As the financial crisis dominates the headline, my friends have been asking for my opinion on stock investment. One of my colleagues asked me the same question two weeks ago. She told me that her ex-colleague encouraged her to “anyhow whack” since “stocks are really cheap now". This was my reply to her:
“How do you define cheap or low?”
I told her that if she buys, her savings would be gone. That was my opinion. In fact, that was my opinion since the start of this year. Checking through my blog you’ll find plenty of it. I don’t have to brag about it.
I was servicing my in-camp training lately. A few ex-colleagues in the forces are also interested in making money. I told them to wait for that opportunity; to wait for my call. Frankly speaking, I have totally lost track of the stock market. In fact, I hardly log into my trading account to check my portfolio. I’m sure I’m sitting on huge losses at this time but my life hasn’t change a bit. The main reason is because I never gamble, and that’s my first principal in investment. I have stop reading financial news, browsing SGX website. So during my in-camp training, I brought Business Times to read and truth be told, all penny stock and mid-cap stock plunged severely from its peak in end 2007.
Following the news on the collapse of Lehman Brothers and takeover of Merrill Lynch, global stock took another plunge. This just to prove my view early this year that US financial crisis has not ended yet. And until US solved their financial crisis, stock market will continue to be highly volatile. In addition, I still strongly believe that we have already crossed the peak of the business cycle somewhere end of last year. We are on the downturn now. There will still be fluctuation and many more “bear traps”, but in the longer term, it’s still going down. Therefore, no matter what you do, if you try to invest now, you’ll have to kiss your money away. Unless you speculate, which I will never encourage, you will never make it. What we need now is to wait for all dust to settle, whether there is going to be a recession or not, and then re-assess the economic movement.
In sum, do not follow amateur’s motherhood statement like “stock price is low”. Keep your money in the bank at this point, although bank will give you peanut rate. What goes up must come down. By the same token, what comes down must go up. The only challenge is – when is the right time. And that is a million dollar question.
“How do you define cheap or low?”
I told her that if she buys, her savings would be gone. That was my opinion. In fact, that was my opinion since the start of this year. Checking through my blog you’ll find plenty of it. I don’t have to brag about it.
I was servicing my in-camp training lately. A few ex-colleagues in the forces are also interested in making money. I told them to wait for that opportunity; to wait for my call. Frankly speaking, I have totally lost track of the stock market. In fact, I hardly log into my trading account to check my portfolio. I’m sure I’m sitting on huge losses at this time but my life hasn’t change a bit. The main reason is because I never gamble, and that’s my first principal in investment. I have stop reading financial news, browsing SGX website. So during my in-camp training, I brought Business Times to read and truth be told, all penny stock and mid-cap stock plunged severely from its peak in end 2007.
Following the news on the collapse of Lehman Brothers and takeover of Merrill Lynch, global stock took another plunge. This just to prove my view early this year that US financial crisis has not ended yet. And until US solved their financial crisis, stock market will continue to be highly volatile. In addition, I still strongly believe that we have already crossed the peak of the business cycle somewhere end of last year. We are on the downturn now. There will still be fluctuation and many more “bear traps”, but in the longer term, it’s still going down. Therefore, no matter what you do, if you try to invest now, you’ll have to kiss your money away. Unless you speculate, which I will never encourage, you will never make it. What we need now is to wait for all dust to settle, whether there is going to be a recession or not, and then re-assess the economic movement.
In sum, do not follow amateur’s motherhood statement like “stock price is low”. Keep your money in the bank at this point, although bank will give you peanut rate. What goes up must come down. By the same token, what comes down must go up. The only challenge is – when is the right time. And that is a million dollar question.
