Step 2 will be when fear recedes enough for the realization to dawn that developing economies especially those of India, China, Brazil and Russia have still been growing. This realization leads to an earlier recovery in these markets.

Step 3 will be when investors begin to realize that the growing markets continue to consume commodities at a rapid rate. Thus, commodity prices can begin a new uptrend.

Step 4 is the realization occurs to investors that developed economies will once again grow, and corporate profits growth will pick up. Finally, their stock markets also rise.

SUMMARY

The temporary bad news is that we believe most global markets for stocks and commodities will fall for the next few months. The long-term good news for the nimble is that we can repurchase at lower prices in a few months, and be ready for the time when a new market uptrend will begin.

Guild Investment Management, Inc., a registered investment advisor. All material presented herein is believed to be reliable. Investment recommendations and opinions expressed in these reports may change without prior notice.

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