Panic Investors Selling; Patient Investors Waiting

Equity stock market records five consecutive weeks of decline. Individual investors start to worry about the portfolio and further trim down positions. Market makers have created a selling momentum to make profit from derivatives. Patient investors are watching for symptom of market bottom.

With plenty of cash on hand, well-off investors may begin loading on portfolio when market stabilizes. Market makers are already thin on stock positions and individual investors are taking profit on the recent rally but still keeping the core positions. Day traders are riding on the downtrend speculation created by market makers. Market may continue to decline as investors hesitate to buy despite attractive valuation. With large amount of capital flow seeking return, market may suddenly rebound when investors return to optimism.



Why safe corporate bonds aren't so smart anymore
Companies deemed good for the money are raising trillions selling bonds to investors who can't seem to get enough of them.

Some bonds are throwing off interest so puny that investors are already losing money to inflation. Others pay higher rates but won't return your money for more years than you're likely to live.

Stocks were the primary target of the Federal Reserve Chairman Ben Bernanke's attempt to push people out of Treasurys into riskier assets. But corporate IOUs that earn top grades from rating agencies have been on a tear, too -- returning 31 percent in two years.

This has been good for the economy. But investors are another story.

These bonds continue to attract money partly because many mutual funds that focus on bonds feel they must invest in them no matter what the price. No one can guess when bonds could tumble but if a fund sells them and they don't drop right away, it's sure to lose investors to rival funds that didn't sell and are still collecting interest and posting higher returns -- for now.

David Wright of Sierra Core Retirement Fund is just as critical of the almost willful ignorance of risk by investors. But he's buying. He says bears are ignoring the appeal of investment grade bonds as refuges of safety in the troubled times he sees ahead. Wright says investors are courting danger in myriad other assets such as stocks, which he thinks could fall as much as 35 percent over the next nine months.

"There'll be a shift from complacency to anxiety to fear," Wright says. "And they'll gradually move into these safe haven assets."