Wednesday, November 23, 2011

The world's not coming to an end --- yet

To hear many in the media tell it, the economic world is crashing and burning. It is in a bit of a tailspin, I'll admit. But, it has a long way to go before it is panic time. Corrections, even big corrections, are normal.
Europe is well off its game, as is the United States. China is slowing. We could yet be in serious trouble. But with some luck, we will be through this rough patch in eighteen months to a couple of years. As a chap on BNN pointed out today, the stock markets are usually the first indicators pointing the way to the downturn's exits. That means the markets could be looking at a return of the bulls in a year or so.

But right now, now bad is it really? Well, I have been buying on dips and two recent buys are still on the plus side of the ledger but the rest are wilting.

  • BMO Equal Weight Utilities Index (ZUT) is still up 4.38%.
  • Claymore S&P/TSX Canadian Preferred Share Units are up .16%. Not much, but still in the black.

Meanwhile the following are all down and showing signs of further weakness:
  • REM down 2.9%
  • PWT-T down 5% 
  • AUSE is also down 5%.
  • The RY-T that I just bought is down 2.7%.

I'm getting slower and slower rising to the bait of new lows. I'm setting goals. If and when RY offers a yield of 5.5% based on the share price, I'm buying. If PWT drops into the $12 range, I'm buying. And CFX has dropped more than 10% since I started following it. I expect a cut in the dividend come the new year and this should result in another price drop; At that point, it may be a good dividend paying stock to buy.

If I'm right, and I've been wrong many times in the past, but if I'm right, buying on the upcoming lows will position one to enjoy some wonderful gains in the recovering markets. Be warned, I'm always the optimist.

(If this gets really nasty, it could be a good time to look at buying: CPG, IPL.UN, EMA and POW. There are others that will be worth a look, but these are the ones on my wish list.)

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