It has been about a month since I posted an entry.
The market has taken a turn and shed about 100 points in the past 2 days. Even though the outlook does not seem bright, in my opinion the support shall remain firm at 3000 +/- 50. Despite the coupling with tumbling Asian markets, there is no reason for the market here to fall far below this support considering the stabilising Dollar and rising US interest rates for the moment.
The short term outlook is that the market shall continue to range and the possibility of a late year rally still lingers. In such a time, it can be a wise strategy to go for yield or total return. Capital gain is difficult for the average retail investor who has limited resources to respond to short fluctuations. In a time like this, cheap buys can be picked up for late growth companies and mature companies. These picks offer stability and assurance in such times as well as decent dividends. A cheap buy can mean a decent capital gain on top of dividends.
Another way to reduce uncertainty is to go for index weights or buy into structured index linked products. However, this is only for those who have a longer time horizon in mind.
Think risk and return.
With US Fed rates about 4% and equity risk premium of 7% on average in the Singapore market, a decent return can be expected for now.
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