Enterprising Investor Forum

2009 Outlook Monday, January 5, 2009

As discussed in our previous post, we are still of the opinion that 2009 will be a volatile year as things settle and as the markets try and pave the way for a recovery. Again, we feel 2009 will be a very difficult year for the real economy as the world will continue to slip deeper into recession.

In terms of investing opportunities, this will probably mean that:

• defensive equities will remain the favored investment
• high quality corporate bonds will warrant the risk of default
• emerging markets and commodities will continue to be very vulnerable and volatile

Two sectors that will likely remain weak for most of the year but that we keep on following are Real Estate and Private Equity. Both sectors will continue to suffer in the current economic crisis and higher financing cost will continue to eat into their earning and punish them.

However, having said this, we feel that the 2008 bottoms , when retested, could be an interesting occasion to reconsider selected opportunities. Both industries have been punished as a whole without much consideration for the few solid players that are going to come out of this crisis incredible strong… the Enterprising Investor will keep on following these sectors and find the right opportunities.

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