A good friend asked me today, ‘Is it still a good time to buy?’ This friend is a very capable lady whom I look up where work is concerned. I told her, there’s no answer to this question because if I say Yes, she would ask me what to buy. If I answer No, she would ask me When. Haha. If only life is that easy or I am so accurate at forecasting, then I would not need to wake up at 7am and arrive home 7pm daily and work five days every week. Anyway, the following is one major reason why people are negative and skeptical. What if the market crashes? Yes, with the Ringgit already past RM4.10 to US$1, it kept going lower every day. Everyone is talking about it, even uncles and aunties in the market. The stock market is so volatile and dangerous today that it seems suicidal to enter the market.
Allow me to just say what I did this morning and this afternoon. This morning, I asked my brother to help me arrange with his real estate agent on viewing some condos in Ipoh. Reason is because I wanted to think about renting it out and still have access to the facilities for my daughter when we are in Ipoh every weekend. Prices remain affordable, around RM250,000 – RM300,000 depending on furnishing and area. In the afternoon, I WhatsApped my broker and asked him to queue for an undervalued counter that I have been buying. I intend to hold until the market recovers. Otherwise, the dividend is considered above the savings rate from banks easily.
Actually, both these actions have no direct co-relation to how low Ringgit goes. This is as long as the fundamental of the economy remains strong. You can read a bit here: Fitch Ratings, Malaysia, 1st July 2015 Even if the Ringgit goes lower, the possibility of renting the condo out for homestay remains almost the same. Believe it or not, if I am a tourist thinking about visiting South East Asia and I look at the 5 Star hotels in KL vs anywhere in the region plus all the nice places to visit and the food varieties, I would still fly into Malaysia.
The savings account would still give me the same interest rate if I do not use some of it to buy the undervalued stock and wait for dividends with potential for capital appreciation when the market gets better. Would the share price goes lower? Would you know? Haha. I quote Warren Buffet, ‘when you buy an undervalued company, the price of the share would soon reflect its business fundamental.’ Of course, I may be wrong but if I am wrong by buying a fundamentally strong company, then at least half of all the companies which are not as strong may have to ‘close shop’ first. If that happens, no matter how much you have in your savings account, I am not sure how long it can last. By then, most probably both you and I are out of job too.
Please understand the big picture by evaluating your own position versus the current situation. Is Malaysia really the weakest country here in South East Asia? What about Asia? What about Europe? What about the world? If based on whatever economic or financial stats and even based on the latest ratings from all the international rating agencies, the answer is No. Oh yeah, since it’s my future, I make my own decisions and I take my own calculated risks. Hoping for the best then. Happy deciding.
written on 18 Aug 2015
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