A bit of interesting reading…

Condensed from the Business Investment page of “August Man magazine, January 2009”
By Mark Paine

This is not the time to become timid and hide away from he big bad world of investments, but a time to get aggressive and become a winner.

Firstly, we have to dispel the illusion that money invested in houses in Singapore, or kept in the bank are your best options. Yes, you would have lost money had you invested into a fund over the past year but over three years even in funds that have fallen 50 percent in the past year, you would still be up 89 percent on your investment – that’s a return of over 23 percent a year (going by HSBC China Fund figures)

Buying houses is all well and good, but they are not the most liquid asset class and historically, house prices in Singapore have fallen in line with the markets with a delay of about 3 months. At the time of (author’s)writing, high end properties in Singapore have fallen in price in the region of 30-40 per cent(URA data stating Marina Bay apartment prices), and that is an awful lot of money to lose when you compare the stock market which has only fallen by 28 per cent.

I don’t know which funds are going to be hot picks for the next few years – we have seen dot com, pharmaceuticals, Eastern Europe, BRIC (Brazil, Russia, India and China), energy and commodities as the hot sector over the past seven or eight years and who knows what will be the next big sector. However, in my book, a company with a low PE ratio and a good balance sheet has got to be a good investment for the next few years. These companies- whether bought directly or through funds-are on sale at a discount right now.

There is only one sure-fire way to accumulate money and that is to spend less than you earn, invest it, and get a positive return on your investment year after year. Suffice to say, this is not the time to become timid and hide away from he big bad world of investments, but a time to get aggressive and become a winner. As Winston Churchill said, “When you are going through Hell, keep going.”

So don’t keep your cash in the biscuit tin, wise up, do some research and get involved I one of the most dynamic investment markets we have seen in a very long time!

{TO read the above article, get your January copy of the August Man magazine (Malaysian edition) }