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The beginning of the end to QE.

Hmmm now all countries all cutting interest rate. Free money again. Isnt it?

 

with these recent new heights again and again remind me of 2008

 

The market has probably already taken all these into account. The effect is already priced in.

 

http://online.wsj.com/article/SB10001424127887324744104578475273101471896.html




Era of free money is starting the beginning of the end?   Bonds, dividens , counters would be directly impacted by just the scent of ending QE.   It would not be surprising for STI to hit 2700 on a 20% correction on profit taking in dividen counters and reits from the stratospheric highs when market starts to discount this information. Many funds could take profits on local dividen counters on earnings disappointment and repatriate profits back to invest in quality USbanks and undervalued stocks selling at discount to BV.

20% correction is nothing sinced many dividen counters now yielding just ~2-3% went up 200%, less than 2yrs back when QE2 started. The most direct hit would be current late buyers to the dividen stocks. Existing funds who had pumped up the stock would still retain a huge amount of profits. Naturally, they would be thinking of how to pump n dump indices to prep for their exits to protect their position while they retreat and let the pxxs hold their bag of severely overvalued dividen bombs.

 

The key risks is: Whats next after this....would china credit and property bubble implode and bring down commodities to their dire ends?   The Aussie, Canadian, NZ dollar would be easiest to wack and the gauge to watch out for. Dippyboy recommends max allocation to cash//sgd/usd to take advantage of market swings unfolding for the remanding year.