Yevhen Pentsak's advice: danger, blazing optimism! Take extra care to shield investments

Tags: investment portfolio, market, fund market, Yevhen Pentsak

Headlines of the week: no longer in equilibrium, the governmental system in Ukraine can be a threat to national security, world stock markets in decay, Ukraine’s market counterfeiting the move.

Politics: slowly but surely Ukraine is been involved into political struggle. In fact, it’s a struggle between populism and ill-natured criticism, and also a never-ending fight for national resources that are being served for free. The prime-minister keeps blaming economic woes on the global crisis, though it’s obvious enough that Ukrainian type of crisis is but a purely home-brewed thing. In fact, it’s a consequence of inefficient regulatory measures of the National Bank, the result of bankers’ fast and loose play on consumer credit market as well as the outcome of rotten-to-the-core governmental system that embraces various political circles – from President’s Secretariat to some members of Parliament and ministers.

There still remain enough national assets to be privatized - like land, mineral resources and forests.  There’s also population enough in this country that can be levied with innumerable taxes and the indulgences are ready to be granted to the elected few. It will take generations of Ukrainian politicum off springs to keep the above “law and order” lasting.

There is a notable number of underdogs on Ukrainian political stage but neither their electoral programs nor comprehensive plan for development of the country is yet to be seen. And again, the voter in Ukraine is supposed to be choosing the lesser of two evils. We are learning democracy, getting to discern the truth, desperately trying to weigh in the balance of the candidates for presidency.

President Lukashenka has fallen into disfavor with Russian authorities for simple reason that he has had guts enough to protect national dairy manufactures. How long does it take for us to become capable defendants of our own national interests, either from Russians or from rotten-to-the-core Europe? So long as the latter is a champion of economic parity and mutual respect only in word? Only the strong are worth to be respected as long as they respect themselves, too.

Stock market: early summer correction is indicated here as we had anticipated last week. Banking industry stocks are notably softening. In my opinion, the market will keep sagging up till mid august with summer rally on start afterwards.  Gold was dropping from $955.00 to $935.00 over the last week. It will be a good bid, once has hit $900.00 per troy ounce.

Real estate: I guess it’s going to keep downtrend in view of bad expectations of the public at large. That type of apprehensions will cause further fall over November-December, 2009.

We still keep holding to portfolio mix of

  • 35% - UAH,
  • 30% - dollar,
  • 30% - euro,
  • 5% - gold (bar and paper).

Hope you will enjoy sunshine at luxury beach of the investments! Always keeping in mind that we must protect our investment body from excessive exposure to optimism! Stick to ancient Chinese wisdom: “If you face the sun, the shadow will always fall behind!

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See also:

Мысли среди недели: индуктивные и дедуктивные методы исследования фондовых рынков

Очень часто мне приходится дискутировать о применимости тех или иных финансовых теорий к текущему анализу рынков, осуществление на его основе прогнозов и инвестиционных решений. Еще чаще мне приходилось наблюдать за спорами теоретиков и практиков на финансовом фундаменте. Меня всегда удивляло, почему они спорят? Ученые и исследователи используют общепринятые модели, описанные во всех классических учебниках, их знает каждый магистр по финансам. Почему выводы этих моделей не нравятся практикам?

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