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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: PaulM who wrote (27990)	2/11/1999 3:08:00 AM
From: Alex	Respond to of 116753

02/10/99: Investment Advice On Surviving Market Mayhem PAUL KANGAS: With me now with some suggestions as to how investors might deal with the current volatility in financial markets, is Kevin Pendley, the Chicago Bureau chief for BridgeNews. And welcome back, Kevin. KEVIN PENDLEY, CHICAGO BUREAU CHIEF, BRIDGENEWS: Thanks, Paul, nice to talk with you. KANGAS: As we know, the stock market has been in somewhat of a meltdown recently, and has a lot of investors unsettled. Can you give us some strategies which might be useful in weathering this storm? PENDLEY: Well, that's a good question, Paul, because until recently, it was easy. You just used bonds as an opposite asset allocation instrument against the stock market. KANGAS: OK. We have a chart of recent bond futures, which shows the price declining, almost like the stock market. PENDLEY: Yes, it's been in a free fall, really, for the last few weeks. So that strong-to-negative correlation to stocks has broken down. It used to be if stocks went down, bonds went up. And it provided a nice perspective on where you'd go with your money. With that out of the way, you have to really consider some other alternatives. KANGAS: And-what would we consider here? PENDLEY: Well, I know it seems strange to look at a market that really has been depressed for a year and a half, but we've heard talk the last week or so from some prominent hedge fund managers that the physical market, or commodities market, might be a good opportunity. KANGAS: Well, we have a chart of the Commodity Research Bureau Index and it looks even worse than the bond and the stock market. PENDLEY: I know. I know. It looks terrible. I think what attracts some of these hedge fund managers is that they see a real risk reward potential. In essence, the CRB's already been pummeled. It can't go down that much more. But if things get hot, it could really fly. Plus, the silver market has had a nice rebound lately and I think some of these hedge fund managers caught that move. KANGAS: I've seen some big moves in some tangible companies with tangible products, like ALCOA (AA), Phelps Dodge (PD) in the copper area. Do you think this is a hint of what's to come? PENDLEY: I think that's a great sign, Paul. If investors want to stay in the traditional stock market, but try to catch a commodity-type move, some of the companies you mentioned could lead the way back around, or at least be a safer alternative than these Internet stocks or financial ones. KANGAS: How about old, depressed gold-is it ever going to make a comeback here? PENDLEY: You know, it shows signs of life. And I know that horse has been kicked a lot. But there's a chance, I think, that gold could be one of the leaders if the commodities markets have a resurgence. KANGAS: OK. I thank you very much for some, shall we say, tangible suggestions. PENDLEY: Thanks, Paul. KANGAS: My guest, Kevin Pendley, the Chicago Bureau chief for BridgeNews. Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c)1998 Community Television Foundation of South Florida, Inc.