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Old 29-12-2008, 04:15 PM
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I think this applies to getting advice from all the "so-called" experts. It was not only the property experts that said 2008 was a good year to BUY.

If you read all the top equities analysts reports, most of them said BUY! If you read a particular commodities' expert's articles, his view was that commodities was on a bull run or whatever. When the market peaked, he said BUY, when the commodities index came down 50%, he said don't worry hold long term buy. If you read what the head of the leading online fund distributor in singapore said at the beginning of 2008, his advice was of course BUY, when it came down 50%, he said it is cheap, he says BUY more now.

At the end of the day, these people are just doing their jobs to talk up the market. Some actually believe in what they say in a naive way, while others are just marketing people paid to talk up the market.

At the end of the day, I believe that it is the contrarions that make the real money. Buy low when no one has the guts and sell when everyone is buying. But it is a strategy that takes guts as it is difficult to time the market completely, you can't possibly buy it at the lowest nor sell at the highest, so you will need some stomach for this.

One person who does that well is the gentleman that bought Natsteel cheap understanding the real fundmamental of the steel industry which was about to turn as well as selling SC Global at the peak of the property market. This is one astute investor that understand business cycles and taking profits.

I also do not subscribe to the blind theory of long term investing. This is what the experts always say when they are wrong, they say that in the long term you will make money although you have lost money in the short-run. This is also what the experts say when prices has run up and why you should be continuing to buy property, stocks, commmodities etc, that in the long term you will make money although you may lose money in the short term.

Blind long term investing subscribed by many so-called experts is crap, because they subcribed to the fully invested theory. If you are always holding to investments long-term, you will never have sufficient cash to BUY when the markets are low because you are always fully invested and do not have cash.

I believe that asset allocation is the most important strategy for any individual, when markets are high, you need to be willing to allocate significantly more of your portfolio to cash by taking profit. Although, you may feel the pain of seeing opportunity loss when the prices continues to go up, at some point in time your decision will be right. The same when the market is down, you need to signficantly allocate all your cash into investable assets. Again you might be wrong in the short term as market may go down, you will do alright when market recovers.

At the end of the day, no one can make you rich, only yourself. Use some common sense, don't just trust the so-called experts blindly.

I have not done brilliantly in my personal investments as I have been conservative, but I have not loss much. I still have 85-90% of my total capital as it was mostly skewed towards cash, fixed deposits, preference shares. In 2009, I will be looking to deploy most of it into equities and oil ETFs. In 2010/11, I will possibly look at property as I believe that this property downturn will last longer. History has also shown that property is always the last asset class to move in a bull market.

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