Does bad news means bad economy?

Does a bad economy equal bad stocks?
No, there will always be sector that will move in different directions than the overall market. Always remember that there is bull in every bear market, all you need to do is to find it.

How do we know when the economy has hit bottom?
There’s no way to tell but the only reliable way to capitalize on trends is to wait for a index to close above its 200-day moving average for more than 3 days. Alternatively, look for economics news from analyst that shouts bear in almost everywhere.

Should we wait for signs to improve before we invest?
Our view is to be patient and wait till the market have stabilized is sliding and reaches a consolidation period, then check the fundamentals to determine if it is undervalues. That's when you should begins generating a list of fundamentally strong stocks and use technical analysis to look for entry, in another words "bargain hunting"

What is in our control?
Emotion, time and entry/exit are in our control, a good investor have total control over such factors. Set a stop loss, have a target period for you investment horizon, use technical analysis for an informed entry/exit points.

Will things ever get better?
Things always get better if you look back into history of the market trend. The market has always, and will always, move along in cycles. Look back to year 1980s when recession hit out in world, market have moved higher since then despite various event triggering its fall e.g Gulf war, dotcom bubble, SARs, and recently credit crunch.

One of the ironies of markets is that the biggest profits often come not when a good situation turns itself into a great situation but rather when a bad situation becomes good.

This is because investors are so naturally predisposed toward optimism. So when "good" becomes "great," some of the optimism premium was already built in, and the upside isn't always as strong (until the blow-off phase arrives).

But when bad morphs into good, or even simply to "less bad," there is room for large (and safe) gains, as renewed excitement creeps in after an extended absence.

In the meantime, live strong and every success in investment.