I was listening to Dr. Victor Gan’s FB LIVE yesterday. It is an interesting and very informative presentation about the stock market vs the property market. Please feel free to visit and view the FB Live here. He gave many positive points about the stock market even though he said that he is not an expert with the stock market. He runs property investment programmes and is the only real doctor who’s also a property investment expert.
Then, today I read this interesting article about how some young Singaporean retail investors are thinking about their country’s stock market. As all of us know, Singapore’s Circuit Breaker (known as MCO here in Malaysia) starts on 7th April 2020 (Tuesday). Thus, their economy will also be feeling the effects of a slowing economy and this will definitely affect the stock market. Coming back to the retail investors, in brief, they have full confidence with the stock market and is willing to invest a significant amount into the market.
Article in straitstimes.com Article quoted a 31-year old insurance agent, Mr Heng who got advances from three separate credits cards for a total of S$150,000 (RM455,700). With this amount of money, he opened a share financing account at a local bank and pledged the lot as collateral. The bank granted him a leverage of around 3.5 times and this meant he has around S$500,000 (RM1.52 million) which he put into the stock market.
He said, “As Asians, our parents always tell us: ‘Don’t borrow money, repay your mortgage as soon as possible. But money is so cheap.” Singapore Exchange (SGX) data showed that individuals pumped around $2 billion (RM6.08 billion) into equities in March and this was 50% higher than previous month. Mr David Gerald, founder of investor lobby group Securities Investors Association Singapore, said, “investors should be cautious not to over-leverage” in volatile markets because they may face margin calls. Please do read the very comprehensive article in Article in straitstimes.com There was also an update to Mr. Heng’s stock investments too.
In another separate FB LIVE, I learnt from my good friend Ms. Agnes Wong the Managing Director of Syarikat Ong that SPARE cash is king. In other words, just having cash alone is not enough. It has to be spare cash. I think the essence of what she is also saying is that spare cash would also meant that the one is able to absorb the potential losses that comes from the current volatility. I hope everyone is reminded that in a financial crisis, the central banks are more aware of what and where is the issue.
In a pandemic induced crisis, there are a lot more uncertainties and this is why Singapore is launching its stimulus package 3 today. (click to read) This third package is another S$3.6 billion (RM10.95 billion) to soften the blow from the current COVID-19 economic damage. It’s very true that with crisis comes opportunity. The person aiming at the opportunity would have to manage the risks accordingly. Yes, I am personally evaluating stocks to buy only with my little spare cash. Cheers.
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