Is Malaysia’s stock market recovering?
Over the past few weeks, our Malaysia’s stock market has seen a drastic rebound from the 800 – 900 range to nearly 950 (as of Friday, 11th April 2009).
Malaysia's stock market rebounding?
Is this the sign of more good things to come? Is our stock market staging a fierce come back after so many months of below-par performance?
Actually, part of the positive come back is due to the announcement of the cabinet by our new Prime Minister and also the recent Wall Street’s rally. But if you were to ask me (I’m a newbie, to be honest) about the sustainability of this rebound, I’m quite skeptical about it.
In my opinion, it is still too early for any form of market recovery even though market movement is actually 6 months earlier than the actual economy. So if you predict that the economy is going to recover in Dec 2009, the stock market should be showing some signs of recovery in June 2009.
But from the looks of it……an immediate recovery is not likely. After all, there are still plenty of jobless people in our country (and even more in US and Europe). This doesn’t do the economy any favor since people will still be unwilling to spend money. In fact, more people are more conscious about their spending now than they were few months ago. People have finally woke up from their assumption that “economy will be fine very soon”.
Also, the recent mini budget looks more like a slow and long-term plan. The effects will not be immediately visible .
But even if there’s no real sign of positive recovery, I do believe that the worst is over for now. Maybe there will be worse news in the next few months, but most people will be prepared for it.
So let’s just keep our fingers crossed for now.
p/s…….. If you’re looking to invest your money, try to look into properties. Stock market in my opinion, is a little bit expensive after the recent rebound. Do wait for a while and see how it goes. The rebound is too drastic for my liking. But then again, I’m just a newbie when it comes to stock market and I could be wrong.
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Comments
@ Damien
200k, you can actually put it into money market fund (if not wrong). put it in there for maybe 2-3 months and wait for the share to reach the bottom. currently it’s still pretty high IMO and the long-term signs are not very healthy yet. I would wait for a few months more before going in and acquiring blue chips.
so to summarize, here are some options.
- money market fund for maybe 1 – 2 months.
- put some portion of it in bond such as the new merdeka bond.
- wait for a few more months and acquire blue chips
That’s what I will do anyway 
I wouldn’t go into mutual fund because i feel it won’t recover that fast within the next 12 months.
When the situation is too fluid, would you recommend zero risk, guaranteed income instruments like FD? I know the rates are pathetic and can’t even keep up with the inflation rate but would that be better than keeping it in a savings account while waiting for something uncertain to happen?
@ Damien
I never like FD due to its extremely lousy (close to nothing) interest rate. I rather keep my $$ liquid and easily accessible than to lock them down in FD. Unless, you’re talking about the 1 month renewable FD. For me, FD is where I should keep my emergency fund or anything which I don’t need……without expecting any return.
If I want something in return, or if I want to grow the $$, then better put in bond or stock market or even properties.
However, when its between savings account n FD, I would prefer FD. No point keeping the money in savings account. Some people are afraid that if they put their emergency fund in FD…what happens if something bad occurs and they need the money? They’ll lose the interest rates, etc.
My reply — the interest rate is so pathetic, if you give it up before it’s maturity date, it’s just like you have a cup of latte in Starbucks (if we’re talking about 5k).
We’re thinking along the same lines then. I was thinking of a temporary parking lot to retreat some funds amidst confusing market directions (the 200k is just an example. 
). I dunno about property – its not liquid and prices may yet bottom out. What I am trying to do now is stack up FD against precious metals like gold bullion or a savings account in euro or renminbi. Cash is king and we’re talking short term and extremely liquid. Got any ideas there?
@ Damien
Properties are good for companies – tax related issues.
But if for personal, and you want it to be liquid, then it’s certainly not suitable. Furthermore, 200k is not really sufficient to get a good location property nowadays.
I’m not very sure about gold-related stuff or foreign currencies since I’ve never go too deep into those type of investments. 
And yeah, if you really want something liquid, go for 1 month renewable FD or short term money market fund (with 200k, I believe the banks will be interested), or savings account if you don really care about the extremely low FD rate. Anything other than that cannot be considered liquid (not even stock market…not this year anyway).
Hi, previously i was looking at penny sense and knowing from your comments that you have make a loss in PB Mutual and also share market. You are a smart investor since you are monitoring your own portfolio. Previously I am a investor and make loss of 50% in PB Mutual. After that I become an agent for PB Mutual because i want to find out the reasons that I am losing money. I am now able to identify the reasons that i am losing and I find out the traditional approach of investing in unit trust are no longer applicable and my fund are now recovering instead of losing, i would like to share with you more if we have the chance of meeting with you in the coming future. I am looking forward of sharing my investment methods with you, you can drop me email if you are interested to listen from me. By the way, anytime is good time to invest, either bull or bear, there is still a way.
@ Eng Hua
Thanks for dropping by. To be honest with you, I don’t monitor my portfolio in PB Mutual. I only monitor the portfolio in terms of stock investing which holds a majority of my investment.
For PB Mutual, I treat it more like a saving fund. LOL. Wait till I get more time from my end, and perhaps will start studying the portfolio a little deeper. For now, the stock portfolio will keep me occupied most of the time.
Bull or bear, it’s up to how you control and your habit of investing. One thing which I’ve learned from my past experience – don’t rush and be patient.
Since you are only monitering more on your stock portfolio, why don’t you switch your fund out from PB Mutual. I think even if PB Mutual are small portion of your portfolio, you still need to monitor it under the rules of investing.
By the way, if you are doing more on stock, do you do technical analysis and fundamental analysis on the company that you bought? Do you buy future to hedge your portfolio?
On my point of view, PB Mutual is more predictable than individual stock. Let me give you an example, let say today KLSE Composite Index rose for 20 points, does your individual stock rose? Your stock will normally go up, sideway or down rite, but Public Index Fund for sure will rise. Just correct me if i am wrong, since i have study it for quite a well, i get the result that PB mutual fund are move closely to the index.
Its good that you treat PB Mutual by saving. The method you use should be dollar cost averaging. But with this method,do you able to capture the major profit of your fund? Can it reach your objectives? Just spend me some time when you have more time in the future.
@ Eng Hua
I don’t actually manage my PB Mutual portfolio actively since I’m treating it like a savings account.
The reason I’m still putting money in even though I don’t monitor it that much is because i want to diversify my investment.
Anyway, I only buy stocks when I have enough money or when I feel it’s relatively cheap. I don’t do much analysis, be it fundamental or technical. I only do qualitative calculation
Okay here’s a question. If you had Rm200,000 to invest and looking to exit after 1 year, what would you recommend?