Young and Invested

Another day, another plunge in the markets! I know that everything seemed so positive yesterday with an amazing upside in the markets but now we have to face the reality. The markets are too random too predict and the global economy is in the worst state it has been in since the depression.

The pessimism is all around us now a days even and even I, the great optimist, am myself writing about being patient and wary of the markets. It is very hard not too, as it is hitting very close to home or even hitting home. You may know someone who has been laid off, who can’t find a job, can’t sell their house, or even got their home repossessed.  You might just be in one of those situations right now and there is nothing to be embarrassed about, as I am a victim of this crisis as well.  In April, I stopped working for a major financial institution in Toronto, Canada and let’s just say we weren’t putting out profits, that’s a hint for you. Been looking for work in the financial field ever since and it is still quiet. But the time has been spent well as I got my Canadian Securities Certification and now one thing keeps me away from becoming licensed that is getting a job.

Apologize for getting personal, as I just wanted to put some reality into this post. Many have been saying that Canada hasn’t been hit by the global turmoil, our banks are in a great state, and we will not be getting hit. On the pessimistic note, our economy is too closely tied to our US neighbors and we will definitely be seeing dramatic downturns.

What can we do about all of this? How can we survive? Well for one take a look at how our habits or your friends habits have been changing. Did you think twice about going out for dinner lately? Even if this crisis hasn’t hit your portfolio or your household, the pessimism might have got you to think twice and stay in for a good old hearty meal instead of spending money eating out. How can we benefit from this observation? We have to buy stocks that provide us with food at home. This leads us to more defensive stocks in the next several months such as Kraft Foods (KFT), Coca Cola (KO), Heinz (HNZ), and Kellogg Company (K) that should be a good buy as we have to shift to defensive stocks with this kind of economy. All of us will be looking for ways to save money and Kraft is a company that will definitely benefit from our changing habits. S&P analysts have recently raised its target price from $34 to $37 and they should know better than me anyways.

More stocks to come. For now, eat your macaroni and cheese!

Last 3 posts by Alex Ikonn

• Chance to See Jeff Rubin - February 1st, 2010
• Personal Experiences and Lessons in 2009 - January 2nd, 2010
• Digital and The Future of Advertising - November 13th, 2009