Let see what's happen in US recently, after the long debate, finally the US government agreed to raise the debt ceiling . What's debt ceiling? It's a self imposed limit on Treasury's ability to borrow. Never mind! Who cares, history always repeat itself. Since 1945, the ceiling has been raised 87 times, it's almost no impact to the market after few months.
Parkinson's law states, “Expenses always rises in direction proportion to the income” In general, as income goes up, expenses almost will follow go up too. This is happening every where, almost every countries' government like to print more money... it's better to keep goods price going up, all properties and asset goes up, so everybody feel more happy.
In theory, share price will going up too... in fact, US market already in the up trend for more than 2 years and 5 months now. Normally, the up trend will reverse after 2.5 to 3 years. Investor reposition their holdings, shares change hand from week investor to strong investor (long term investor). After some time, market will go up again. (because history always repeat itself)
What's the meaning of reposition ? Example, Susan bought a house for $300k few years ago. Now the market price is $600k, Susan decide to build a passive income machine. Hence, she sell the house and take the money to buy REIT and some blue chip stock which gave dividend yield of about 8% and capital gain in long term. Another example is sell A stock and buy B stock. (be careful with this approach, as some investors sell good stock and buy the bad stocks)
Many would like to know if now it's good time to buy stock. My opinion is, yes, as “hot money” printed will flow to Asia (since US and Europe both having fear factor), however, do not predict the market direction. Strong investors prepare to hold for long terms, hence buying good stock is the main condition to success in investment, especially blue chip stock if discount by 10% or more.
Last, someone ask me if any market tips... I say no... but MBSB ($1.64) and GENM ($3.66) worth to take a look if the price drop, it's in my buying list. Please note this is my personal view, not a recommendation to buy. Last time when I recommend a stock, someone sent me a mail, state that he's going to invest $100K and want me to sign agreement with him that I will pay him back $100k if his investment fall in value. Please, even Warren Buffet did a mistake to pay high for certain stock, the money is yours, you have full responsibility to decide if want to invest or not.
Strong investors always keep building net worth in mind. Building passive income flow and buying good asset or stocks at a discount price is a priority. The goal is made the money work hard, so one day you can choose no need to work or work because you choose it, not because of necessity.
.
No comments:
Post a Comment