make money 2009
How to make money in 2009
By Lorna Tan and Michelle Tay
What a roller-coaster ride the year 2008 has been.
Stock markets have tanked, rallied, then tanked again. Home prices are dipping, the economy is shrinking, and wages have hit a plateau.null
And let's not even talk about the people who have lost millions and millions in Lehman Brothers- linked structured products.
While the peaks have been few and far between, the troughs have left people scrambling to find the bottom - and everybody is tightening their (seat)belts and hanging on for dear life.
Yet, despite the projected gloom in 2009, the new year represents a new start for many.
If you still have the funds to invest, should you buy stocks, a car or a house?
What lessons have financial experts learnt that you can also glean wisdom from?
Invest brings you the best investment advice from 10 savvy investors.
By Lorna Tan and Michelle Tay
What a roller-coaster ride the year 2008 has been.
Stock markets have tanked, rallied, then tanked again. Home prices are dipping, the economy is shrinking, and wages have hit a plateau.null
And let's not even talk about the people who have lost millions and millions in Lehman Brothers- linked structured products.
While the peaks have been few and far between, the troughs have left people scrambling to find the bottom - and everybody is tightening their (seat)belts and hanging on for dear life.
Yet, despite the projected gloom in 2009, the new year represents a new start for many.
If you still have the funds to invest, should you buy stocks, a car or a house?
What lessons have financial experts learnt that you can also glean wisdom from?
Invest brings you the best investment advice from 10 savvy investors.
Mr Jim Rogers, Singapore-based American investor, author of A Bull In China: Investing Profitably In The World's Greatest Market, and creator of the Rogers International Commodities Index
What was the best and worst thing that happened to you financially this year?
Best: Being short on Fannie Mae and the United States investment banks. These stocks collapsed, some by 100 per cent, so I made huge percentage gains on them in 2008.
Worst: Being long on anything at all.
How do you see 2009 panning out?
Most economies and financial markets will get worse as the year progresses.
We are in a historic period of forced liquidation which has happened only eight or nine times in the past 100 to 150 years. There is a forced reversal of positions with no regard to the fundamentals. One makes money in times like this by finding things with unimpaired fundamentals because they will become market leaders.
The only thing I know with unimpaired fundamentals are raw materials and commodities. In fact, their fundamentals are enhanced. Reserves and inventories of everything are declining while governments worldwide are printing huge amounts of money, which has always led to higher prices down the road.
So commodities are the best place to be.
Some parts of the Chinese economy will do well too.
What is one piece of financial advice you would give a person looking ahead in 2009?
Learn about real assets, raw materials and commodities as the fundamentals are improving there, while the fundamentals are deteriorating in most other sectors.
Would your answer be different for a) a single, working person; b) a married couple with school-going children; and c) a retiree?
No.
Is it a good time to buy a car or property?
I am not buying either.
One can get great deals on cars now so I guess it is a good time to buy a car, if one really needs one. Otherwise, I would wait. My view is that property will still be declining in much of the world for at least another year or two. There will be some special places in the world where property will be okay, but they will be few.
What was the best and worst thing that happened to you financially this year?
Best: Being short on Fannie Mae and the United States investment banks. These stocks collapsed, some by 100 per cent, so I made huge percentage gains on them in 2008.
Worst: Being long on anything at all.
How do you see 2009 panning out?
Most economies and financial markets will get worse as the year progresses.
We are in a historic period of forced liquidation which has happened only eight or nine times in the past 100 to 150 years. There is a forced reversal of positions with no regard to the fundamentals. One makes money in times like this by finding things with unimpaired fundamentals because they will become market leaders.
The only thing I know with unimpaired fundamentals are raw materials and commodities. In fact, their fundamentals are enhanced. Reserves and inventories of everything are declining while governments worldwide are printing huge amounts of money, which has always led to higher prices down the road.
So commodities are the best place to be.
Some parts of the Chinese economy will do well too.
What is one piece of financial advice you would give a person looking ahead in 2009?
Learn about real assets, raw materials and commodities as the fundamentals are improving there, while the fundamentals are deteriorating in most other sectors.
Would your answer be different for a) a single, working person; b) a married couple with school-going children; and c) a retiree?
No.
Is it a good time to buy a car or property?
I am not buying either.
