I think Morgan Stanley’s predictions are too bullish. While I expect the next year to continue to rally forward, I don’t think it is as rosy as painted. No one can be completely sure of what events are going to play out next year and the world is increasingly contentious and fragmented with each more obviously looking out for their own interest. I do think that equities will outperform credit and government bonds as for most years and so most likely to come true. Earnings reports have been strong and definitely many expect rate cuts to happen next year as the Fed chair changes and is expected to align with trump’s wish of rapid rate cuts. This will be significant in driving the US stocks rally and AI definitely will be centre stage as the world capitalise on its potential and with the ra
As I am still young, I definitely choose blue chip stocks and high yield REITs over bonds. Blue chip stocks mainly for growth and high yield REITs for the dividends and potentially some capital gain. I prefer CPF for now as the compounding in SRS means that eventually I still have to pay tax at a later time because I would amass a sum larger than the tax free withdrawal amount and with my current salary, the tax savings is not significant yet. With CPF, I can withdraw without worries about paying tax and the interest from the special account can be considered as a good dividend rate, though at the expense of liquidity which is similar to SRS. The main limitation with CPF is that the amount I can top up is lesser than SRS which limits my ability to fully maximise it for tax savings. At
Although there is a drop in the market, I don’t think this is the time to add. Market response has been mainly towards rate cut expectations and have ignored that fundamentally, the labour market remains strong and economic data have not suggested impending recession. Many of the companies have delivered earnings that beat expectations. The pullback has been painful but not big enough for me to add positions. I prefer to stay calm in this time and continue to watch the macroeconomic situation. The current valuation of most stocks are near historical ranges where they are neither too expensive to be considered a bubble but also not cheap enough for me to consider adding positions. I would need to wait for another 5-10% pullback before adding. I believe once the panic settles, there will act
I prefer top down investing as a good company also needs the right economic conditions, policies and macroeconomic factors to survive and perform well. So, I look at macro then sectors, with a focus beyond just the current cycle but also longer term if I wish to invest for a longer horizon such as IT and AI sectors. For such sectors, if the macro are not conducive but I think they will grow in the longer term, I would seize the opportunity to invest in them if the price drop like tech companies during the rate hike years. I generally pick ETFs as it reduces the risk for a busy investor like me who may not want to keep studying the company on a regular basis and reduces the risk for me if I choose to invest for the medium to longer term. I might couple with bottom up investing once I identi
I don’t think google’s rally has peaked for the year as I expect further rate cuts by the Fed which would drive it further up. I wouldn’t add more google now as it has already rallied significantly this year and potential upside would be limited. I wouldn’t buy meta too as I don’t see much potential in its business model to expect a huge rally. I think there is a good chance of S&P500 reaching 7400 by year-end. Many are still expecting further rate cuts that would drive the rally and I think many retail investors would be buying the dip to help drive the rally. Nvda’s forward p/e of 40 remains attractive as it is currently unrivalled. It is clearly in high demand that both China and the US fight for it and seek to impose restrictions on their opponent. It has now been able to affec
I do think this price and volatile is attractive for selling puts because I am being paid to wait till my strike price to buy or add a position. However, the strike price needs to be chosen carefully and the position added will be more significant than just a nibble. I do think there is a good chance of bitcoin rebounding at around $90k but I would prefer a strike price at $80k to be have a greater safety margin. I wouldn’t take profit at $90k as the long term potential price is defin more than it. Neither would I add positions as the safety margin is not there. I would prefer to add at below $80k for a long position. I am also looking at ETH and COIN as alternatives to bitcoin. ETH is currently seen as stable alt coin with long term potential and COIN has always been seen as an altern
The sell-off has been significant and I don’t think it will take much for it to rebound especially if the earnings beat analysts’ expectations. I do expect it to beat expectations given the strong demand. The main wet blanket would be if Nvidia gives a poor forecast because of the geopolitical tensions and rising competition from other chipmakers. Of course, there is always the possibility of profit takers once the Nvidia rise on its earnings report, and this will lead to the dip closer to market closing or after market hours. As long as analyst continue to be upbeat about AI and do not stoke fears of an AI bubble, Nvidia should rise easily. @SR050321 @Success88