIGH about economy.......we are all set to move UP SHARPLY in 2009 !!!!!

Some other ETF worth looking @ are :

PKB,UYM,QLD,TAN,UYG to name a few among thousands of ETF by Proshares.Claymore,
Wisdom tree,Morgan Stanley etc.....MSNmoneycentral & smartmoney has ETF section to do some research......

Good luck on your OWN homework.

BLOG does NOT give buy or sell.

Saleem