Twas scary last time but the bottom line was that the world economy continued to tick and grow.

Managing investments at the moment is akin to log jumping. Success means minimising losses by getting the timing just right.

The first jump for most wise people (with ordinary means) was to tick the cash box on their superannuation allocation forms. If you missed this jump in December its too late now - you are already in the drink!

If you are still high and dry, you may not be for long. This is because cash may not actually mean cash. Your fund may be exposing you to declining value bonds and toxic cash based derivatives. There may expire in a cloud of magician’s smoke soon so you will have to make another jump with no guarantee of success. But where will you jump and when? What you jump to will depend on what boxes you are allowed to tick and whether or not you have any superannuation fund choice (many like public sector and educational workers don’t). If you can’t get into a super that fund maximises choice (some do allow thousands of options) or set up your own (generally not worth it unless you are like Bill Bonner and have substantial funds to downsize) you will have to tick a box that takes you into some form of market index fund. This is where the luck comes in.

By mid year I would expect that most funds will have shifted their equity exposures to blue chip firms that are considered able to see out a major recession. If significant loss has already have been realised at this point in time the risk of edging (if allowed) or jumping back in may be tolerable. The risk is that the market may continue to go down after you make a partial for full jump back into it. In addition, some equity investments will have direct or indirect exposure to toxic debt.

Then again if you believe Sarah Mill’s comments on the ninemsn site http://money.ninemsn.com.au/article.aspx?id=361437, the bulls may still have their day. I don’t agree with her sentiment for reasons presented at the Daily Reckoning web site.

I read with concern in today’s that the so called mum & dad investors will after losing much of their nest egg in equity losses will now lose more of it on residential property in the country with the least affordable housing (and therefore the most to lose). It happens every time.