In realty, it's not all that worse as feared for anyone or any particular nation, like it used to termed and compared to World wide recession. The Government's intervention and strategies to save the financial markets have backfired, as for bailout or other regulations.
For US markets, the strong pro market steps by Government, US central Bank 'Federal Reserve' and other US Government agencies has been presumed as the signs of caution, those quick moves considered as the extreme measures taken by Government to control the uncontrollable or out of hand financial situation. As the big market players were in a 'wait and watch' mode. In my individual opinion, Government's first priority should be 'let the people experience themselves that the crisis is on the verge of passing out. Also the crisis has lead to bottomed out markets and sooner before general expectations the markets will be going to consolidate.
This is the time that government let the markets to mature themselves from experiences and should restrict its concentration towards finding out what went wrong and to make fool proof tactics regarding the action plan that this will not happen in future and not towards the expectations of the big investors cartel, Sooner or later they will come back and they have to' but the government again surrendering under the pressure built up in the financial markets.
Let the prevailing sentiment sway on its own, One cannot and should not try to do anything to change the panic stormed out in people's mind, but as the storm has gone its just a matter of time when things going to stabilize and when the smooth winds blow that will be the time that government put the sails down to go ahead with the support of the positive winds of changed sentiment and little effort to help will be great deal to boost up the markets trend. The time is to consolidate and the time for actions will follow afterwords.
In the previous article I mentioned that the question arises' Is this the time to change the basic factors of the financial system and economy? Here is the affirmative response from the government today.
In another quick unprecedented step regarding policy decisions, Federal Reserve's on Tuesday move to backstop the commercial-paper market to increase the money inflow in the capital markets, the latest move government has taken to redraw the rules under which U.S. financial markets operate. The plea here is the ongoing crisis in global financial markets that has forced regulators to work out for the process of the policy, which can takes months or years of time to debate.
Also adding many of the new powers that have been authorized by Congress, such as higher ceilings on federal deposit insurance was approved at the last minute with little' if any discussion.
While taking all the factors into consideration, This seems to be the time to start building the portfolio in equities and also the exposure must be anywhere around 10% to 25% as it is advised to carry on with wait and watch approach but the immediate action is required because the securities are trading at the lowest valuations after a long time, this helps to build the portfolio in view of healthy returns within the duration of one or two years.
If someone have not left with the investment surplus because of the full investment positions before the markets downfall, its the very much the fault of the investor that invests with the highly aggressive strategy with the highest level of risk, and this is the case how the markets behave if you play without doing your homework and research. Remember' One should not have put all the investment surplus in equities when the markets are in the Pink of the health and giving the option to book profits, Last but not the least always keep the surplus funds more than you have invested for the situations like we are witnessing nowadays.
