Dear readers,

In recent months, we have seen huge moves of the volatile market in these troubled times. Even commodities such as gold which is considered defensive, have been moving in difference of US$20-50 in many occasions.

The question in the minds of most investors are, how is this crisis going to fare as compared to the previous crash and depression.

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Dear readers,

I haven’t been posting lately as I have been busy reading up on the movements of the global economy. The ups and downs of corporate giants are so exciting that it’s like watch Batman! We’re not just experiencing a stock market crash or anything like that. It’s apparent that the world is going to be hit by a financial crisis and it won’t get better unless an ocean of money is printed to support the market.

In times of crisis mentioned above, where will you put your money? Under your bed? In the bank? Invest in stocks and bonds? Insurance? Commodities?

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Dear readers,

According to the blog post made in mrbiao.com, the writer found that Holland-Bukit Panjang Town Council was listed as one of the majority shareholders with 530,000 shares, currently valued at about $3 million.

This appears as a shock to me because Town Councils are established to manage the common property (void decks, corridors and lifts, etc.) and improve the living enviroment for the state, and investments ought to be left to GICs.

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Dear readers,

Please take note of the following changes, slated to be implemented by January 2008.

1. Minimum bid for securities between S$3 and under S$10 will be reduced to one cent.
2. Minimum bid for securities above S$10 will be cut to two cents.
3. The ‘forced orders key’ for members’ firms will be increased from the current six bids to 10 bids.

The minimum bid size for Exchange Traded Funds and bonds, as well as securities denominated in Hong Kong dollars and Japanese yen, has also been reduced.

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Dear readers,

The US market closed in the red yesterday at a four-month low due to worries on credit and mortgage markets. This was despite of the injection of some $7 billion of temporary reserves. The Dow and Nasdaq have now fallen for five straight sessions while the S&P 500 has slipped for four of the last five sessions.

The Dow has lost over 8 percent, since hitting an all-time high above 14,000 almost a month ago. The S&P 500 has fallen more than 9 percent since hitting its all-time high around the same time. The Nasdaq has fallen 9.6 percent from its 2007 high. For the STI, we have lost 11 percent, which may increase to 13-14 percent.

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Dear readers,

A short note to take for today’s stock market movements, our market are hit today by a drop in the Dow Jones yesterday, followed with Japan’s Nikkei fall in -422.47 points.

The reason why the markets’ slide, is all due to France’s biggest listed bank, BNP Paribas freezing 1.6 billion euros worth of funds citing the U.S. subprime mortgage sector woes.
Click here to read up more on reuters.

Looks like this equities sell off is going to dry up liquidity for a while. Even though the ECB and Fed are trying to inject money into the system, its not going to work in the short term due to weak market momentum.

You may wish to take some profit off the market table to hold on to cash first.

As usual, I strongly discourage contra and short trading. Hence look at the long run, avoid speculative trading and everything should be fine.

[tags]stock, market, dow jones, nikkei, BNP Paribas, subprime mortgage, ECB, Fed, equities[/tags]

Dear readers,

Are you getting toyed around in the stock market? Investing in the stock exchange, we are essentially trading with only one individual, Mr Market.

Mr Market trades stocks with emotions. When he’s in a good mood, he can sell you stocks at half their value. When he’s in a bad mood, he can also sell you stocks at twice or triple their value. And if you are just as emotional as Mr Market, you could make the wrong decision of buying overvalued stocks from Mr Market and selling undervalued stocks back.

Check out the illustration below to see how the emotional investor behaves:

To avoid buying stocks when they are overvalued and select the undervalued ones, one must learn to avoid being the emotional investor and learn to follow logic and statistics. In order to do so, one must learn fundamental and technical analysis.

Fundamental analysis is the research and examination of a corporation’s financial statements and balance sheets to predict the future price movements of their securities. Fundamental analysis helps you to determine whether a share price is undervalued or overvalued on a long term view based on a company’s part financial records and performance.

Technical analysis is about studying charts that display the historic behavior of market data/statistics (price open, high, low and close, volume, open interest, etc.) in order to forecast future performance. Technical analysis allows you to predict the short-term view of a stock based on its trend patterns.

While fundamental and technical analysis are not easy to learn, you can take the first step by borrowing a book on fundamental or technical analysis from the library and try to understand the concepts. Next, find someone who is knowledgeable in fundamental or technical analysis to mentor you. You would find it easier to progress when someone shows you the way.

A good investment forum that you should visit, is SgFunds.com. The members will help you get started on your unemotional investment journey. Success begins by taking the first step.

[tags]emotion, investor, market, stock, fundamental analysis, technical analysis, sgfunds[/tags]

Dear readers,

Dividends and capital gains are two rewards that long term investors enjoy.

Today, I checked the prices of the stocks in my portfolio and found that one of my stocks, Challenger Technologies Limited has jumped to 27 cents on opening. A check on the SGX website revealed that the jump was due to a declaration of 1 cent dividend per ordinary share on 30th July for 1H07, payable to shareholders on 29 August 2007. Challenger Technologies Limited closed with 25.5 cents today, pricing in the declared dividend.

To me, dividends are rewards to shareholders for investing in the business. I have held Challenger’s shares since the last Cum-All entitlement. This means that this will be my second dividend entitlement for the shares purchased and as well as the rights issued shares that I was given previously.

While dividends are great, it is important to focus on the fundamentals of the stocks that you plan to purchase. Only by choosing stocks with good fundamentals, will you enjoy long term capital gains after riding through the waves of volatility in the stock market.

So are you mainly a long-term investor or a short-term investor?

Here are some highlights on Challenger Technologies Limited’s half-year results for 6 months ended 30 June 2007:

• Revenue jumped 56% on successful retail outlet expansion
• Net profit surged 71% fueled by strong retail performance
• IT retail business in Singapore will remain key growth driver
• Business outlook looks positive, supported by strong economy, strong brand equity,       well-established local retail network, and loyal customers

Dear readers,

Today, the STI closed at 3,583.97 points after tumbling down by 67.08 points. Have you realised any of your paper gains in the bull market? Just before the stock market close, I sold off 5 lots of HG Metal to realise a 37% profit on the counter, leaving 500 shares in my CDP account. You must be wondering, why do I have an odd 500 shares. Well, I bought HG Metal when it was giving dividend and rights issue.

Have you bought your gold yet? Regretfully, I have not accumulated my gold to a satisfactory amount yet. Today, we see the 24hr gold chart breaking $670 ground, while most indices in the red.

My gut feeling tells me that we should see the STI correcting further before resuming its uptrend. My suggestion would be to stay by the sidelines and observe the scene. I started investing in gold because I felt that the stock market was too ‘hot’ at that moment with too many overvalued counters. Perhaps now is the time to look at stocks again while gold is rising. In my opinion, never fall in love in your investments. Look at them when the price is low and when nobody is looking at them.

So what’s your investment strategy in this correction?