I mentioned in my post in early 2014 that I expect a steep correction of > 10% for developed markets (US and EU), and in the second half of 2014, Asia ex Japan / Emerging Markets could recover. Below is the hyperlink.
http://musingsonwallstreet.blogspot.sg/2014/01/thisis-something-that-i-do-for-my-own.html
I also mentioned on Feb 2014 that the mining sector could have bottomed. I bought the First State Global Resource fund and it has since risen by 8.25%.
http://musingsonwallstreet.blogspot.sg/2014/02/why-i-believe-mining-sector-has-finally.html
I've also mentioned that European equities will be in a bull run. I bought Aberdeen European Opportunities in around Aug 2013 and it has since risen by over 10%.
http://musingsonwallstreet.blogspot.sg/2013/08/european-stocks-in-bull-asian-asean.html
Overall, I avoided Asia ex Japan or Emerging Market equities because I believe the US tapering will cause a liquidity crunch, causing short term rates to rise. In some countries, like Russia, Indonesia and India, their yield curves could invert.
Be Careful As You Approach Middle of 2014
There is no need to panic sell everything in preparation for May. Most stock markets are still in the NEUTRAL territory.
Markets to BUY:
1. For the first time, stocks in the Hang Seng China Enterprise look ripe for the picking. They are cheap again ironically as the Chinese economy is slowing down. The yield curve is still flat, credit markets are deteriorating. But the Chinese economy should not implode as the government is wealthy enough to prevent a systemic disaster.
2. Cyclicals like mining, technology and US banks are still a BUY. Most consumer durables, utilities, pharmaceuticals etc are already expensive so it is time for cyclicals to outperform.
3. Dollar cost into European banks as ECB is considering QE. The recovery of real estate should reduce NPLs and increase book values of banks.
Markets to SELL:
Most Emerging Markets are still a SELL. Thailand, Indonesia, Philippines and global real estate are on shaky ground. Global real estate is dragged down by Asian real estate developers that are facing bubbly conditions.
If you are well into profitable positions in Global, US, European stocks, do consider selling half and keeping cash.
http://musingsonwallstreet.blogspot.sg/2014/01/thisis-something-that-i-do-for-my-own.html
I also mentioned on Feb 2014 that the mining sector could have bottomed. I bought the First State Global Resource fund and it has since risen by 8.25%.
http://musingsonwallstreet.blogspot.sg/2014/02/why-i-believe-mining-sector-has-finally.html
I've also mentioned that European equities will be in a bull run. I bought Aberdeen European Opportunities in around Aug 2013 and it has since risen by over 10%.
http://musingsonwallstreet.blogspot.sg/2013/08/european-stocks-in-bull-asian-asean.html
Overall, I avoided Asia ex Japan or Emerging Market equities because I believe the US tapering will cause a liquidity crunch, causing short term rates to rise. In some countries, like Russia, Indonesia and India, their yield curves could invert.
Be Careful As You Approach Middle of 2014
There is no need to panic sell everything in preparation for May. Most stock markets are still in the NEUTRAL territory.
Markets to BUY:
1. For the first time, stocks in the Hang Seng China Enterprise look ripe for the picking. They are cheap again ironically as the Chinese economy is slowing down. The yield curve is still flat, credit markets are deteriorating. But the Chinese economy should not implode as the government is wealthy enough to prevent a systemic disaster.
2. Cyclicals like mining, technology and US banks are still a BUY. Most consumer durables, utilities, pharmaceuticals etc are already expensive so it is time for cyclicals to outperform.
3. Dollar cost into European banks as ECB is considering QE. The recovery of real estate should reduce NPLs and increase book values of banks.
Markets to SELL:
Most Emerging Markets are still a SELL. Thailand, Indonesia, Philippines and global real estate are on shaky ground. Global real estate is dragged down by Asian real estate developers that are facing bubbly conditions.
If you are well into profitable positions in Global, US, European stocks, do consider selling half and keeping cash.
