You can get rich by following this strategy mentioned in
http://singaporemind.blogspot.com/20...ing-chart.html
Quote:
... The chart is taken from Property Prices Have Crashed (see graph) | Salary.sg - Your Salary in Singapore .
A few observations I made from this chart:
1. The stock market leads the property index in every downturn and upturn. However, there are many false alarms so that limits the usefulness of using the stock market to invest in property.
2. The chart of the property index is actually quite clean without the wild gyrations of the stock market. In every recession there is only one turning point and the property index continues in the same direction for a long period until the economic conditions reverses it - then it continues in the new direction for a while. You can see the private property index chart here - you will observe single turn points for each recession and recovery for the last 3 recessions.
3. As the property index trends up, any downturn in the stock market proves to be a temporary correction and the stock market is able to recover. As the property index trends down, any stock market upturn proves to be temporary and falters to new lows.
A simple strategy can be formulated with these observation which is to invest in stocks when private property index turns up and sell off your stocks when the private property index turns down. There is only one entry point and one exit point for a recovery followed by a recession.
My guess of what is happening goes something like this : People begin to pay higher prices for private property only when the economy has solid footing for sustainable growth so once private property prices turn, it means the economy is going to be good for at least a year or two. Individually they may be buying property based on their own financial situation but the collectively when many people are willing to pay higher prices it means there is a general improvement across many companies in which these people are working in in terms of demand/orders/profitability. The latest data from the URA shows that private property is still trending down which means there is a risk of the stock market recovery being pre-mature and unsustainable[Link] because the economy is still not on a solid footing for sustainable recovery. However, friends in the property business tells me that there was an uptick in late May and if this continue for 2 more month we may see the private property index ticking up for the first time in this recession.
|