Dear readers, are the Singapore Stocks Markets to crash soon? Well, this could be surprising to many given the Singapore Straits Times Index (STI) has reached a high in recent years.
Specifically, the STI is currently at 3,592.42 based on the close today. At this level, the STI is close to the 3,800 level reached in 2007, some 17 years ago. And we all know what happened shortly after reaching the high in 2007, the STI crashed to around 1,600 in 2009 during the global financial markets meltdown.
I am not saying that the STI crash is inevitable. What I am saying is that there is a tendency for corrections after a multi-year high. At this point in writing, we are very close to a likely interest rate cut by the US Federal Reserves. Many are banking on the cutting of interest rates for a boost to the stocks markets.
Yes, in theory, a cut in interest rates will make equities more attractive. But in practice, there is always a confluence of factors. I personally do not find many positive factors for a continued run in the Singapore stocks markets. Rather, there are more uncertainties like the US Presidential Election and the geopolitical tensions.
Be Fearful when others are greedy and push up stock markets higher and higher. This is Warren Buffet’s famous saying.
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