One can get great deals on cars now so I guess it is a good time to buy a car, if one really needs one. Otherwise, I would wait. My view is that property will still be declining in much of the world for at least another year or two. There will be some special places in the world where property will be okay, but they will be few.
Mr Ben Fok, chief executive of Grandtag Financial Consultancy
What was the best and worst thing that happened to you financially this year?
Best: My equity portfolio was down by only less than 15 per cent. I had lightened the majority of my stock portfolio in September when the Fed was taking over Fannie Mae and Freddie Mac. I sold part of my equity portfolio bit by bit as the bad news was revealed one by one. Now I am very light in equities and heavy in cash. I also did not invest in, or advise my clients to invest in, any structured products.
Worst: I totally forgot about my Supplementary Retirement Scheme (SRS) account. I did nothing to it and it was down by at least 40 per cent.
How do you see 2009 panning out?
It will be an uneventful year for the financial markets. There will be bad news as the world slips deeper into recession and then tries to recover from it. Some people are calling a market bottom but I think, at best, the stock market will be in a tight trading range until there is strong evidence from macroeconomic indicators that growth is beginning to stabilise. But that does not mean ignoring the market at all. On the contrary, I believe it is time to take calculated risks as equities tend to react ahead of an improvement in the economy.
What is one piece of financial advice you would give a person looking ahead in 2009?
Proceed with caution when entering the stock market. While many stocks are heavily sold down and are looking very attractive, the world macroeconomic picture is not that bright.
Therefore, attractive valuations of certain stock markets must be weighed against the risks stemming from a global recession that will trigger a cyclical contraction in corporate earnings.
The world economy will take at least a year to recover from this financial shock and we cannot rule out further corrections in the coming months. Invest with what you can afford to lose and remember the stock market has no human emotions.
To protect yourself from downside risk, look to invest in undervalued stocks or stocks that are selling below net asset value. Look also at sectors with stable earnings.
Would your answer be different for a) a single, working person; b) a married couple with school-going children; and c) a retiree?
a) Now is the best time to stock-pick. Usually, this group of people has fewer liabilities and a longer time horizon to hold on to fundamentally sound stocks. The recommended asset allocation is 100 per cent equities.
b) Invest in the stock market, with some exposure in bonds. Currently, corporate bonds are attractive despite rising default rates. The recommended asset allocation is 60 to 70 per cent in equities and 30 to 40 per cent in bonds.
c) As they need to create an income stream and have a shorter time horizon, investing in bonds is the best asset class and the least volatile. However, a small exposure to stocks is also recommended. I would recommend 20 to 30 per cent equities and 70 to 80 per cent bonds.
Given the financial situation, is it a good time to buy a car or property?
Certificate of entitlement (COE) prices are down substantially...and interest rates are at rock-bottom prices. However, bear in mind that a car is a depreciating asset and the benefits of convenience also come with price tags. So before you buy that car, ask yourself if you really need one.
If you are looking for a home or even an investment property, now is the best time to shop around and you may get it at bargain prices from a fire sale. Again, before you do that, review your financial situation, make sure you can afford the monthly instalments and remember that this is a big ticket item. Buying a car and a property requires a loan which adds to your financial burden.
What was the best and worst thing that happened to you financially this year?
Best: My equity portfolio was down by only less than 15 per cent. I had lightened the majority of my stock portfolio in September when the Fed was taking over Fannie Mae and Freddie Mac. I sold part of my equity portfolio bit by bit as the bad news was revealed one by one. Now I am very light in equities and heavy in cash. I also did not invest in, or advise my clients to invest in, any structured products.
Worst: I totally forgot about my Supplementary Retirement Scheme (SRS) account. I did nothing to it and it was down by at least 40 per cent.
How do you see 2009 panning out?
It will be an uneventful year for the financial markets. There will be bad news as the world slips deeper into recession and then tries to recover from it. Some people are calling a market bottom but I think, at best, the stock market will be in a tight trading range until there is strong evidence from macroeconomic indicators that growth is beginning to stabilise. But that does not mean ignoring the market at all. On the contrary, I believe it is time to take calculated risks as equities tend to react ahead of an improvement in the economy.
What is one piece of financial advice you would give a person looking ahead in 2009?
Proceed with caution when entering the stock market. While many stocks are heavily sold down and are looking very attractive, the world macroeconomic picture is not that bright.
Therefore, attractive valuations of certain stock markets must be weighed against the risks stemming from a global recession that will trigger a cyclical contraction in corporate earnings.
