2009 Outlook
Written By: Tiang Chuan on January 7, 2009
2 Comments
2009 has arrived and my first post in this new year will be a collection of the market outlooks and forecasts from various fund managers and distributors.
- Market directions are still fuzzy in 2009. Economy and market expected to recovery in 2010
- Go for long-term investments
- Diversify
- Markets have priced in big drops in earnings and dividends. PE ratios at very attractive levels. Fear has subsided since the Lehman collapse. However, there will be a tug-of-war between deteriorating earning prospects and increasingly attractive valuations
- Dividend play is favored in developed markets
- Emerging and Asian markets should do relatively well
- A possible bubble is forming in Government bonds as the yields go down to historical low amid virtually zero interest rates in the US and Japan. Investment grade corporate bonds is preferred and would give much higher upside. However, an alternative view is that this flight to government bonds is due to fear and not greed, which is how bubbles normally form. Thus, there might not be any bubbles at all
- A fund distributor has called for market bottom and is shifting from Neutral in equities to Overweight in equities. Favored markets are China, Hong Kong, Singapore and Emerging Markets
The fund managers are quoting historical personalities and giving metaphors in their reports. After a horrendous 2008, it maybe time to do some self-reflection…
No related posts.
I certainly do not think stocks will do well in 2009 or even 2010.
Asking people to buy for long term and diversify is a way of saying “if you do not do well in stock investment, do not blame me. Stocks are down 70% but its ok, because its for long term, and you did not diversify enough.”
There are different theories and philosophies on the way to invest. Different folks, different strokes.
Warren Buffett sums it up by saying: “Diversification is a protection against ignorance”.
And in my view, too many people think they are smart and does not respect the market enough.
At the end of the day, how many has really invested successfully?