Bull or Bear – we still Invest – here’s why

Stock market is an eternal battlefield between the Bull and the Bear. As of now, the Bull says – “US and EU economies, as the bellwether of the global economy, are recovering; inflation and interest rates are still low; there are plenty of liquidities.” The Bear says – “Most markets have been on an uptrend for the past 5 years; it is time for a pullback; US is going to raise interest rates; China is facing a credit crisis soon.”

Just like the optimist vs the pessimist scenario- the glass could be perceived as half empty or half full.

bull or bear - half empty or half fullIt is also fair to say that in a bullish market sentiment, all negative news are ignored, while in a bearish sentiment, all positive news are disregarded.

So, it isn’t surprising for the man on the street to be confused with all market-related news day in, day out, yes?

But exactly where is the market heading? Does anyone have a solid answer?

The truth is – there are always opportunities in the stock market – and one must be there, preferably full time, to see it and subsequently take action.

As far as “Bull or Bear for 2014?” is concerned, fund managers who are in the stock investing business full time also don’t have a solid answer. It is humbling for a fund manager like Phillip Capital to admit this, quoting the recent CIO’s memo:

“As our stock market scales new high one after another, there are some investors who are reluctant to participate in this bull market for the fear of pull back. Frankly speaking, we too, do not know when this bull will end nor do we know when the next correction will be and how deep or how long it will go…”

So don’t let any agents or adviser to “Con”-vince you that they are able to make you high returns in a short time (ie – 1 year) or that they have a crystal ball on where the market is going.

There are, however, a few prudent points to take note:

  • Invest based on the fundamentals of companies. Market timing is not anyone’s skills
  • Fundamentals means the management, business prospect , business risks, etc
  • Equity investment is still one of the best form now with low interest rates
  • Share market can be volatile at times, but the volatility is also an opportunity

Below is an excerpt from the presentation made by fund manager Phillip Capital Management (PCM) to my company recently.

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Note 1: If you are an existing PCM client of mine, do expect the full report of this presentation at your inbox already.

Note 2: Else, if you are interested to open an private managed account with PCM via me, fill up this form to be contacted.

This Post Has 2 Comments

  1. Just like the mantra for property investment of “location, location, location”, in stock/bond investments, “costs, costs, costs” is similar one of the most important elements to be considered in constructing a portfolio. Most lay investors focus heavily on performance and returns but what they conveniently ignore or forget is that past performance is no indication of future results. They also often times do not take into consideration the real returns (less costs, sales charge, total expense ratio, tax, if any and inflation) of a particular stock or a portfolio. The cumulative costs to buy into a fund or stock or a portfolio of stocks and bonds over the long term could have serious implications to the overall health of an investment. The magic of compounding returns is a beautiful creature on its own…but just like fire can be a friend or a foe, the compounding costs over the long run (especially those who dollar-cost average) will drag your portfolio like Jaws dragging your leg into the deep blue ocean. Fine print and much research and comparison are needed before taking the plunge. If one could take time researching the cheapest available air fare to the same destination, likewise due diligence is supremely vital in any form of investment. Due diligence, due diligence, due diligence. I rest my case. 🙂

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