Investing in Chinese New Year 2019

Finally, the day of joy has come Chinese New Year 2019. We join our family from a different part of cities, we enjoy the delicious meal together. We make new year resolution for all the things we want to achieve this year.

Some of us who still believe in fortune teller or feng shui or horoscope, we look for a piece of good news for this year. We try to find the answers to the questions related to health, wealth, career, relations etc.

The only question a stock investor would be interested in, is; How the stock market will behave this year? How much return will I get? Which company should I invest in this Chinese New Year 2019?

Before finding those answers, in respect of the culture lets know about Chinese New Year.

What and when is Chinese New Year 2019?

Also known as Lunar New Year, Chinese new year is celebrated in between January 21 and February 20. It falls on a different date every year in between above-provided dates. This year Chinese New Year is on 5th February. Every Chinese year is symbolized by twelve zodiac symbol. This Chinese New Year 2019 is a Pig Year which comes after every twelfth year. The pig is also associate with earthly branch (??—dì zh?) hài (?). In Chinese culture, they believe that pigs are the symbol of wealth.

Well, the question is

If it takes away the wealth or provides with the wealth?

Is this pig year also a year of dismal?

The last pig year was in 2007 and we are all aware of the facts and consequences of global financial crises 2007-2008.

Will the history repeat itself this year?

You can’t predict the answers on the basis of history but you can be ready for the market crises if it happens.

You can make a strategy or a plan to deal with the adverse situation in Singapore Stock Market.

As I have told you earlier, this year is a pig year which is related to earth. That means there are chances that earth industries should do well for example; education, environment, fashion, real estate sectors can perform well.

The companies CapitaLand Mall Trust, Jumbo Group Ltd, Yeo Hiap Seng Ltd, Thai Beverage, MetroHodling of SGX might perform well in this pig year 2019.

But the companies related to water, metal industries, communication, and banking can perform weakly.

We can say this year might be weaker than the previous year for the Singapore Stock Exchange. But an opportunistic Singapore investor finds the way to turn the market adversity into his profit.

Considering Market Volatility

Market volatility can act as your friend as well as your enemy if you don’t understand it.

Whenever the market gets weak the volatility of market increases.

  • During the last 10 years as on November 2018, the Strait Time Index gave return about 79% and ranked 20 among 23 indices.
  • From July 2018 to February STI has fallen down by 2.6%.
  • In 1993 the STI was at around 1338 and in as on 6th February 2019 is trading at 3184.

If you are an observant investor you can see the Strait Time Index has almost doubled itself in all these years.

What should a potential investor do?

Whether the market is weaker or stronger, a potential investor does not deviate from his goal, the goal of making the most efficient trade in the time.

In a weak market, it is the right time to buy stock as they will be cheap. But again we are not investing in the price we are investing in the company.

We will need a strategy that can beat the weak market. Remember to plan ahead by

  • Analyzing the companies listed in SGX that have affected least in all the previous financial crisis. Make the list of these companies.
  • Have some capital saved for the situation so that you can use this for a critical investment decision.
  • Take rational decisions when the market crashes. Do not drive with emotions.

As investor giant Warren Buffett says for market failure and investors’ behaviors toward that,

“So smile when you read a headline that says ‘Investors lose as market falls.’ Edit it in your mind to ‘Disinvestors lose as market falls—but investors gain.’ Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other.”

MMF Solutions perceptive

We want to make you aware of things that can happen. We are not trying to make you scared of the market crisis. Whenever the market goes down the price of stock become cheap and you can use this as an opportunity. Singapore Stock Market is still one of the top performing stock exchange in Asia.

So, even if the few experts are expecting a gloomy market ahead, being a savvy Singapore investor  we can be ready with a strong plan. We strictly caution you to use this information solely for the purpose of knowledge and research.

With this, we wish you all a very Happy, Healthy and Flourishing Chinese New Year 2019.

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