The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
For the doomsday crowd to be right, however, everything has to go wrong. Ev-er-y-thing!
For instance, coordinated eurozone plans for aid to Greece would have to go completely awry. Simultaneously, Italy would have to fail at every turn to shore up its balance sheet; then, the country would have to be turned away by European policymakers because Europe wouldn't have the capital to "bail out" Italy.> >> Bull or Bear? Vote in Our Poll Of course, China would have to forgo its own well-being by sitting on the sidelines. For that matter, all of the other nations in the world -- Germany, Japan, the U.S, Russia, Brazil, Switzerland, the U.K., Australia -- would have to stand idly by as a "sovereign debt crisis" decisively destroys the global economy. And this sounds likely? Financial markets may or may not panic if Italy drops the ball. Yet the rest of the world's sovereignties, albeit grudgingly, would certainly pick the ball back up off the floor. Indeed, Italy is "too big to fail," which is precisely why it won't. So what can volatility-weary investors do? Have your own personal eurozone plan. Specifically, use stop-limit loss orders on your holdings to reduce the risk of any one asset becoming a hopeless liability. If you're not comfortable with actual stop-limit loss orders, employ key moving averages (trendlines) as part of your unemotional sell discipline. If you still believe you're overexposed after stop orders and trendlines have raised your cash level, draw a simple line in the sand. Perhaps you would choose the October stock market low ( S&P 500 at 1097). If it doesn't hold, neither do you. Although I have a plan for dealing with disaster, I don't believe we're heading back to the October lows. China will declare victory over inflation in the near future, allowing for an easing of fiscal and monetary policy. The European Central Bank (ECB) has no choice but to reduce rates too.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV