In intermarket analysis, I tend to take note of all sorts of data as many as possible? Are the following important?
· Have you been noticing the BDI?
· Have you been following the GDP data reporting lately? As of date, 13 countries have reported negative QoQ GDP data! Portugal, Italy, Spain, UK, Taiwan, Indonesia just to name a few.
One of the above may be experiencing a technical recession, which is two quarters of negative growth! Amidst the above, equity markets are still climbing. Of course, i am not surprised.
On a separate matter, what should investors do now? For those who had been
· Watching, should we start buying now?
· Invested, should we move our exposure a notch or two higher OR should we take profit?
The answer to the above is YOU are the best judge.
My passion in posting blogs is to share my knowledge with you. I lay down what i know. Hence you can make your own decisions. For those who may have followed my posts, i believe you have made money again and again. If you are still in the RED, i suggest that you 'fire' your wealth planner.
If you’re not here nor there, i sincerely advise that you seek the advice from a professional wealth planner who may have the knowledge and experience to provide you constant and regular updates such that you are informed to make the right decision.
Happy Investing!
Regular posting are also made in comments! Did you miss my responses to the audience comments? For e.g. click here and follow the comments.
Market is very unstable. QE is happening around the world and that's why equity is rising (borrow cheap and buy shares with dividend yield better than interest). However, too many potential risk areas (Euro, Iran, China hard landing etc) that can easily spark equity pull-back.
ReplyDeleteWhat to do? If you can buy now and sell in time before and just when any crash happen (and collect dividends in between), that will be the best.
Maybe, I will go back to put some eggs in my online broker that has auto trailing stop-loss but its non-CDP share depository poses another risk.
Hi,
DeleteI agree that market is very uncertain. In addition, volatility is high.
VIX, the volatility index rallied to 45+ towards the 4th quarter of 2011. Current is below 20! This means the VIX is calmer than the previous quarter.
For the US, the Fed announced the extension of low interest rates till end 2014. While the interest rates are SO LOW for an extended period of time, what would you do as an investor. Would you allow your savings be eroded by inflation? or would you be 'forced' to invest?
With the above, coupled with low volatility, what would you do as an investor? Have you heard of carry trades?
While markets are volatile, but given the FACT that lows are getting higher and high are breaking new highs, it is evident that 'probably' large fund houses, big investors are already moving in or have moved in.
Some investors are still skeptical. One possible reason is that they do not know how to interpret the facts given all the data.
As per normal, i do not make recommendations but merely report the facts and my thoughts, speculation, etc.
The data and speculation is already laid in front for your decision making. The rest is entirely your wise decision.
It is a fact that many investors have chosen to stay on the sidelines thinking a pullback is imminent.
ReplyDeleteI sold off my equity positions last week but today I entered again after Dow pushed a new high. Greece seem to be doing ok again.
Suddenly, all the worries of recession are almost gone except for Iran and China perhaps.
China has a group of very capable economists and I am confident they will ride the wave well.
As for Iran, I have not much sense of the situation but I can't see them going all out to war, even North Korea isn't that stupid, let alone Iran right?
Hi,
ReplyDeleteInvestors are sideline because they do not know how to interpret financial markets and intermarket analysis. There's why they are still sideline and at a lost what to do now!
Tools like PB ratio, PER, etc are useful when markets are normal. They would be at a mercy in 2008 and 2011!
Audience should enhance their knowledge of GLOBAL financial markets and inter market analysis, etc, strategy planning, discipline, etc
In May 2011, I speculated and (further)warned that equity markets would head south as a result of closure of QE2. Of course, not many listened nor reacted. Did any economists speculate and warned? Anyway, who's Patrick See!
In Q4, i speculated at first that bottoms are made. I made TWO postings saying we're out of the bear market. I hope some listened and acted. Anyway, who's Patrick See?
Whatever the noise, the market is trending higher. The music sounds noisy BUT the trend is a fact. I hope the audience follow what i mean. Hence, you should be able to intepret my reading of equity markets!
Your para (2) and (3). Though they are factual, but have you read anywhere that markets are heading south because of Iran, China? This is investors mindset!
There is much more than what i've just mentioned above. Coupled with the fact that many invest but do NOT follow financial markets, the outcome of their investments would NOT be too favorable.
Leave it to the professionals!