The world economy will take at least a year to recover from this financial shock and we cannot rule out further corrections in the coming months. Invest with what you can afford to lose and remember the stock market has no human emotions.
To protect yourself from downside risk, look to invest in undervalued stocks or stocks that are selling below net asset value. Look also at sectors with stable earnings.
Would your answer be different for a) a single, working person; b) a married couple with school-going children; and c) a retiree?
a) Now is the best time to stock-pick. Usually, this group of people has fewer liabilities and a longer time horizon to hold on to fundamentally sound stocks. The recommended asset allocation is 100 per cent equities.
b) Invest in the stock market, with some exposure in bonds. Currently, corporate bonds are attractive despite rising default rates. The recommended asset allocation is 60 to 70 per cent in equities and 30 to 40 per cent in bonds.
c) As they need to create an income stream and have a shorter time horizon, investing in bonds is the best asset class and the least volatile. However, a small exposure to stocks is also recommended. I would recommend 20 to 30 per cent equities and 70 to 80 per cent bonds.
Given the financial situation, is it a good time to buy a car or property?
Certificate of entitlement (COE) prices are down substantially...and interest rates are at rock-bottom prices. However, bear in mind that a car is a depreciating asset and the benefits of convenience also come with price tags. So before you buy that car, ask yourself if you really need one.
If you are looking for a home or even an investment property, now is the best time to shop around and you may get it at bargain prices from a fire sale. Again, before you do that, review your financial situation, make sure you can afford the monthly instalments and remember that this is a big ticket item. Buying a car and a property requires a loan which adds to your financial burden.
Mr Mohamed Ismail, PropNex chief executive
What was the best and worst thing that happened to you financially this year?
Best: I did not suffer losses due to bonds, stocks and other financial instruments as I did not invest in any of those things.null
Worst: I bought a second family car just before the prices dwindled. Weeks after I made the purchase, the prices dropped by about $10,000.
How do you see 2009 panning out?
It will be a year of recovery from the pits of 2008. It will be a challenging year without the exciting highs of 2007. I predict, cautiously, that there will be very slow growth in all areas of investment.
What is one piece of financial advice you would give a person looking ahead in 2009?
Invest within your means, with a view of holding on to your investment for the mid to long term. Property is still a safe 'brick and mortar' investment, with landed property being one's safest bet. I would advise caution for investments in the higher-range private properties and suggest taking a wait-and-see approach unless there is an opportunity that presents itself at considerably below-value (at least 10 per cent less) prices.
Would your answer be different for a) a single, working person; b) a married couple with school-going children; and c) a retiree?
The advice is the same for younger people and married couples: Exercise prudence. For the retiree, cash is king so liquid assets may be best.
Is it a good time to buy a car or property?
With the cost of owning a vehicle here always escalating, a car is not a good investment option. It never has been, due to its depreciation over a 10-year period.
Property is certainly a good investment now in this buyer's market, with many developers exercising sensitivity to price affordability. And many properties may be back in the market due to the high rate of buyers who are unable to commit to homes bought under the deferred payment scheme.
What was the best and worst thing that happened to you financially this year?
Best: I did not suffer losses due to bonds, stocks and other financial instruments as I did not invest in any of those things.null
Worst: I bought a second family car just before the prices dwindled. Weeks after I made the purchase, the prices dropped by about $10,000.
How do you see 2009 panning out?
It will be a year of recovery from the pits of 2008. It will be a challenging year without the exciting highs of 2007. I predict, cautiously, that there will be very slow growth in all areas of investment.
What is one piece of financial advice you would give a person looking ahead in 2009?
Invest within your means, with a view of holding on to your investment for the mid to long term. Property is still a safe 'brick and mortar' investment, with landed property being one's safest bet. I would advise caution for investments in the higher-range private properties and suggest taking a wait-and-see approach unless there is an opportunity that presents itself at considerably below-value (at least 10 per cent less) prices.
Would your answer be different for a) a single, working person; b) a married couple with school-going children; and c) a retiree?
The advice is the same for younger people and married couples: Exercise prudence. For the retiree, cash is king so liquid assets may be best.
Is it a good time to buy a car or property?
With the cost of owning a vehicle here always escalating, a car is not a good investment option. It never has been, due to its depreciation over a 10-year period.
