Dear readers, the Dow Jones Industrial Average (DJIA) closed at 35,405.50 yesterday (25 Aug 21). Compared to the close of 19,173.98 on 20 Mar 20 when the global stock markets corrected a little, the DJIA level yesterday has increased almost 85%! That means to say if you have invested your monies in DJIA in Mar 20, you would have almost doubled your monies.
In the same vein, the Singapore Straits Times Index (STI) closed at 3,107.49 yesterday. The STI closed at 2,389.29 in Mar 20. From Mar 20 to yesterday, the increase in STI was 30% compared to the almost 85% for DJIA.
The global stocks markets have been rather quiet with not much of a correction, except for those Chinese technology-related stocks. Even for the Chinese technology-related stocks, they have already gone up back in stock prices.
If investors are to focus just on STI alone, that 30% increment since Mar 20, being modest would have had investors thinking that the stocks markets will continue to head higher. But I have to remind investors that Singapore stocks markets is a price taker, hence the local bourse here usually take directions from the broader stocks markets.
With DJI already up 85% since Mar 20, I believe some form of corrections are upcoming for the global stock markets to correct stock prices to a more representative levels (pls remember the world is still in the midst of a Covid-19 pandemic).
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