When I logged on to bloomberg this morning, I was taken to near disbelief to read the heavy slump of Dow Jones on yesterday's (Monday, Sept. 29) trading. The news went on to say that the stock market was in a frenzied reaction to the House of Representatives' voting down a US$700 billion rescue package. The shock took a heavy toll of Dow Jones, resulting in the market shedding 778 points, making it the worst day ever since Great Depression crash on October 29, 1929 (popularly known as Black Tuesday).
On this day alone when investors were left shaken, a total of US$1.2 trillion of market value was erased from U.S. stocks.
Looking at the present scenario, we are like driving in a fog. Really, we are at a loss as to what to expect. How many more banks are on the line to go bankrupt? Where is the greenback heading to? Is U.K. destined to be worse than Uncle Sam? How about Euro Zone - Is it going to get it too? And our dear ringgit - Is it facing a sell-down pressure? The dwindling oil price - By how much more it has to go down before stabilising? The U.S. monetary policy - Is Fed under pressure to cut rate? The list seems to be endless.
In a market like this, cash remains the best option.
Have a good day!
"I have never lived through something like that," said Stephen Jarislowsky, the 83-year-old chairman of Montreal-based money manager Jarislowsky Fraser Ltd.