Hurting a bit – one week of madness

Just one trading week into 2016 and we see madness in the investment markets. There is so much fear and many were scrambling to exit. This explains why major equity indices were down, from China to US, Japan, Germany, Singapore.

Singapore’s STI dropped 4.5% in just one week. As a consequence, my equity portfolio was down 5.1%, tracking the downtrend.

The STI was already down 18.2% since the start of last year (January 2015). STI is now at 2,751.23 points. My Singapore equity is now off by 23% from my cost of purchase.

10-Year History of STI

Refer to the graph tracking the 10-year history of STI (2006 to 2015).

STI 10 YRs

You may notice that the STI was above 2,685 points for almost all 10 years except for one year mid 2008 to mid 2009. This was due to the Global Financial Crisis (GFC). The peak was in 2007 before it collapsed to 1,500 points in March 2009.

Would we see repeat of March 2009 when the STI was just 1,500 points? Would GFC come to haunt us again?

IMF and the World Bank were not predicting global recession for this year. Singapore is projecting GDP growth of between 1-3% for this year. We can take comfort as this point in time until events overtake the optimism.

I am going to sit tight for now with my seat belt fastened.

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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