2014 is on full swing at the financial markets. Yesterday. No, last year! Yes, got some new positions already in preparation for the opening of the year. Most of them are “bullish” bets or positions that ride on an uptrend. We have seen stocks rise prior to the end of the year, but there is still a good chance that the rise will continue given the “January effect” when investors go back to the market, fresh from holiday revelry and relaxation, to do, what else, but BUY and get back into the market, pushing prices up.
There are, however, people who may already be looking to exit the market so, just be aware that there could be a lot of short-term volatility from the actions of the profit-takers. Anticipation wins. Always.
I wish I could say that we will have stellar year in the stockmarket, last year, the S & P (US market) rose 30% — an indication also of the health of the world economy, so let’s look at the exciting moves for 2014
1. Gold – will never be the same again. Is the American economy getting better, yes it seems, so gold will definitely lose its luster to investors –but hear this, it’s not going to be smooth sailing. Events like US debt ceiling, budget negotiations, all add to the volatility in the market, but I won’t take the “buy on dips” philosophy on this one, one has to ride the major trend, and the trend is down on gold.
2. China – OK, we know they are gunning for superpower status, but it is going to be a slowed-down version rather than the skyrocketing fashion of the last decades. They said so themselves, they are trying to “spread” the financial gains in the threat of “rural uprising” so it seems, so the China bet is going to be a walk in the Great Wall, it is going to be a long, hard climb. I’m going to lessen positions in miners and move on to stronger sectors. Except if the said miner has oil assets like BHP as increasing economic strength will help demand.
3. Strong sectors — which ones? I think there is a lot of talk about tech sector, airlines, healthcare, housing, retail etc. Those that people do need to spend on and spend on big! I try and simplify my life though and just taking a bigger position in banking. After all, banking is the same everywhere in the world (they make money from your money), and it is easier to monitor the bigger picture with it and has already seen strength and support (er, cleanup) from the government.
And what about “emerging economies” who were the darling of the stockmarket early last year. Is there going to be yet another BRICS, CIVETS or TIPS group of countries who will make a big difference in this world? We’ll have to see. If the country depends on China, you know the answer to that. It appears that Japan is getting stronger and the currency is being weakened, so it has been attracting money. Those that are exporting to the strengthening US and the EU countries will definitely attract attention, but beware. Government instability shoos away money — that’s something to be aware of in Thailand. I’d say it is wiser to put money to less risky places. US is it!
I will write more about “moving” on the investment psychology side of things in the next blog. That one requires deeeeepppp introspection and meditation and I have yet a few social engagements for the New Year! (And good food to finish!)
Happiness and Abundance!!!
