Value Investing In Singapore Can Be Anytime
When to do value investing in Singapore and/or overseas countries? This is a common question which I have heard many people are asking now and then. If you have gone through value investing education or the stock investing basics, you know value investing is not exactly about buy low and sell high. Hence, when to do value investing in Singapore and overseas stock market is anytime. The question here is are you able to find out undervalued stocks in Singapore stock market and overseas stocks. Do you know how to identify these undervalued stocks in Singapore?
The answer is there are always undervalued stocks for you to invest but the choices can be limited by how many of such undervalued stocks are there in the current market conditions or only certain industries are affected by some market news or events.
Do Value Investing in 2018?
Not difficult to see that the current market is flat and lack of momentum to break its previous peak. Refer to the below the STI chart for the period 2001 to 2018 for an overview of STI history. You can notice that whenever some major events or disruptions happen to cause market panic reactions, STI will always dips very fast. Value investing is not about timing the market but based on historical reflections, when the market becomes irrational or dips due to certain fears, even the best defensive stocks with solid financial performance may also dip together.
Current STI Performance
Current Dows Jones Industrial Average
Hang Seng Index
From the above three major indices, they have a common point. All of them dipped from the recent peaks. What will be the next possible factors which will cause market fears and drags down those value stocks with high financial performance? I can only think of two major event outcome in 2018 to determine when to do value investing in a more subtle way. Margin of safety can be higher when the stock prices of good value stocks are depressed by the market.
Possibilities of Global Trade War
US President Donald Trump has started off a full-blown trade war by singling out of China for retaliation for intellectual property theft. signed a presidential memorandum on 22 March 2018 that he could impose tariffs on up to $60 billion of imports from China. The proposed target list of up to 1,300 products will only be effective after the consultation. This will potentially ignite a global trade war starting between the two major powers. If this is out of control, the global stock market will go into turmoil.
In response to this tariff call by Donald Trump, China said it would hit $3 billion of U.S. wine, fruit, steel pipe and other exports with tariffs. The bigger worry for the U.S. is that China, the U.S.’s biggest creditor, will scale back purchases of Treasuries in retaliation. China’s ambassador to the U.S. doesn’t rule out the option.
De-Nuclearisation of North Korea
After a few months of speech wars between the leaders, Donald Trump and Kim Jong-in, there is a potential breakthrough for a political resolve. North Korean leader Kim Jong-un has pledged to meet with US President Donald Trump by May this year. Apparently, Kim has promised to halt further nuclear and missile tests. And, Donald Trump tweeted on 11 March 2018 commented that he believe Kim will honor to the comments. Both leaders may probably meet in Sweden for the first time. If this meeting does not fall apart, it will be a great news to the whole world. Or otherwise, the market may likely to be erratic again.
When To Do Value Investing?
I like the two Chinese words, pronouns as Wei Ji. We look out for opportunities whenever there is a crisis. When to do value investing in Singapore? My gut feel will be probably in the 2nd half of 2018 or in 2019. The recent uncertainty in the global economy and political arena is a real fact that we cannot simply ignore.
We should not to jump into the stock market now in response to a slight dip last week. This does not mean that we do nothing about it. As a value investor, we should always have our shopping list ready. We strike and win big when the opportunities arise. If you have not start your value investing journey, it is timely to get yourself educated now. It’s still not too late to prepare your shopping list of undervalued stocks. Sign up our value investing seminar today.