Recession, what stock can buy?

Again, the world has been facing economy turmoil since 1997. Some say it is the worst ever. Malaysia is not exempted from having negative impact of the world recession.

What is the effect of the stock market? Stock market is very sensitive with the economy progress, as economy plunged stock market around the world has also plunged especially New York Stock Exchange. In last October 2008, it has plunged as much as 900 points, followed by others stock market which plunged drastically.

There are some questions from investors?

Can we buy stock? And what stock can we buy?

To answer the first, the bellows questions will be the answer;

“Based on the past experience do you believe economy will recover? Do you believe with the economy circle?”

To answer the second;

“buy cyclical stock with the very strong fundamental. Cyclical stock is the stock which the price moves in tandem with the economy movement”

In Bursa Malaysia, stock related to construction, financial/banking and plantation are cyclical stocks.

During the economy downturn, the best strategy is selecting the stocks which has the combination of cyclical and income stocks characters. While you holding and waiting the stock price to go up you still can enjoy the dividend. Do not forget to set the sales price target.

Why Warrent Buffet became a richest person in the world?....because he always believe "there are opportunities in the crisis". 

- Sabri Jalil