The investment bank crisis in the United States is neither a business management nor an investment matter in reality. Major sections of the world economy are stable and growing. There are scores of regional banks and savings & loan operations that remain unaffected by the whole sub-prime drama.
A corporation can perform satisfactorily in the midst of an economic crisis. Another may flounder even in a general upswing. Stock investment has never been a matter of following any herd. Rational analysis and objective review of facts are watchwords.
Risk management makes the difference between anticipation and hindsight in the stock exchange arena. Investment banking as a profession has adequate procedures to prevent bankruptcies. The Basel norms, prepared by professional bankers, are designed for this very purpose. The famous Wall Street names that hog headlines of shame today are the ones that have obstinately refused to follow the Basel norms.
You can use risk management methods to build a resilient stock portfolio. Keep those dividend checks coming in even as the rest of the world weeps. Stay liquid and prepared to meet every adverse event. Financial utopia cannot be reached in a day, but it is never too late to start.
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