Master Rider Blog

Record Breaking!

October 3rd, 2007 NW Teong

Most stock markets such as Hong Kong (Hang Seng Index), Singapore (Straits Times Index), Korea (KOSPI), and of course the hottest markets such as China (Shanghai Stock Exchange Composite Index) and India (SENSEX index) in Asia have continued to sizzle. It seems that every day is a new record!

Having risen substantially since its recent low on 17 Aug, I would think that regional markets are likely to pause for a while to digest the gains made so far. Mind you, it is really a hefty gain since 17 Aug 07. This is the time for the more prudent investors to sit down to think of how to re-balance their portfolio and ride on the wave toward the end of the year. For those who are still keen to rush into the markets, I would urge them to be cautious at this juncture as markets are likely to take a pause. This is so especially if the markets continue to go up in the next couple of days. For those who are fully invested, perhaps it is time to take some money off the table. My personal view is simply based on following few points:- 1) valuation is getting rich with the surge in price since 17 Aug 2007, 2) while sentiment is positive due to lower interest rates, fundamental (such as business conditions and economy forecast) remains almost the same since 17 Aug, 3) technically markets are near its critical level soon (e.g. STI will face tough resistance nearer to 3950 to 4000, it is currently at 3835, i.e. about 3% from there!), 4) last but not least, better be careful as we are in the “jinx” month of October (hahaha! You might call this superstitious but being human beings sometimes we are more fearful of the shadow than the actual devil itself).

Having said that, I am still optimistic that final quarter would still be a quarter for a sweet harvest, this of course subject to how markets being played out in October. You see, we can have certain expectation for the final quarter but we still need to monitor the markets movements, valuation of stocks, events etc to fine tune our expectation along the way. This is the essence of a dynamic investment system. In short, manage your portfolio actively to maximize your returns in every twist and turn of the market whenever possible. Cheers!

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Entry Filed under: Macro, Stocks, Singapore