The seven "R"s for 2011

January is always packed with talks and seminars on how the year will turn out to be... and from one such talk, I compiled the list of "R"s that can affect the investment markets this year.

First R- Reflate the US market. US is facing deflation and the challenges faced by the economy and the measures taken to reduce the Deflation could impact the world market.

Second R- Rebalance Asia. While US is facing deflation, Asia is facing high inflation. The inflationary pressures are huge and that could have a negative effect on the market.

Third R- Resolve the Eurozone Debt Crisis. PIIGS- Portugal, Ireland, Italy, Greece and Spain were in serious debt crisis in 2010. How they manage it this year will have an impact on the markets.

Fourth R- Remember S&P 500. Historically, if the first 5 days of S&P trading is up, S&P ends up high end of the year. This has turned out to be true for 37 time of the last 41 years.

Fifth R- Rally in US markets in the 3rd year of the US presidential term. Again, statistics shows that the 3rd year of the US presidential term has always had a market rally and on a average the markets have risen more than 10.5%. This statistic is particular true especially in the first term of a new president.

Sixth R- Year of the Rabbit. CLSA does forecast every year on how the Chinese year will be. To read the full review please go to the link below. These are for Hong Kong Market. Overall, their prediction is that the Hong Kong Market will do a bunny leap this year.
https://www.clsa.com/index.php

Last and Seventh R- Reality. The speaker tweaked the words of Forrest Gump- My Mama said, market is like a bag of chocolate. You never know what you will get.

3 steps to your Financial goals setting

Planning is a loborious process and when we break down the process to steps its easier to understand and execute.
The 3 main steps to Financial goal setting are

• What you have
• What you want
• How to achieve it.

What you have:

Reviewing current financial position is very important process. If you are in a lot of debt and want to save a million, it doesnt make sense, as reducing the debt is the priority before saving. A very easy process would be do a simple cash flow and find out how you are spending the money you earn. ( I have a template and if you want to use do email me)

What you want:

For this question, sky is the limit. A realistic goal which also takes little steps is achievable. Breaking down long term goals to small achievable short term goals is the best way to work this out.

How to achieve it:

For this step, categorising the goals is important. Savings, investment, protection, retirement etc. There maybe some overlaps too. This step requires time with your financial advisor to come up with a goal.

Some interesting Outlooks for 2010

January is generally busy for me as I attend a lot of Market outlook talks from different people- fund houses, analysts, and even laymen who are Pro in investing...

Here are some views to ponder on....

1. 2nd Year of US Presidency- Historical data of the market has done well in the first year of a Democrat President. ( exception of Mr. Jimmy Carter) and keeping in line with that the first year of Obama's presidency the market has gone up by 30+%. The second year has always been flat and so based on that, some analyst expect this year to be flat.
2. Decennial Year- Year ending with 0...2010- Again going back to early 1900, every year ending with a 0 has not done well or the market is flat... so some are expecting the same for 2010...
3. 4 year Market cycle- When it comes to Market timing, the Pro's always argue that there is a pattern and its very easy to find. The four year market cycle. The last low was in 2006. So you can work back words and forwards to get the market lows. http://www.tradersnarrative.com/the-amazing-four-year-stock-market-cycle-867.html
4. Financial Astrology- Staying in Singapore and not looking at what fung Shui predictions are is a must. The Metal Tiger Year- 2010 - The Year of the Metal/White Tiger, (which begins auspiciously on February 14th when Valentine's Day is also celebrated.) This is the Yang Metal Tiger Year. Yang Metal over Yang Wood. Tiger = Yang Wood. Inside the Tiger, there is Wood, Fire and Earth elements. Tiger is the mother of Fire = Wood = seed of Fire. Unfortunately, Metal destroys Wood, so this is a destructive cycle and have conflict relationship. In short this is not a Peaceful Year according to Fung Shui.
   

My views - In the Financial scene, inflation could be a major issue that has to be resolved. The stability of US economy will will important for the rest of the world.

So this year I expect volatility however, there is also be a lot of opportunity to enter the market especially if one didn't do it in March 2009.

Any other views.....