Equity market returns after bear markets are positive and sometimes the rebound is higher than the percentage of decline. So investors with a long-term horizon can take advantage of lower stock prices when markets are in a downward trend. The following graphic shows the cumulative equity returns once the bear market ends: Click to enlarge …
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Equity markets fall and rise for a multitude of reasons that no one can predict. So investors should not try to time the market moves. This is especially important for ordinary investors. Sophisticated professional investors such as hedge funds and other traders are able to reap fantastic profits from taking advantage of volatility in the …
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Many U.S. companies hold billions of cash and cash equivalents on their balance sheets. A report in The Wall Street Journal in June of last year noted that non-financial companies hoarded an astonishing $1.84 trillion in cash and other liquid assets as of first quarter, 2010. Some of these companies have put their cash to …
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One of the main reasons to invest in foreign stocks is for portfolio diversification. In the past, the correlation U.S. markets and foreign markets were very low which lead to foreign stocks going higher when US stocks went down and vice versa. However in recent decades the benefits due to international diversification are declining. According …
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Baron Phillipe Rothschild: “The time to buy is when there’s blood in the streets.” Warren Buffet: “Be fearful when others are greedy and greedy when others are fearful.” Extreme turmoil in the market generally excellent creates buying opportunities. Smart investors tend to take advantage of such situations to add high-quality stocks at rock bottom prices. …
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