IS THE SINGAPORE STOCKS MARKETS CORRECTIONS COMING? WHAT SHOULD INVESTORS DO NOW…. IMMEDIATELY?
And it could get even bearish as China responds tic for tac to US’ trade tensions whether the latter were actually effected or were just plain rhetorics; thus I am keeping my target for STI to 3,000 and below.
The STI ETF which tracks the STI has slightly recovered but looking at the technical charts, it is now still grappling with the 300-Days-Moving-Average which it has earlier fell under and is still now trying to test above this Moving Average. This is bearish.
On the converse, some analysts are now saying that there is lots of value in the Singapore Stocks Markets right now. I beg to differ. There will be more value once a correction to the Singapore Stocks Markets is effected. When the correction comes, many investors’ portfolios (including mine) will be ugly. Some investors will be very much tempted to sell or in fact succumb to the selling to “cut loss”. Others like myself would have a mix of short-term and long-term positions to weather the Singapore stocks markets, and not fall prey to the whims of Mr Market.
The corrections will not be welcome by the community since it is not good for the economy and the community. But this would be a time when the most patient of the investors would come out in flocks to pick up good stocks at good prices. Thus, if you would like to be one of these investors, make sure you standby some very decent liquidity to go “shopping” at the next stocks markets corrections and become an advocate of Warren Buffet’s “Be Greedy when others are Fearful” saying.
In my humble opinion, now is definitely not the bottom of the STI since the STI is still at a quite high level of 3,200. 3,200 is only low compared to the solid 2017 showing of all global equities. As an example, we are now talking about a DBS stock price of around $26+ as compared to some time ago, when I recalled this stock to be trading at around $11 only. (if you can recall, DBS is one of the major constituents of the Singapore’s STI).
I would think a low level, a potential bottom to be formed only at the STI level of 2,880, corresponding to a 20% correction of a STI’s peak at 3,600 and with the potential of the STI to reach 2,500 and below.
There will be more value to Singapore stocks markets by then and hence for now, I would think investors should not park too much of your “war chest” in the plethora of bonds, fixed deposits or a hybrid of these offering some decent dividends rates. For you may want just to use the war chest to achieve a much solid returns when the stocks markets corrected (which it has not so since year 2008).
As a caveat to this post, I am not suggesting the stocks markets corrections will be here soon. But all the macro factors especially the trade tensions are pointing to a bearish stocks markets conditions ahead and if there are further factors; the confluence of these factors as well as the “self-fulfilling” prophecy that stocks markets “will have to correct soon since it has been a while from year 2008” will send the markets into a tailspin. Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.
