Chinese New Year is a time of celebration in many Asian countries. However, it seems that things are not that rosy in some parts of the world. On Friday 8 Feb, CNN reported that people’s confidence in the economy sank even lower amid heightened fears about shrinking job opportunities and the possibility the country is falling into recession.According to the RBC Cash Index, confidence dropped to a mark of 48.5 in early February, from 56.3 last month. The new reading was the worst since the index began in 2002 and surpassed the previous low reached in January.

Stocks ended a rough week on Wall Street in mixed territory Friday, as ongoing credit market woes dragged down the financial sector. The Dow Jones industrial average lost 0.5%, while the broader Standard & Poor’s 500 index fell 0.4%. The Nasdaq composite gained 0.5% after falling into bear market territory earlier this week, defined as a drop of 20% from the recent highs. All three stock gauges ended the week with losses, erasing the big rally from the previous week.

But there’s a silver lining to every cloud. Maybe it’s a good time to pick up some value stocks if your hands are itching. A good example of how much better value stocks are now compared to 2 months ago includes Apple which fell from a high of USD200 (Dec 2007) per share to the current USD125. Even mighty Microsoft was not spared! It came down from a high of USD38 (Nov 2007) to the current USD28 per share.

Alot of wealth building is about doing the things that others do not do. When others are selling, you should be buying and when others are buying, you should be selling. Personally, I feel there’s some way to go before it hit bottom but now is a good time to start researching for value stocks to pick up along the way down. Currently, the SP500 Index is at 2006 levels (see figure below) but is expected to go further down and may even reach 2005 levels. This would be an opportune time to put down some hard earned money and bet on a reversal in the next 2 years or so.

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