Weekly Investor Diary, Week #1 Dec 2021
Everything In The Financial Market Drop like a Coconut š“š„„ from Dow Joes to Nasdaq, then to $VGK, to $BTC and $ETH. But there is one Market worth Looking at...
We have one month left before we say goodbye to 2021. Christmas is precisely in 20 days. Are you prepared for what is coming in the year 2022? career, personal finance, families? How many goals have you completed in any of your yearly goals?
I changed my newsletter title this week. I want to make this personalized, giving out my thought process on the financial market and hopefully giving my reader some valuable insight on opportunities.
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Letās get started with our first agenda.Ā
The latest Covid-19 virusĀ Omicron, First identified inĀ South Africa, suggests spreads faster than earlier mutations, including Delta.
SingaporeĀ tightened its entry procedures, butĀ Malaysia, one of the worldās busiest crossings, was reopened to vaccinated travelers.
Meanwhile, The governments ofĀ IsraelĀ andĀ JapanĀ stopped foreigners from crossing their borders.
You canāt blame the globalĀ stock market sell-offĀ that happened recently. ItsĀ FEARĀ of the Omicron + Inflation rate can lead to a potential interest rate hike by the central bank.
Dow JonesĀ &Ā Nasdaq bothĀ fell -1.26% & -4.05% respectably.
The FEAR also spread to Euro.Ā Euro zoneāsĀ average annual rate of inflation āļø 4.9% in November, theĀ highest it has been since more than 20 years ago.Ā This adds more pressure on theĀ European Central BankĀ to start winding down its stimulus program - probably rate hike?
Technical: $VGK in a trading range in the past 25 weeks. The market closed at the bottom of the TR. It has a 50% chance to shoot back up. Wait for momentum before we get in.Ā
InĀ Germany, inflation stood at 6%, a level not seen in three decades. The FEAR is also causing the market to behave in Risk-Off mode.Ā
Technical: $EWG also has the potential to form a wedge. Until $VGK show some momentum, we also want to stay out of German.
The Same FEAR also causesĀ CryptocurrencyĀ toĀ crash.Ā
I have warned my Twitter follower of the potential crypto crash on the 2nd of December 2021.Ā
The market did exactly that.Ā EthereumĀ crashed more than -25% before market buys back at $3400.Ā
BitcoinĀ is down 26% from the peak. I was dropping from $69K to $49K. At the moment, there is no sign of market reversal.Ā
Don't let the FEAR hunt you; there is still huge potential in the Asian market:
Asia'sĀ growth forecast for 2021 has beenĀ revisedĀ to 6.5% by the IMF, vs. April forecast for a 7.6% expansion. But let's look at the positive side.Ā
VaccinationĀ rates have picked up significantly across the region - which will boost domestic recovery.
As forĀ inflation, it's not as crazy as the developed county due to repeated rounds of lockdowns
StrongĀ global demandĀ for goods from the Asian region continues to pick up.
Asian equity markets have underperformed Europe and US markets for the year.
More than 68% of the companies in the region reported positive third-quarter earnings surprises. Earnings growth of export-oriented companies far outpaced that of domestic-oriented companies.
Technical: Then the entire year looks like a bear flag. When it's due, we are expecting the price to Breakout from the channel and make a comeback to $100.
It's essential to know where to allocate your capital. I love those beat-up regions in the Asia Pacific, especially China. For my Eastspring investors, I would have their portfolio geared towards China A-share and the other Asia Pacific regions.Ā
Here are four things you should do as an investor before 2022.
Step 1: Review your current investment plan to see if they are aligned with your new life aspirations and goals
Are you expecting a new addition to a family or planning to get married, pursue a freelance career, or retire early?
Step 2: Evaluate your asset allocation
An investorĀ approaching retirementĀ may need to carve out a more significant portion of his portfolio to more defensive asset classes like fixed income.Ā
An investor who can afford to takeĀ more riskĀ withĀ a longer time horizonĀ can consider having more exposure to equities for capital growth.Ā
The best test is to ask yourself if you would sleep at night knowing how much risk you are taking in your investments.
Step 3: Rebalance your Portfolio
Say you have 30% in Bond, 40% in China equity, 20% in Malaysia & 10% in the Asia Pacific region at the beginning of the year; now, the % might have changed due to market volatility.Ā
Rebalancing is then necessary to correct back any portfolio drifts.
Step 4: De-risk & Diversify your Portfolio
You might have two funds that are concentrated in technology stocks. You need to De-risk and find the fund with zero correlation- e.g., banking and consumer goods.
Diversification can helpĀ minimize riskĀ andĀ smoothen returns.
If you don't find a way to make money while you sleep, you will work until you die.
Let me help you to make this šš¼ happen. š
Until next week. have a great week ahead.