This posting is for stock investors.
Wow another new high!!! Looks like this market can do no wrong. High liquidity, record earnings announcements, merger and acquisitions. As of now the STI is 2841 and HSI is 19350, see making money is as easy as A-B-C or even easier, you don't even need to know anything except the phone number to your broker to ask him to BUY.
Why am I writing about the stock market? ...Well about 6 months ago, I also wrote about the stock market : Read my June 2006 article here. At that time, no one wanted to buy stocks at all, doomsayers were saying there were all sorts of problems with the economy and analysts seem quite shy to recommend equities as an investment. Somehow my brain was wired quite differently from the experts so I did the horrid thing of buying into the falling market. Since most experts were hesitant and cautious, I guess I must have lived up to my name Lucky, the stock market rallied shortly after that non-stop to its current levels.
Right now somehow things have gone into reverse, stocks have risen, every single analyst says there is more upside and there seem to be NOTHING, I repeat NOTHING that will go wrong. Although my name is Lucky, I think I'll not push my luck any further. I'm calling SELL in this market. When? Right at this very moment. Heck I may be totally wrong, PLEASE crucify me if I'm so I can learn a lesson. But for those who want a more convoluted explanation here it is:
The recent rise in the stock market has discounted the best earnings levels and does not discount the risk of inflation and disruptive events such as terrorism, financial fraud etc. While the markets are nowhere near lofty levels of 2000, there are pockets of gross overvaluation. Put this together with the frenzy of M&A deals driven by liquidity in our economic system, I have doubts (though I can be wrong) that the current levels in the stock market can be sustained. My best judgement tells me today is a day to sell even as the market moves up, sell downs can occur fast and happen quickly.
I can be wrong. Of course I'm not as smart as Ho Ching. The markets may move up tons from here. ...but this is my assessment, you're welcome to flame me if I'm wrong.