I think the market should recovered. Those debt problems in US and sovereign debt problem is not new to the investment world. They are all accumulated problem. Just like in year 1987 when suddenly the Dow drop by 20%, and also like 2008 when the market slowly drop from beginning of the year until it become extremely volatile in the end of 2008. Now is the same, the market is reaching climax, and will recover and drop again and recover, until those problem found solution, or until we can find other hopes that promise to bring bright future, bringing us to the next level of prosperity.
This market correction might continue for a while because of program setting of certain fund that will trigger sell down when market drop by a certain percentage for cut loss purpose. Liquidity is there, world economy is recovering although in a slow pace, I believe we are not heading into 2008 crisis in near future. Money in Treasury will come back to stock market soon.
Between then, market is expected to be extremely volatile.
I reckon that for general public, the best strategy now is to do dollar cost averaging in the broad market like unit trust or ETF.
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