Given the recent ups and downs in the local and regional market, it is quite difficult for the man on the street to know if the worst of the storm is over. Analysts are urging all to buy on weakness. Nay sayers are telling everyone to just wait it out. So who’s right?
I hold the view that it is time to buy. Depending on your investment goals, prices of certain ‘value’ stocks have already hit bottom and are even going up. If you are accumulating for the long run, this dip is certain to bring a smile to your face. Blue chips like SPH & SMRT have already fallen by at least 5% since their last high, giving them an enhanced dividend yield of between 6%-9%. This is certainly higher returns than if you kept the money in the bank! Given that these blue chips retain or even maintain their values, it is definately better than fixed deposit rates. Sure it is risky but so is crossing the road in Shenton way!
So what’s stopping you? Bern…Fern….Bernam…Bernanke, that’s right, Ben Bernanke, the current Federal Reserve Chairperson? Interest rate hike? Look, you have to understand, what goes up must come down, then again, what is down must bounce back up again, that’s economics.
This is what I see, businesses reporting profits amidst warnings that things MAY slow down, but it hasn’t happened yet. Wages are steady, jobs are still being created. Banks are making tonnes of money raising interest rates. So what? Continue working, ask for that raise but use your money to pay off your loan and stop borrowing to finance that trip to Germany for the World Cup. It’s cheaper to subscribe to SCV! Reduce your liabilities! Make your money work harder for you but before that make sure you don’t spend it all first, save it!!
