Copper, Stock Thoughts: PSEi

Copper

What is the logic of copper going up after the “fiscal cliff” fear was over?

It means that the US economy will avoid going into recession. Good economy means sustained construction of infrastructures. Understand that copper price is positively correlated to construction. More construction means more demand for copper thus translates to higher prices.

http://www.lme.com/copper_industryusage.asp

PSEi

My wild guess is PSEi will go down when debt ceiling issue will surface 2 months from now:

http://www.bloomberg.com/news/2013-01-03/ceos-give-u-s-politicians-incomplete-grade-on-fiscal-cliff-work.html

My opinion only.

How to insulate your portfolio if you are fearful about the global economy?

My opinion is buying stocks whose earnings are unaffected regardless of the status of economy. A good example would be companies that offer essential products or are in a bilateral contract with a strong company to sell 100% of their product.

Way back 2008, during the credit crunch, what do you think is the best company to invest in? My answer: Companies that can expand even without the aid of financing. 🙂

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