Tuesday, August 25, 2015

The Bear is Coming

It was Monday morning, I knew today many people will dump their shares in stock market... why? Because last Friday (21 Aug 2015), US Dow drop by more than 500+ points, we have never see this kind of drop for many years.

As expected, on the closing, Bursa KLCI Index drop by 42 points, end at 1532. Some Minister may say, see, not only Malaysia stock market down, the whole world were down. The fact was, Malaysia market already down for almost 2 months, especially the currency, down from RM3.60 to current RM4.25 per USD, already down by more than 18% in just few months. Till now, I never see anyone from Ministry take any action but keep on shouting, "Ringgit is under value, Ringgit is under value!!" what's a "Big Joke" in the century! I hope someone can save Malaysia, especially the currency, anyway, all the retailer can not do anything to change it, let see what we can take advantage of it!

Market down, in fact, is a buying opportunity, especially those Blue Chips with good dividend, they are rarely down unless you see investors dumping it. Many people think that this time is different from 1997 financial crisis, however, the nature is, when the Ringgit currency is down and see no floor to the weakness, investors can not find the light in the end of tuner. Someone may think that weaker ringgit will help to keep domestic exports competitive, but they might forgot all the goods trade in international mostly quote in "USD", unless you can produce your own raw material, if not, what you gain, will paid for your lost. End up, all the price, who is going to pay? Final consumer, of course!

Since nobody from the Goverment taking any action, this things will drag for months. In my opinion, no need to rush into market too early (many stocks will touch 52 weeks low), unless you see the main "problem" solve and the Ringgit starting to recover. The day you notice Ringgit recover, it's the sign of foreign investor stop selling and that is the time, we need to enter the market immediately.

Luckily, I managed to sell all my holding in Amfirst (REIT) last two months and waiting to collect the good stocks when opportunity arise. With the US creating this kind of down trend, the opportunity is on the way! I will use the basic for investing, slowly invest in 5 star company with consistent dividend payout. Let welcome bear market!