Opportunity to buy on the market’s pull back

The Dow Jones Industrial Average fell 90.52 points on Friday and again on Monday by 178.47 points to 11023.50, totaling a 3.7% drop for the previous few trading days. The sell off was attributed to the news from China that the government plans to curb the runaway economic growth with a possible institution of interest rate hikes. Added to the downside pressure in the market was the European sovereign debt issue with Ireland and its ability to fund their debt without a restructure of their debt.

The worries about China and European debt issue are concerns for the market but they are not new developments. We feel that the market’s pull back will give us an opportunity to invest into the market at a lower price.

Verdant Capital believes that the equity market is the best place to be, moving toward next year, especially with the Fed’s recent announcement of using quantitative buying of treasuries to keep the interest rate low. As stated from our last commentary, we will allocate more towards equities and be more aggressive in our portfolios. We will buy if any meaningful pull back in the equity market occurs. We continue to like investing in stocks in China/emerging markets, oil, and technology.