I am not a pessimist but following article is good for market prospect, IMO.
Equities in Long-Term Bear Market: Analyst
Published: Wednesday, 10 Aug 2011 | 1:56 AM ET By: CNBC.com
Global stocks bounced back on Wednesday from their steep declines in recent days. But don't be fooled, says Viktor Shvets, Head of Research & Strategy at Samsung Securities Asia, who believes equities are in a long-term bear market.
"We are probably going to be in a bear market for 5-10 years," Shvets told CNBC on Wednesday.
"I think what we are seeing is a retracement of some of the losses we sustained," he said, adding that it was still possible to see big rallies during a bear market.
"When we talk of structural long term bear markets, that doesn't mean that you lose money all the time," Shvets observed, noting that the biggest rallies came during the 1930s depression.
"We actually will have periods of significant bear market rallies. Those rallies quite often are much more powerful than a normal cyclical market would be."
Because the current market condition is making it hard to value assets, investors should be cautious in positioning their portfolios, according to Shvets. "As soon as multiples are too high or earnings are too excessive, de-risk your portfolio down. As soon as you feel the risk capitulation, put back the risk on,? Shvets said. ?It doesn't necessarily mean you are choosing specific stocks or specific sectors. You are choosing risk versus lack of risk.?
Others believe the overall uncertainty is rendering this a traders? market.
"You can't go with trends for now because there simply is no trend for now," Enzio von Pfeil, CEO, Commercial Economics Asia said.
"You want to be just trading these markets, looking at financials and undervalued plays, looking at high dividend yielders...but very much with an eye to getting out so liquidity is key," von Pfeil said. "You want to be in liquid stocks, not in illiquid junk."
Scott Redler, Chief Strategic Officer at T3live.com agrees. He recommends techs such as Microsoft and Intel.
"I think that stocks, or companies, that have the cleanest balance sheets with the most limited debt that have the capabilities of growth will be the areas to be," Redler said. He had used the recent market decline to buy into Apple [AAPL 374.01 20.80 (+5.89%) ], Amazon [AMZN 205.09 11.39 (+5.88%) ] and Baidu [BIDU 143.64 13.19 (+10.11%) ].
"I would forget about the second, third tier stocks in any groups right now, and stick with what is acting best," Redler said.
