Tuesday’s Drop: Is it just China’s bubble? Or is it America’s too?

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It’s been three days since Tuesday’s large point drop, and the markets haven’t really recovered yet. Should we be concerned?
Chart from Yahoo! With Thanks.

This is just a personal opinion: but I’m not concerned at all. Why?

  1. The markets have risen steadily for months without a correction. In fact, many people believe that a correction was coming anyway.
  2. I’m not speculating in stocks at the moment. I do have some positions, but I have sold out my Tech stocks (taking a loss in the process).
  3. I don’t use money that I need or (I hope) will ever need.
  4. I wasn’t totally invested. In fact, up until this month I was sitting 25% in cash. Right now, I’m still about 11% in cash.
  5. I’m investing for income at the moment anyway. The stocks I have produced a fair dividend, albeit with some risk.
  6. With cash waiting, a correction like this could open opportunities to buy good stocks at attractive prices.

I don’t usually blog about the stock markets at the moment, since I don’t really have much expertise in them. But my hand was forced when I read John Mauldin’s latest newsletter Global Market Brief: China’s Engineered Drop written by George Friedman.

In the letter, he notes some scary statistics about the balloon that was developing China’s stock markets:

In January, the number of total traders on the Chinese exchanges grew by 1.38 million, an increase of 134 percent from a month earlier, while stock turnover was up 700 percent from a year earlier.

Given the penchant for Chinese to gamble anyway (and Taiwanese, I may add), whenever the stock market or property prices start to rise, or the lottery jackpots get bigger, we will see this phenomenon. Friedman notes that this is the first time that Chinese stock markets have had a major effect on Global Stockmarkets. One thing I’m sure about, this is not the last time!

I’d certainly welcome more informed comment from my readers…

Debts Mounting? Can you pay them back?

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There are times in your life when you will find that your finances just get on top of you and you start to despair about whether or not you will ever escape from the debt, right?

Perhaps you have unsecured debt on several credit cards (or more?), perhaps you have little cash in the back (or none), perhaps there is a bill due (or several?)… It’s at these moments that you really need to get an action plan together! It’s the one way to get out of the situation.

There are two temptations at this point, though, that will not help. The first is to give up altogether and just let the situation roll on. The second is to look for a temporary fix: another credit card loan, a consolidation loan, a personal loan, … But without having a concrete plan of action in place and determination, neither of these solutions will work.

There are a number of companies that specialize in helping people deal with debt management and can help you devise a plan of action to get yourself out of debt. In addition, they will teach you strategies that can help you manage your cash, negotiate to lower your debt repayments, and create a breathing room for you to put your finances back on track.

A company like OneCareCredit will help you to do this, but you still need to become more educated about your finances as well. Naturally this doesn’t mean you become an expert in financial management. But you will need to learn the tricks and strategies associated with personal money management. For starters, you will find lots of good debt help resources in their knowledge base.

When you first recognize there is a problem with your finances, it’s important to take stock of the situation, seek advice, draw up a plan of action, and make your best attempts to carry it through. Naturally, you will have problems, but you must resolve to keep working at it!

Sponsored by OneCareCredit.

BizIdeas #1: Start your own Education Agency!

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If you have any involvement in education or TESOL or a similar field, you may like to consider this business idea: Starting your own Education Agency

Steve Sutherland has been an education agent in Taiwan for four years and manages a ‘Study Abroad’ forum called AgentsChat for International Students, Education Agents and Schools. He has written about this industry in an article called ‘Start your own Education Agency‘ that you can find on his discussion boards.

You’ll also find him posting about this on Forumosa about this industry.