Dire Markets

The markets are dire at the moment.

Well, as I write anyhow! As this column stays on the air for a week, statements like that could make me look like a right idiot quickly!

I'm sure most of you are feeling the summer blues as you see some of your shares go south.

I've been chatting to a few brokers and they all say the same thing.

Investors just aren't parting with their cash at the moment

They're sitting on the sidelines - trading volumes are extremely low.

The mid cap and small cap market are suffering simply because there aren't many buyers out there.

Even if you own a company that has great fundamentals, it could still head south for the moment.

At some point this year I suspect that money will come ploughing back into shares and they will bounce fast but for right now we're unlikely to see big rises.

There has been a way to make money though - and that's shorting some of the bigger companies, especially media companies.

Shorts I've placed in Bskyb, Pearson, Close Brothers, 3i and the FTSE have all paid off handsomely. The FTSE is likely to dip down to the 4,200 level this summer in my opinion.

I think every investor should have a couple of spreadbetting accounts open - this is the best way to go short of a share easily. Competition is fierce between the spread betting companies and that's good news for investors.

Spreads have become very tight for most of the firms - so tight that in some cases it's now cheaper to use spreadbetting firms to buy a share (short-term anyway) than using a broker.

Which firm to use?

It's worth checking out a few of them and then picking a couple so you have a choice.

You'll see a few ads for spreadbetting firms popping up on ADVFN so have a click on those and see what they have to offer. Another good way of picking a spreadbetting company is simply by doing a search of the ADVFN bulletin boards!

Tap in the various companies' names into "title keyword" and see what other investors think about their services. You can read all the complaints and praises too!

Probably the best thread to look at is simply entitled "spreadbetting" - use the title keyword search to find this active thread.

It's a great board because investors there discuss the various merits of the companies - it'll give you a good idea of which companies to sign up to.

And these are comments from real people using real accounts; this type of research cannot be beaten. I use Cantor Index mainly at the moment.

My portfolio's doing OK considering the weak state of the market.

Sondex has been my biggest winner this week rising from 200p to over 220p.

Also going well for me are Havelock Europa and Burren Energy.

But the shorts are still king for the moment!