End of Recession?
Posted by
Lemizeraq
Labels:
financial freedom,
financial strategies
The premise behind this article is the fact that all the leading economic indicators, U.S. Long Leading Index (USLLI) and Weekly Leading Index (WLI) has been rising for 4 months after November 2008 and this is the four consecutive month that the two indicators have risen.
While the U.S. Coincident Index is still plunging, the report predicts that with the two indicators moving up strongly and with the added impetus of the huge economic stimulus plan that the Obama administration put into effect, the end of the recession is near.
You can look for the article "End of Recession in Sight".
Another important information to look at is a very useful pdf document at Financial Times.
- Go to "Market Data" find this information box with research data archive
- Choose under category choose "equities", while for report choose "ratios"
- After that click on the date that you are interested in using the calender beside it.
It may sound difficult to do all that, if you are not sure, click on the image where I have highlighted in red where to choose these options. But trust me that it will be very useful to you as an investor.
To illustrate, just around a month back, if you have seen that the P/E ratio for the whole Singapore market was priced at 8.8 times its earnings or in March it was at 5.6, you would have realised that the Singapore market was seriously being undervalued.
What would you have done as an investor? If you had studied a bit of history and know about the cyclical nature of the equities markets and know that the markets generally trade around the 18-24 mark, you would have been overweight in the Singapore market and bought stocks like the banks or SGX.
In fact if you had looked at the chart, you would have looked to invest in a lot of countries. Now, Spain, Russia and UK looks cheap relative to the rest of the world compared with their projected yields.
At one time in 2007, the China market PE ratio was in the stratospheric 40s-50. What did I do then? I sold off my funds invested there. In case you think I am a market seer, I'm not as I didn't sell off my stocks holdings in Singapore.
Now, it is time to get in if you haven't yet. Remember the 2Ds- Dollar Average and Diversify.
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Disclaimer
reliance placed on information provided in the blog.
Shares and financial instruments illustrated in this blog can go down sharply or in certain instruments suffer total loss on the initial investments. Investors are advised to make their own judgment on the information provided and consult their own financial advisors or consultants as to the suitability of the products illustrated to their particular financial needs and objectives before acting on any information contained herein in this blog.
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