Bumpy road ahead for Southeast Asia Stock Market

Recently, two incidents have sparked my attentions towards global stocks market especially South East Asia market including Malaysia stock market. 

 1) The plunge of Precious Resources - The Yellow Bricks, Gold 

 2) The bear-turning market for the Country of the Sun rises - Japan 

      For the second incident, the recent plunge of the Japanese Nikkei for over 6% has started its bear market when the Japanese stocks market has fallen more than 20% from its historical high into the recent low at 12,445.38. The world's third largest economy in the world, Japan, has plunged significantly due to the recent concern over the stopping or reduce of the stimulus package by the US, triggered by the Federal Reserve Chairman, Ben Benanke, who had not only once, but twice indicated that the US 4 years stimulus package or more famously known as the Quantitative Easing (QE) might have come to an end. The head-first dip by the Japanese market stocks was one of the biggest contributor if not the sole contributor, to the recent market buoyancy and volatility. 

       The imminent fall of the gold and other precious resources (excluding the commodities like crude oil)was also another indicator pointing that the stock market might have come to yet another series of consolidation. Gold has seen a steady rise in price since early 2000. It hit a new record of $500 an ounce in 2005. By 2008 it had reached an all-time high of $1,000 an ounce. In November of 2010 gold climbed above $1400 for the first time. It hits its highest peak ever in September of 2011, closing at $1921 an ounce. And then it dropped. It hit $1800 an ounce last October and dropped below $1600 in February of this year. Ever since, gold has lost its momentum and is heading into another greater fall, as most of the experts have predicted, USD 1000 by the year 2015. 

      For Malaysia, I couldn't help but have the eerie feeling of "deja-vu" for the price of the real estate market. Ever since 2009, the price of the real estate has boosted up into more than 100% for some hotspots like Bangsar, Petaling Jaya and Cheras areas. One of the phenomena which gives me the eerie feeling is the entrance into the real estate by totally outsiders especially the youths, because they are earning easy money. This is the similar reflection of the same phenomena which struck the Malaysia stock market back in 2006-2008 period. Many young engineers, IT workers, sales representatives who have not even the slightest clues of what was happening in the stock markets had braved themselves into the stock market dealers, unit trust agents because there was easy money to earn. Look at what had happened in 2008! The stock market crashed! 

       Hence, for the investors who are already in the stock market, however, there is no reason to be panic yet...For my personal investment, I suggest 2 simple strategies to ride through this troubling yet full of opportunity market. 

 1) First, I have grown significantly conservative about the stock market ever since the polling day in Malaysia, 5th May 2013. Yes, the market has grown more than over 50 points in KLCI after the polling date due to the clearing of the uncertainty which engulfed the market since September 2012, last year. Yes, some experts have anticipated that the stock market will grow higher at the end of this year. Yet, despite the optimism, there is no more stimulant of good factors to the market, at least, not now. The recent downgrade of the REIT in Malaysia has deepened my concern. Therefore, I recommend more conservative and defensive stocks at the moment. Bjtoto, a few selected of number-forecast company, is still paying a generous dividend of 5-7% per annum, could be well-considered. The price is stable and the company has ridden out of the 2008 financial meltdown almost, unscratched. CBIP, a palm mill company, paying handsome dividend of 7-10 % per annum (based on last year performance). Uchitec, a small- medium size company fix to its niche market of being the world's only coffee machine module operator and manufacturer, is also giving a good dividend around 7-10% per annum (based on last few years' performance). Of course, there are many more...but watch out because some companies which pay good dividend have already skyrocketed and the dividend per share will drop significantly due to the soaring price.

 2) Open a future account right now. Future or options allow you to hedge against the market to protect your stock when the market falls. Of course, it tends to have higher risk compared to the stocks because it is timely-fashioned. 

 3) If you are not in the stock market now, hold some cash in your hands. As the market becomes uncertain, or even turn into the bear, "Cash is king". We never know when the market will plunge to its low and at that moment, you will wish to have some cash in hand to pick up some good companies at discounted price. 

Look at some videos : 

Why Gold Will Crash To $1,000 - Nouriel Roubini Price Prediction

Jim Rogers predict global depression in 2013-2014

*The above mentioned strategies are my own personal opinions, and they don't carry the meaning of indicating any recommendation of buying, selling or holding any stocks. It is just for sharing purpose only.