Wednesday, October 8, 2008

Where to put our money?

One Singapore dollar to 1.02 Aussie dollars. This rate has never been seen for years!

Today I quickly sms my friends and asked them if they would like to go Australia in Dec, in time for their summer farm stay. Of course, the rates were the highlights. After I sold my Aussie dollars at $1.29 last year, Aussie has been coming down especially after the recent 100bps rate cut.

The fall in commodities prices and unwinding of YEN carry trade has brought down major currencies and indices to their multiyear lows.

Indeed, nothing is safe other than gold these days. Putting our money in Singapore dollars deposit will yield nothing more than 1.8% even if you are depositing a million dollars in UOB million dollar deposit promotion.

Of course, the personal banker might sell you something that yields more, but at current market and prevalent fear, no one would dare take it.

Most would rather suffer a real loss of 5% after adjusting for inflation.

Mr. Oei Hong Leong estimated that market would go down even more, as it is the end of the beginning. He recently made headlines buying AIG at rock bottom and selling for a $7 million dollars profit, before donating it.

Fear is clearly prevalent in the market, everybody is anticipating the market to go down further. However, today, I bought 5 lots of STI ETF (CPF) when STI nearly reach 2000 points. Although 90% of the investors are probably selling, I do know that like all crises, this one will eventually be resolved and the bull run will resume.

Human greed is never ending, there will be more market run up and crashes to come.

Do not despair. Rather, find the courage to be greedy now.


Anonymous said...

You are absolutely right, i do have some issues with the STI ETF as some of the components are ridiculously overpriced (even now). However, in principle, a good time to start buying.

Anonymous said...

with declining corp profit outlook in 09, dun u think sti will cont to be weak, why the hurry to invest now? Unless u r expecting mkt to rebound despite deterioating mkt conditions?

Sgbluechip said...

I think it is futile to time the market. Besides, usually the bull rally will begin in the middle of the recession, not after, as the stock market is forward looking.