Welcoming 2019!

Happy belated new year to everybody! I haven't been posting much recently because I am in Hong Kong now.

Recently Apple made the news by dropping a 10% due to a lower revenue forecast, which led to a -660.02 (2.83%) point drop to 22,686.22 for the Dow Jones on 3 January Thursday. I was also surprised that our local STI did not catch the bearish sentiment and instead ended at 3,059.23 with a +46.35 point (1.54%) increase the following day. However, I still maintain my bearish stance on our STI.

So what's my rationale? Firstly, this year will see a projection of two rate hikes by the Federal Reserve. My belief is that rate hikes do cause a drop in the stock market (by theory) and I am quite bearish in the overall financial markets (check my previous blogpost for a detailed explanation). Other accompanying reasons include the risks arising from detriments of inflation, military conflicts and trade wars.

The chief difficulty I am pretty sure we all share is when exactly to go in. No one knows when the market is perceived to be at a 'bottom'. I mean, no one exactly knows, because we don't know whether something will go up or down (unless insider trading but still not 100% confidence). Personally, I think the best way to handle this is to identify certain stocks you want to hold in the long term and try to go in as low as possible, or even buy more when it drops from our purchase price. This is my current plan and I am glad to hear any improvements or feedback on this.

One observation I would like to state is that our reits have not been dropping and at lower prices, which is to my surprise, because I think reits would be most affected by interest rate hikes since it affects their cost of debt. But well, we will see again for the year.

Recently, MAS announced the increase of the personal limit for the Singapore Savings Bonds to be raised from $100,000 to $200,000 starting from February 1. I will be more inclined to increase my stake in SSB while waiting for a market correction. As it seems now though, everything seems to be going for slight rebounds with STI at 3,158.07 after a 1.12% gain today.

It also seems that I have to wait longer for my SATS call as it rebounded to 4.9 today (short of 4.5 buy call) which in my opinion is a little tad overvalued. I will be talking about other stocks of interest when I am back from Hong Kong this week. Hoping the new year will be well for everybody.

Cheers!