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All the talk about Recession and now deflation can make anyone nervous. Wall Street Pros are making predictions, and in doing so, creating more chaos. So the question is, what should we expect in 2009? How is it going to affect the average JOE on the
main street? Well, the short answer to that is things DO LOOK PRETTY BAD but this is not the end of the world as we know it. Yes, there will be changes for sure. Wall Street Pros don't have the answers but best guesses and assumptions.

The turn-around will happen only when the average folks on the main street feel that things are going to get better. Unfortunately, the market has not reached the bottom yet, because the bad news keeps coming. So don't be surprised by the volatility. We should have a good estimate of the health of the economy after the Q1 numbers for 2009 are out. It should tell us how bad the economy is and should also give us a pointer for 2009. It should also tell us if the worst is over or there is more to come.

We are expecting a pretty UGLY Q1 of 2009. Pros will be tempted to make predictions which will probably create more volatility and make the main street more nervous about the future, but this should not worry the folks on the main street. Listen! Pros don't have a crystal ball so their prediction is mostly a BEST GUESS. They have made wrong calls. We don't need to be reminded of that. We have seen respected rating agencies fail.

So what should we do and who should we trust? Well, to start with, always look at the bigger picture and the stories behind the numbers, because numbers do not paint the entire picture, so dig deep.

We don't know if the folks on the main street will keep away from Wall Street in 2009, especially after Bernie Madoff debacle. Wall Street of 2009 will definitely be different as the fear of God has been put in most heavy-weight players who once thought they were invincible. We have seen many hedge-funds and banks going BUST and there will be probably more.

So what's the message for an average JOE on the main street?

Well, first and foremost, investing should be based on KEEP IT SIMPLE AND BASIC approach. Invest in what you understand and what makes sense to you and not to an EXECUTIVE on Wall Street. Don't join the rat-race. Ask yourself a simple question - "Can I live with the risk I am taking?" Think long term.

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Sanjeev Kumar is Chief Executive Officer of Delamore & Owl Group of Companies (Website: www.delamoregroup.com), Toronto, Ontario, Canada. He holds dual Master's Degrees - one in Business Administration and another in International Finance. He has been the recipient of the "Southeast Asia Young Achiever's Award" for Year 2002.
Article posted on January 17, 2009.