The Pause

So the FED has finally curbed its inflation fighting zeal with the overnight lending rate now standing at 5.25%. Does this signal the peak or merely a pause before another march up the rate ladder? No one knows.

But one must remember that the stock market is only concerned with the interest rates. One also takes into account money other factors like the strength of the dollar, the price of oil etc . So my first advice to all investors is, keep your eyes on the big picture.

Think about this, I'm checking out for today.

" I'm out"
Quote made famous at an organisational workshop

Linus

Investing in the high

Just my thoughts about investing in this market high. As you may know, the Straits Times Index and S and P 500 index is now running at their all time highs, stocks running high how does one invest in this booming market.

I'm a firm believer of value investing, there's only so high the indices can go. As such, in selecting stocks,one has to be cautious.The strategy used would follow two principles

1) Select stocks from defensive or anti corelated industries to prepare for the fall. REITs for example, pay a handsome dividend and is generally non corelated. Food stocks are another options, since they are cheaply priced as investors go crazy on commodities and technology and biotechnology.

2) Use bonds. Bonds have been shown to be largely non corelated and are rather attractively priced,with interest rates at their highs.

If one is adventurous, one could always opt for a part of the portfolio in technology to ride the possible boom....but remember the party never lasts forever.

Linus