How to Invest, Shop and Save in 2H 2012

How to Invest in 2H2012, given the turbulence ahead – both locally and abroad?

In Personal Money July 2012 issue, it has this inaugural how-to section, and one of the salient points discussed is this answer to this very question.

To be frank, I also don’t know how. There are a whole gamut of factors which is beyond our control. But let us try to shed some light into this, given the very URL of my blog – talking about the How To in Finance and Money Issues affecting us daily.

Domestic events to watch out for that could possibly trigger more market volatility

  • Malaysia 13th general election – affecting foreign investors’ sentiment
  • Dissolution of Parliament pending election
  • Election result, especially regarding the critical two third majority

Global event which would wiggle KLSE

  • Eurozone (Greece) escalating debt crisis
  • China Interest rate cut, first since 2008/2009. This indicates slower economic growth, and being the fastest consumption market anywhere in the world, the collateral impact will be felt.

See how to explain the cause and effect of business cycle

I just read a post from Singapore Stock Investor, and AK quoted these statements from The Business Times (weekend edition) on an interview with Isaac Souede, the chairman and CEO of Permal, one of the world’s largest hedge funds groups.

“If I’m wrong and China has a hard landing, all of Asia won’t grow… Most countries in Asia (except India) are in the glide path of a pro-growth policy… which is very positive for equities. But the harbinger of all that is China”

Moving on to local front…

Let’s us now see some independent research/survey by Malaysian Institute of Economic Research (MIER) on how business is generally doing and how Malaysians spending sentiment for the past quarter (Q2 2012).

business condition index 2012MIER Remarks – STILL POSITIVE, BUT GROWING SLOWER

  • Business Condition Index or BCI falls 5 points to settle lower at 111.5 points
  • Sales still expanding, on the back of strong domestic demand
  • Production easing, inventories piling up
  • Unfavorable outlook for sales and production

This actually correlates with what China is experiencing too, but we have not had interest rate cut yet (if yes, WOOHOO for house owners!)

consumer sentiment index 2012

MIER Remarks – JOBS JAZZ UP OPTIMISM

  • CSI climbs further to 114.9 points
  • Current finances sturdier
  • Financial and job outlook pick up steam
  • Inflationary jitters tone down
  • Selective shopping plans on the cards

Simplfied, this means not much worries on employment.  And my fellow countrymen are proud contributor to the economy by going on a spending splurge in conjunction with the 1Malaysia Mega Sale Carnival (15 June to 2 Sept)

A word of warning though. Make sure you NEVER use credit card to overextend your purchasing power, else you would sink so deep into a financial hell hole that you would never be able to climb up from.

See what I mean here by financial hell hole.

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My fellow Malaysians are one optimistic bunch! Despite the turbulence in global economy, we are still doing okay. Or it is because the ripple effect have not reach us yet?

OK, I digress. Now, how about Investment?

The truth it, even analysts themselves have differing opinions about different sectors. Buy or Hold?

Nobody is certain for sure. Because Mr Market is even more unpredictable than your fiancee or spouse having PMS.

One sector which I am following is Malaysia Real Estate Investing Trust (M-REIT). And this is my summary for you after reading a few analyst reports on this sector outlook for 2H 2012.

REIT sector rating 2h2012

But there is one commonality among them – and that is:

Being Defensive

It means, shun speculative stocks or investment – but choose value investing. One form of value investing is dividend stocks in non-cyclical industry. Such stocks give you consistent dividend payout amidst the stock market uncertainties, although recession is unlikely in 2012 in my last post on Business Condition Index Q1 2012.

REIT Stock is one gem that fits this profile. I wrote about how a no-brainer how-to approach in REIT investing in this article – What To Look For to Invest in REIT? A How To Case Study

And sure, we should take analysts’ report like a grain of salt. But if you read the same How To Invest in 2012 article in Personal Money, Tan Keah Huat, CEO of Apex Investment Services is in favour of REIT in line with its very defensive investment strategy employed for the early part of 2H 2012.

To quote again Singapore Stock Investor’s eloquent remarks on Issac Souede’s interview –

“His conviction is strong and he has his reasons. However, so many things are not within his control. So, a good dose of luck is needed to deliver on his expectations. 

Making money needs more than well reasoned convictions but well reasoned convictions should be part of the money making process.”

Now, please do your family and friends a favor on how to invest, shop and save for the rest of the year – by sharing this at Facebook.

How to invest, shop and save for 2H 2012 <– Or you could Click here to Tweet this

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