Are you surprised that the debt ceiling has been raised further? I am certainly not.
The last quarter of the year has begun, everything is in full swing, an exciting time for people who are just coming back to the markets.
I could have held on to my capital a little longer as the ongoing US government shutdown continued to bring the broader market down and with it many high quality stocks. However i chose to ignore the noise and buy on fundamental strength. Having a vision for the long-term is very important in investing in equities. Build on your portfolio when things are looking down, sit back and relax as people rush into the markets because you have already taken positions.
For example, I have been buying more of Far East Hospitality REITs and CACHE REIT when they were down. My average buy price has come down quite a bit. Fundamentally FarEast is strong but still quite RISKY, technically speaking.
As it is with all recent IPOs, we cannot really judge the fair market value. However we know that there is support at IPO price of $0.93 and more recenly $0.84 (recent bottom). The problem is we do not know how low it can go. What i do know is that Far East is a great organisation and proper management and their property portfolio is strong. If its share price is a true reflection of how hotels and service residences perform during end of year tourism spikes, I am confident that its share price will definitely test resistance levels of $0.96. That is a critical resistance level to cross if the trend is going to reverse. Otherwise, we may be looking at a downward trend without a significant bottom.
Did you ever wonder why OCBC claims to be the worlds strongest bank? I know from the ratings that all 3 local banks are actually top 5 in the world. I have been most impressed by their customer service, their leniency to give me large credit limit as well as their online platform.
Only today i found myself on the eve of Hari Raya, feeling lazy to do any actual work, checking out OCBCs online platform features. I must admit that it is most impressive. If you have an savings/current/creditcard account with them, you must check out their feature which allows you to see how you are dealing with your finances compared to others. Some may say its invasion of privacy and probably be surprised they are being tracked so closely. For me I didnt really mind, it helped to see how I am doing, anyway it is all anonymous.
Quite interesting to see where most peope keep their assets, as for me I use OCBC mostly for the purpose of investments, so that would explain the chart below which shows most of my money being channelled into my investment account in iOCBC.
I was surprised to see relatively young unmarried people having 45% of their money in fixed deposits and 50% in investments. Personally I never bought any investment products (unit trusts) directly from banks and probably do not intend to in the future. Its just personal preference that i believe in picking my own stock portfolio. However this has got me thinking a little, I probably should allocate more money in fixed deposits, but at interest rates touching the floor, i do not see much incentive.
Next is debt. This chart is accurate, i never accumulate debt, always pay your bills in full every month. Quite surprisingly average debt for "people like me" is $3129 (credit card + Easycredit). If you are reading this and fall into this category, Please heed my advice, do not use Easy Credit if you dont intend to pay it off in a weeks time. Its just going to suck you dry.
Lastly spending habits. This is accurate for me, I never go shopping. haha! Only spend on groceries and travel to get the points, most of my money will go towards investments. Wondering what "other financial services & charges" refer to?? Me too, i am guess these are the late payment fees which people get slammed by borrowing with EasyCredit.
All in all, I now understand why OCBC bank is one of the worlds leading bank. Their online features rival the best and it is very user friendly. Alot of lessons to be learned from this very interesting online feature.
Disclaimer: I am in no way advertising for OCBC, or saying they are wrong in any way. I just found their features quite useful and decided to share with fellow readers.
As I am writing this, OCBC Bk is trading at 10.44 today. almost reaching its 52 week high of $11.40, overvalued and of course not really the time to get into banks. Wait for the next big crash, I will be keeping an eye on OCBC. Since 2002, a lot has changed of course, OCBC is not the same as it used to be back in 2002 - 2005. Next upcoming crash, we can definitely see up to 50% retracement. Just be patient.
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If you are thinking in the same line as me for past month, you should be appalled by the greatest drama or stage play that is unfolding in the US. Its amazing how fear and uncertainty can be spread through our media. I have purposely stayed away from the markets for a month because there has been nothing as tempting or worth taking the risk.
We watch the news, read the papers everyday for our amusement but you should know deep down what really is going to happen. For the benefit of those who are still confused, let me just anticipate the possible outcome or rather the most likely scenario; US is not going to default, everyone is going to make a fuss about it but they will make the US pay for their debt. Debt ceiling may or may not be raised further, it does not make a difference. Once the fiscal "drama" is over, everything will be back to normal and we will see the next seasonal bull run for the rest of the year. Be prepared to take profits by the end of it.
Meanwhile in Singapore, MAS forecasts core inflation to be hovering in the 2-3% region for 2014. This is highly likely for 1st quarter of 2014 but it might be 4-5% for the rest of 2014. (that is just my opinion) So stocks with good dividends are still a safe bet. UNTIL interest rates go up late 2014.
