Market Review and Trends
2008 stock market in review
By Alen  •  January 7, 2009
[caption id="attachment_1447" align="alignright" width="240" caption="Photo by rednuht"]Photo by rednuht[/caption] Year 2008 is a remarkable year for people around the world. We experienced many significant events – Beijing Olympics, US president election, Poison milk powder, Financial melt down etc. To stock investor, it was really a bad year. Can you imagine at one point STI was close to 4000 points? One year of brutal sold down erased many years of gain. What happened? The storm started way back in 2007 with US subprime problem. Before that, who on earth outside US knows what does subprime means? Subprime itself is only a trigger point to bigger issue awaiting the world. The US is over spending and came to a tipping point where the unwind has to be done. On hindsight, we should have sold all our holdings and keep cash, but again who knows? Subprime is only an element in the complex web of problem. The key problem is over leveraging. US keep issuing bond, China keep buying.This keep US consumer spending, and China factories running. Bubbles all over the place – commodity bubble, hedge fund bubble etc. Many financial instituion bursted and credit is hard to get. World is now in recession. We should treat this as lesson and not to let it happen again. The situation now The worst is not over yet. Majority of the economist forecast further contraction. From what I have read so far, nobody seems to have idea when we would be out of wood. 2009, most propably would remain anonymous while the economy is trying to pick itself up. Expect more job cut and bad headline every now and then. The problem is in this kind of environment, people would refrain from spending. Many people are actually still doing ok. But, because of the headlines, they would cut back on their spending too to prepare for the “worst time”. This would accelerate the recession. My portfolio On hindsight, I should have cut main bulk of my portfolio to preserve the capital. However, as a long term investor, my mindset is really focusing on “long term”. There would be a need for me to re-think this idea and see whether this still applicable in Asia context. Anyway, the damage is done, we can only wait for the next upturn patiently. Purchase of the year Due to work commitment and the bad new headline everyday, I really didn't pay attention to the stock market. I did my small purchase when I thought it hit some sort of bottom. How wrong I am! There waves and waves of further sell down. Anyway, they are for long term – FJ Benjamin and China New Town. Read more...
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By Alen
Alen started investing in Singapore market since 2003. He adopt a fundamental driven, small cap bias investment style and believe using stock as a tool to build long term wealth. Constantly searching for multi-bagger.
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