Market loses more steam in early trading

As I forecasted, the market continues to go downhill in this early Tuesday trading. Traditionally summer are the "slow" times of the year, as many traders go on vacations. Coupled with the credit crunch issues, this market sees no sustainable recovery anytime soon, especially in the Financial sector.



In times like this, investors should begin to look at investments that are "safer" with low P/E ratios and solid earnings. Here's my advise to investors who are risk-averse and uncomfortable with complex vehicles such as ETFs. Look for American companies that has international exposures. The real growth, at least in the near future, will not come from America. You want to leverage solid multinationals that provides growth and value in your portfolio. Take a look at solid American multinationals that can benefit from its international exposure. Additionally, their large cap status needs to be appreciated in a volatile market, hence reducing its downside due to speculative trading.

Here's an industry that I would recommend. Take a look at high-end American luxury goods retailer/manufacture. These companies can benefit from the weak dollar, international exposure (as China is now the 3rd largest economy in the world and its consumers are buying up luxury goods like there's no tomorrow), and is safe enough to sustain anymore market downturn through solid earnings and creative hedging strategies. One name everyone would recognize would be Tiffany & Co. (TIF), it also pays about 1.3% in dividends. TIF is on sale now because investors are worried that a credit crunch would keep consumers wallets tight, however, high-end retailers traditionally are not affected by interest rates. Most of the TIF shoppers are affluent enough, and they will continue to shop for their significant others. A large contrast with shoppers going to Target or Walmart. So pick it up around low $40's.