Stock markets have been riding on a wave of optimism in the new year, as investors bet that U.S. President-elect Barack Obama's economic stimulus plan would spur a recovery in the world's largest economy. The improved sentiment has seen markets such as Japan's Nikkei 225 Average climb for six trading days in a row.
Kirby Daley, senor strategist at the Newedge Group, cautions against thinking that everything will be fine now that the Obama administration is about to wave the magic stimulus wand. He also warns investors not to rush into equities on the belief that the markets have hit rock bottom.
"Investors need to protect themselves by not getting caught up in buying stocks at levels that seem like they’re very low historically," Daley said on CNBC Asia's "Protect Your Wealth". "When you compare the price of stocks today to 2006 and 2007, we might be down 50 percent, in some stocks -- 30 to 50 to 60 percent -- but that doesn’t mean that we can't go down another 20,30,40 percent from here."