Dear readers, Singapore stocks markets are likely to correct next more than ever. I have already shared the likelihood of Singapore stocks correcting from a number of angles, some of which are below:
Why the drop of the Straits Times Index could be exacerbated mathematically and emotionally?
Why Straits Times Index could drop to 1,700 from a historical price-to-earnings perspective and why it could even correct to 600?
My most recent re-iteration that the Straits Times Index would reach 2,500 as a support (and how it has come true now!)
In today’s post, let me just add to the above list another angle from which the Singapore Stocks markets are poised to correct next. Are you ready?
Well, without further ado, let me share with you now.
If you are to look at the current level of the Singapore stocks markets as measured by the benchmark Straits Times Index which is in the range of 2,500+, this is about the range Singapore stocks markets trade in Feb 2016. What is the implication of this? Well, it means that if a Singapore investor has invested in the Singapore stocks from Feb 2016 and hold on to now, by measure of the Straits Times Index, the capital appreciation will be zero. Of course, this is a rather simplistic assumption, since some investors may have profited much since Feb 2016 (on the converse some investors may have lost their capital over the period). But as a general working based on the Straits Times Index (benchmark of Singapore stocks), we could take it as that Singapore investors have achieved zero capital from Feb 2016 to now.
But just look at how the US key indices have fared since Feb 2016 till now:
Dow Jones Index: from about 16,000 to about 27,000 currently (about 68.8% increase)
S&P 500: from about 1,900 to about 3,300 currently (about 73.6% increase)
NASDAQ composite: from about 4,500 to about 11,000 currently (about 144% increase)
We could infer from the three key US indices that as compared to a Singapore investor who achieved zero capital rise from Feb 2016 to present, an investor in US equities would have done much better (about 70% capital appreciation for Dow Jones Index and S&P 500 and almost double for the technology-centric NASDAQ).
In view of the significant increases that the US stocks markets have been reaping, it is likely that the US stocks markets will correct eventually. And when that does, the current Straits Times Index at 2,500 will be pushed down and this may coincide with the next financial stocks markets crisis which many have said to be more than a decade in the waiting!
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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