31 May 2009

Choosing the Right Investment Tactic

2008 share market around the globe had fallen 30-80%. Lately, market can't wait anymore, and had started to point the opposite direction instead. Given the vast investment opportunities, which are the best options for you to choose from?

First of all, investors must know the first-mover in-case market rebound. First-mover here refer to those companies which benefit when economy recovered. Blue-chips stocks are what you should focusing on because of the following reasons:
  1. High Liquidity, where foreign or institutional investors can buy or sell their shares easily, without controlling too much of the share price.
  2. Good Reputation, like Genting and IOI, are well-known in the market, which always fall into the radar of investors globally.
  3. Industry's Icon, like Sime Darby which is an iconic company of Plantation sector. Should plantation sector revive, you can't deny it.
Secondly, choosing the right sector.
Some will come first, some will come second, and some will come last.
Sometimes it's hard to identify the prefer sector to invest. Choosing the wrong sector could jeopardise your investment return given a certain time-frame.
So, select carefully.

Hints: Which sector will benefit most from a series of measures taken by Central Banks and Government?

11 May 2009

Rules for Investing in the Next Bull Market

Recently, i came across an interesting article titled above.
And, i totally agree with what was written. Here, I would like to high-light to you these "profit-able" rules (if you believe...)

1. Go Global
Most investors prefer to stick to their "home" market. It's a mistake. Are you sure your country will gave you the best return? So, spread your bets across the board.

2. Avoid big moves
You probably won't catch the bottom or peak. Then, what's the rush? Why buy or sell heavily in one shot?

3. Remember the market is just "us"
Shares rose when everyone was buying, fell when they were selling. And when everyone is trying to predict the market, they are chasing themselves through a hall of mirrors.

4. Don't get fooled by the wrong tense
People (even economists) tends to say: "these shares have risen", "these shares are rising", "these shares will rise". Past...Present...Future tenses. Do not get suckered.

5. Pay no attention to TINA
Sooner or later someone will urge you to buy shares, even at very high prices, because There Is No Alternative. Especially at the peak of the market. There are always alternatives -- like holding cash.

6. Be truly diversified
Here means investing across a spread of different asset classes and strategies. Not, "large cap value" and "mid cap blend". Think carefully, it's Asset Classes and Strategies.

7. Treat forecasts with a grain of salt
Economists and analysts always found the reasons and predict the market direction, even if their views are wrong. So, do not take their forecasts the only source of information.

8. Never invest in what you don't understand

9. Ignore what everyone else is doing
It's natural to want to "join the crowd" and avoid being "left behind". When it comes to investing, do what's right for you.

10. Be patient
Do not rush into or out of the market. But, it doesn't mean patient enough to miss all the opportunities (see rule 11).

11. Don't sit on the sidelines completely until it's too late.
If you are afraid to invest, do it early, little, and often.

05 May 2009

Rally in the Bear Market + Swine Flu

Last week, KLCI showed signs of weakness initially. Somehow, "brave" investor storming into the share market to provide buying support. The benchmark index recovered nearly all the earlier losses to post a positive figure.

Fear vs Greed.
Hope vs Denial.

There are two type of investors here:
  1. Thinking of a reversal is already overdue
  2. Believers of a sustainable rally

Anyway, the optimists appearing to have won the match of emotional market place. Daily average volume of 1.5bil shares and RM1.3bil value make Bursa the direct beneficiary of the game.

Nevertheless, in spite of the prevailing market resilience, the underlying sentiment will be very much event-driven, in which the market could swing either way in respect of investors' mood. Let's wait for the results of:

  1. US banks stress tests (revealed on Thursday 7th May)
  2. A H1N1 flu pandemic treat, seriousness of it, spread or under-control?