I don't get it!

But Barack Obama has won, the world should be rejoicing that the leader of the free world is back in sensible hands... we hope...

Since Obama won the election, the Dow Jones has declined nearly 1000 points (more than 9%) - there's no patriot rally going on here.

A big contributor to this was the announcement by Toyota that it expected operating profit to decline some 56% next year. If it had been BMW or Mercedes or one of the luxury brands, then yeah maybe I could have understood it - but Toyota which services the ordinary 'pleb' market - geez things must be bad...

Ok - if you haven't worked it out, I'm in something of a sarky mood this morning. But I'll live.

The JSE all share index fell more than 3.4% yesterday resuming the downward trend. My personal opinion is that we are going to see the All Share Index trading at or around the 18 000 level by the end of 2008.

The way I see it playing out is that we're going to see the odd big down day, followed by some bottom feeders coming into the market and then after the middle of November, the fund managers are going to say - 'enough! We're going to sit on the sidelines until 2009 starts'. This is probably going to have the affect of a gradual downward drift.

My Strategy
Is it going to create opportunities? I think so - but don't expect to see any returns on it during 2009.

I read a report that SA asset manager Allan Gray was expecting the JSE to move down to the mid 16000 level over the next four years. A couple of other investors I know indicate that this is likely to continue lower than this.

Tough one to call, but logically if you have nice spread of assets, you should be able to generate some income and with any luck position yourself at relatively low entry points, to take advantage of the next upward moves in markets.

As mentioned in my previous post, I've got my grubby little paws on small cap pharma firm Bioscience Brands. I've discussed the prospects for this business in previous posts, so I'm not going to touch on it again.

Next on my shopping list is to add to my Exchange Traded Fund (ETF) and Property (Fixed income) holdings.

I've got some exposure to the Japanese economy through my DBXJP and to balance it out I'm going to switch my attention to the US economy. My logic is very simple and basic here - for all the doom and gloom that America is a dying economy, it is also one of the world's biggest and most sophisticated - Getting some exposure to the hard dollar earnings here is attractive for a South African investor, particularly when the US is out of favour. For this reason, I'm going to pick up a few of the DBXUS, exchange traded fund.

Property and fixed income are also an important component of any balanced portfolio. The distributions that these guys throw off, mean that you can benefit from some capital appreciation as well as the cash flow. My prefered property stock is the Apexhi-B units. I'm a little bit worried about the increasing vacancies in the shopping malls around the country, but not worried enough to stop me buying into quality portfolios such as those managed by Apex-hi and Growthpoint.

I think for many of us ordinary investors who don't have benchmarks to beat, we have to accept that we are buying into downward trends, but we are not trying to pick the bottom of the market - we're trying to build a valuable portfolio, one small brick at a time....