Global stock markets took a heavy beating when US lawmakers passed the US$850 billion rescue package.

On that day, the Shanghai index fell to 1,800 points while the Hang Seng Index threatened to break 16,000 only for both to stage a very strong rebound – a V-shaped rebound.

In a surprise move over the weekend on 7 September, US Treasury Secretary Henry Paulson announced to the world that the US government will be taking over the operations of Freddie Mac and Fannie Mae as well as assuming their respective debts.

This is the period where most listed companies announce their results, which underpin the performance and direction of their respective share prices.

The Singapore bourse displayed more weakness, as it has fallen to levels not seen since the Freddie-Fannie crisis.

The volatility can be attributed to oil prices, which hit another new high while the DJIA traded at a two-year low but once oil prices started to fall, the DJIA began its rally.

At long last, we are witnessing some panic-selling in the US stock market taking the Dow Jones Industrial Average (DJIA) to 11,000 points – 3,000 points away from the peak of 14,000 points – at a two-year low.

When the subprime mortgage crisis broke out last year in the US, the Federal Reserve took bold steps in reducing Fed funds rate in order to bolster the economy. The results of the rate cut, however, remain muted amid unresolved problems within the US economy.

If you are a serious investor, then there should be a proper and methodical approach. What is the aim? Are we investing for retirement funds? We should all understand that fundamentally good stocks will give us good returns over a long period of time.

The broad market is generally trading without a fixed direction with the Straits Times Index (STI) gyrating in a tight range. There is no special reason for this phenomenon, as I believe that it is typical of a mid-bear phase for the market to be behaving this way.