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Signs of a Gathering Storm
It has not been a good week by any measure. In today?s economic news, AP reports that the Case-Shiller Index of US Home Prices fell for the 17th month in a row with all regions reflecting a widespread slowdown in housing. The Index, which covers 10 major US cities, fell 2.7% from a year ago, its steepest decline in 16 years going back to 1991, the last Housing Bear. ?No region is immune to the weakening price returns? said Robert Shiller, Chief Economist of MacroMarkets in an interview with AP. In addition, S&P noted that its 20-City Index showed a 2.1% drop in the price of existing single family homes across the US in April, with 14 out of 20 cities showing either flat or lower prices. Elsewhere, the Commerce Department reported Tuesday that sales of new single-family homes dropped for the fourth time in five months, falling by 1.6% last month to a seasonally adjusted annual rate of 915,000 units. The Housing Recession is now well under-way, and for all appearance shows no end in sight.
Elsewhere, Consumer Confidence fell nearly 5 points to 103.90, down from 108.50 according to the Conference Board. At the same time, the Present Situation Index fell to 127.90 in May from 136.10 in April, while the forward looking Expectations Index fell from 90.10 to 87.90 in May. Easily overlooked, most readers probably won?t extract much of a message in today?s Consumer Confidence report. Yet in our view, we note that tucked away in all the rapid-fire headline data is a far more ominous development, a warning of potential recession on the way. In our work, we have always focused on the Ratio of Consumer Expectations to the Present Situation, and over the last few months, even though the Present Situation Index has ?held up? well, forward looking Expectations have been deteriorating and showing no rebound capability. This action in the past has spelled R-E-C-E-S-S-I-O-N.
its sentiment at play... Singapore market is more of a follower... US and Asia market are down, so many ppl panic and cash out or cut lost...
Next mth when reports are out, we should see some bullish results... expect a few to set new 52wk high... so consolidate now if you can...
SPC should be one of them...
i have absolutely no worries and like Vivacious, kilroy & Shplayer view this "correction" as a great opportunity to buy more stock.....
besides I heard that the middle east is hotting up.. even prospect of war -According to News max Israel?s military intelligence chief warned Sunday that Israel is on the brink of a war that could break out as early as this summer. Major General Amos Yadlin told the Israeli Cabinet that several factors were moving the nation toward war.
Looks like many of us here are happy with SPC trending down
This stock is in my list so I am waiting for the great SPC sale again - if it ever come again. :)
The previous one I had before EX-DIV were good - 3.90 and 4.40.
yes... statistic do shows that those who go long will gain more in long run... although statistic does not reflect the future...
But if able to, hold on to it... if you feel that its a good stock...
I'm holding on to mine...
Everyone loves to buy low sell high. Me too.
Tis jus too bad that the nature of the stock market is viewed very much one way only - going LONG. :(
Yes... you get the idea... my friendly ghost.. :)
But the problem is if you buy cheap-cheap today, tomorrow it may be marked down again.
Then you will also 'tui' (frust) again...
casper,
There long and short term view is difference between an investor and a trader. One needs to know his/her investment objectives and the degree of given time that he/she can participate in the market THEN determine if one is a trader or an investor. Here I am not saying that being an investor is a bad choice nor being a trader is a good choice. One determines what one wants to be given the opportunity he/she has. I respect your view.
A trader ever told me this 'Ever heard of a short term trade gone bad and its now viewed as an investment?'
http://www.fibtimer.com/subscribers_historical_reports/041121_fibtimer_commentary.asp
apply the same principle as shopping for consumer goods, u wait for a great discount sale happen...
Casper...
Actually it all depends on how much you pay to buy the business (stock)...
If you buy "high-high", in the 'long run', you will 'tui' (ie. frust) ...
Pinnacle may be talking about correlations between the varies instruments.
Understanding correlation is important as it gives us an edge as to how we can capitalise in the ever changing market. The degree of correlation (viewed in percentage vs time - month, quarter or yearly) varies according to time.
E.g.
When USD raises, GOLD declines (inversely)
When EUR/USD raises, USD/CHF declines (inversely)
When US Interest Rate raises, US Bond Prices declines (invsersely)
When Understanding the fundamental of the correlations for each of the economics components will help us determine what to invest.
hmm... maybe I'm confusing someone out there...
diversifying in different counters same sector, different counters in different sectors all subjected to market volatility... if fed increase the rate this week, we are going to see more blood shed no matter which sector...
There are many investment instruments out there... spread your investment in fix deposits, bonds, balance funds, and stocks... to balance high risk, medium and low risk...
Well said Kilroy.
I agree unreservedly and happily with KiLrOy's view on what he said about risk.
Most people will think and argue the opposite...
and that is...
the longer you hold, the safer you are...
How bizarre!!!....
Pinnacle raised a good point however the word Diversify can be very broad if there is no clarity to it. If I buy Tat Hong and Tiong Woon to diversify and if the construction sector takes a turn (touch wood), I will not be any better with reducing the risk exposed. Each of us needs to be clear with how diversifying will work for yourself.
Buying 5 stocks within the same sector and buying 5 stocks of different sectors (assuming the universe of these two subsets is within Singapore) may be a better idea. There are many facets to how diversifying works and at times may be confused with hedging.
Diversifying will NOT reduced the risk exposed if the market crashes. Good money management will reduced your risk exposed EVEN if the market crashes (touch wood).
All risks should be calculated... not anyhow hamtam...
However, as long as you diversify your investment, and not put all eggs in one basket, the risk will be lowered.
If you spread our investment in a few good counters e.g. SPC, Singtel, SIA, OCBC, SPH, the return in the long run will be positive...
But also, don't bet our last cent into the stock market, because you do not know how long you have to wait for the returns.