Our new direction will be defensive

Overall confidence in 2018 turned negative for me. I am not looking for a crash but an overall slowdown looks unavoidable. As the current stagnant prolonged will face impact of short to mid slow down.

As for equities, from this point on we will shift to highly defensive with yield. We will still buying as reinvestment.


A period of stagnation on stock and property

Overall stock and property will be see saw in trading during this stagnation period. It is not stagflation as we believe overall market will stay quiet and trading within range.

Overall slowdown is because of impacts from worldwide economy. However also some new policies by the local government will continue to affect short to mid term performance of both markets.

Especially the property market. We believe a switch into rental oriental market is already happening. Some leading industrial property portal like Estate123.com launched Landlord123 seen as activites bias towards capturing the market of rental in this period.

We will continue to stay invested but will focus into undervalued and yield oriented always.

5G network will impact property market

Imagine a designer can transfer large data files in second. Is the office still in need? Or I should say of anything that can transmit over 5G easily will be impacted. Because 4G already reshaped the market in such a huge degree. 5G is 10 times faster.

Banking earnings proven the industry undervalued

Maybank record earnings. RHB record earnings are example of loan is still growing. With the current price traded in the market. Banks are no doubt still under valued. Fair market PEs is always at 13 to 15 times. Therefore, any banks trading below 10 times is definitely a good investable security.

A perfect recovery may be in place for KLCI

Dow recovered from quarter low and now world market also heading towards potential interest cut. If crash is not an option then reducing interest worldwide will start pie another round of bull run. I think that’s very likely.

LGE is the right Finance Minister at this time

Many people may have different views on him. This include myself that he may not done well as a politicians. However, he is the right person for Finance Minister in Malaysia at the right time and right government line up.

Typical market turbulence may not need strong growth but stable balance sheet. So we think RM will do well in 2019.

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