Slow and steady

Hate to say I told you so, but I did suggest in a column earlier this year that we should expect a correction of the stockmarket in 2007. And the latest dive on Wall Street and on the local stockmarket - thanks to an 8.8% fall in the Chinese stock market - certainly looks like a correction.

Stand corrected
The word 'correction' suggests that buyers of stocks have recently been incorrect in paying such prices, and now a force for correction has run though equity or share markets. I don't subscribe to that view.

No, not a crash
You see, when the Dow Jones gives up more than 500 points in a trading day before finishing down some 400 points, you know this is the start of something significant. However, it does not have to last. If it did, a correction worsens into a crash and personally, I don't think we are about to pull out the 'crash' word just yet.

Good buying
My surveying of analysts, informed investors and other smarty-pants see this as a correction. Therefore, it could well be a good buying opportunity with one-time expensive-looking shares now better value.

Time travelling
On that subject - value - let me make an important clarification. When I think out loud or in print in this column, I always adopt a long-term point of view. That means I don't put myself into the shoes of day traders, though my musings can be of use to these quick-buck merchants.

Trigger happy
For example, there will be some traders waiting to pick the bottom of this correction and will try to buy low and ride up a future market comeback. Working out the timing is their challenge.

For the steady hands
For long-term share players and those running their own super funds, this could be a decent buying opportunity to put some good stocks into their portfolio. It's also a chance to get into some dollar cost averaging.

Spreading the cost
In case you are not up with this term, dollar cost averaging means buying stock at a lower price than you bought it at to lower the overall average price of securing the stock.

Be alert and alarmed
A lot of financial planners nowadays are trying to tip clients close to retirement into adventurous share portfolios, even asking them to borrow money to turbo charge their portfolio's returns.
They advise clients to buy when share prices fall, which can be a bit harrowing for retirees. This is a high-risk strategy when markets have been rising strongly for four years.

Borrowing worries
Mind you, it's the borrowing bit that worries me the most at this time, not the buying of shares for a retiree's portfolio. As we are living longer, retirees have to invest with the idea that they might have to manage their wealth for 20-25 years.
It means that it is wise to become an investment expert or be smart enough to get one on your team.

The old chestnut
An old investment cliche says that it is time in the market and not timing the market that is important. And you should be working off a five to 10 year program to make money.
I subscribe to this, to an extent, but I like to time my entry so I don't buy too expensively. So, for those underweight stocks, it might be wise not to go overboard on stocks right now. Frankly, property looks to be the next investment asset to have a better period, as prices are quite attractive.

Go for the goodies
The point is if you take a longer-term point of view and you buy good assets - shares and property - at the right time and then sit, wait and watch them grow, you should be able to manage your wealth professionally.
The market might make you wrong in the short-term, but in the long-term well-bought good assets will deliver.

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