Invest in Blue Chips

The US subprime financial crisis that climaxed in the fall of Lehman Brothers has played out for quite a while. Global markets have fallen drastically and experienced wild swings in their performance, rising and falling more than 10% on some trading days. The ride is scary and many people have lost significant percentages of their investment portfolios.

While today's stock prices are at or near basement bargain prices, many people are still loathe to make their purchases for fear of further falls and an expectation of a looming global recession. Memories of the Great Depression linger and fear prevails. Yet, the situation today is nowhere near that of the Great Depression and the success of concerted efforts of governments worldwide is being underestimated by investors.

Technology has enabled investments to be made at the click of a button and orders speed across the global in seconds. Such efficiency has contributed to the more frequent and wilder swings in market fluctuations. Las Vegas Sands' fall from grace dropping from a 52week high of USD$122.96 to a 52 week low of USD$4.32 and subsequent rise is but one illustration of the golden opportunities that were presented. Out of fear, too much money has been taken off the tables by investors and governments have pumped in large amounts to support the financial systems.

Years have passed since the last financial crisis and market valuations have today dropped to that previously encountered. Companies grow and such valuation of the companies are totally irrational.

Investors should look to investing in this current economic turmoil where downside is extremely limited. Blue chips that have been severely penalised are extremely attractive to pick up. ComfortDelgro, SPH, Singtel, OCBC, DBS, Capitaland and KeppelCorp are companies with extremely strong balance sheets and poised to recover stronger than ever out of the current financial crisis. Even if the crisis should be slightly protracted, these extremely well performing companies boast dividend payouts that are more attractive that fixed deposits.