Hi folks, I'm back from HK!
Tis the Christmas season, and so the retailers are having a great time. If you had managed to heed my advice and bought some UT last week, you should be making some money by now to spend on Christmas presents. As of last week, you would be able to see a positive mood on the stock indices. The momentum of the gains of last week had somewhat slowed down this week, however, it is still a recovery in progress till the end of the month.
However, we would need to take note of the macro-economic conditions and the pull out of investments seen in unit trust. For macro-economic conditions, economic data especially the job data had indicate that the US economy is not too bad. US would probably not go into any recession but might face slower growth. For asian markets, most of asia should be going into 2008 with strong growth but GDP growth might be curbed to prevent inflation from getting out of hand. China had declared a tighter monetary policy to curb inflation and the impact on the stock market would be negative in the short run but in the long run, Chinese stocks are still expected to post strong returns. For Korea, talks had continued on the FTA and things are looking up.
The pull out of investments in mutual funds is somewhat of a concern, as it shows that many investors are cashing out during this period. Using micro-economic terms to explain, this pull-out might drive down demand causing price of stocks to drop which in turn would be reflected on the price of the unit trust. However, it seems that the stock markets are still holding up well even with the cash out.
My advice would be to enter the market now as you had not done so last week as recovery would continue for some time with emphasis on Latin American, China, SEA economies. Even European funds look interesting for those looking at diversification.