Property is certainly a good investment now in this buyer's market, with many developers exercising sensitivity to price affordability. And many properties may be back in the market due to the high rate of buyers who are unable to commit to homes bought under the deferred payment scheme.
Mr Gabriel Yap, senior dealing director with DMG & Partners Securities
What was the best and worst thing that happened to you financially this year?
Best: My decision to liquidate practically all my trading portfolio when the market saw two price peaks in October2007 and broke its trend line after the second one - a strong indication that it was time to sell - in December 2007.
Worst: Despite liquidating almost all of my trading portfolio, I had only begun to trim my investment portfolio in August 2008 when the banks were reporting huge losses despite management's assurances of a turnaround.
How do you see 2009 panning out?
Equities are on course for their largest losses since the Great Depression...and 2009 could exhibit the classic post-boom and bust sideways trading pattern in the first half of the year. (That is when) the upside is capped by consistent bad news from the economy, earnings and asset markets, but the downside is protected by already excessive pessimism and historically low valuations.
We will likely see a decline in global credit spreads (which have already happened), bottoming of companies' earnings and a stop in the decline of United States housing prices.
What is one piece of financial advice you would give to a person looking ahead in 2009?
Based on fundamentals, the 60 to 70per cent collapse in global equities since October2007 has brought valuations to 40per cent below replacement values of their underlying assets. Thus, the downside, if any, from the current levels will be minimal.
Look for the market's daily trading volume to rise. At the peak we were trading 9.4billion shares a day but right now we are seeing less than a billion a day. If you see volume moving up to three or four billion, that's a very good indication that some of the smart money is coming back.
Would your answer be different for a) a single, working person b) a married couple with school-going children c) a retiree?
a) You should be looking to increase your risk profile in equities.
b) Same, but less weightage in stocks highly sensitive to economic factors.
c) Invest or trade with only your spare cash. Keep the bulk of your portfolio in the steady income generation class.
Is it a good time to buy a car or property?
Car and certificate of entitlement (COE) prices move in tandem with the economy, so it is not too timely to do so if it is not necessary.
Based on experience, property will be the last asset class to recover this time round, in view of the looming supply.
As with the past great equity bottoms of the Singapore market in 1985, 1998 and 2002, equities will bottom first before the economy, then will come companies' earnings and lastly, the property
What was the best and worst thing that happened to you financially this year?
Best: My decision to liquidate practically all my trading portfolio when the market saw two price peaks in October2007 and broke its trend line after the second one - a strong indication that it was time to sell - in December 2007.
Worst: Despite liquidating almost all of my trading portfolio, I had only begun to trim my investment portfolio in August 2008 when the banks were reporting huge losses despite management's assurances of a turnaround.
How do you see 2009 panning out?
Equities are on course for their largest losses since the Great Depression...and 2009 could exhibit the classic post-boom and bust sideways trading pattern in the first half of the year. (That is when) the upside is capped by consistent bad news from the economy, earnings and asset markets, but the downside is protected by already excessive pessimism and historically low valuations.
We will likely see a decline in global credit spreads (which have already happened), bottoming of companies' earnings and a stop in the decline of United States housing prices.
What is one piece of financial advice you would give to a person looking ahead in 2009?
Based on fundamentals, the 60 to 70per cent collapse in global equities since October2007 has brought valuations to 40per cent below replacement values of their underlying assets. Thus, the downside, if any, from the current levels will be minimal.
Look for the market's daily trading volume to rise. At the peak we were trading 9.4billion shares a day but right now we are seeing less than a billion a day. If you see volume moving up to three or four billion, that's a very good indication that some of the smart money is coming back.
Would your answer be different for a) a single, working person b) a married couple with school-going children c) a retiree?
a) You should be looking to increase your risk profile in equities.
b) Same, but less weightage in stocks highly sensitive to economic factors.
c) Invest or trade with only your spare cash. Keep the bulk of your portfolio in the steady income generation class.
Is it a good time to buy a car or property?
Car and certificate of entitlement (COE) prices move in tandem with the economy, so it is not too timely to do so if it is not necessary.
Based on experience, property will be the last asset class to recover this time round, in view of the looming supply.
As with the past great equity bottoms of the Singapore market in 1985, 1998 and 2002, equities will bottom first before the economy, then will come companies' earnings and lastly, the property
make money onlien by e-bizonline.blogspot.com
makemoney in 2009
ไม่มีความคิดเห็น:
แสดงความคิดเห็น