The Bursa Malaysia recently hit a 22 month low with crude palm oil futures dropping to a 16 month low. The Ringgit suffered the lowest it has ever been to the USD in the whole year as other commodities took a tumble amidst falling oil prices.
The looming September 16 deadline of Anwar Ibrahim’s intended takeover seems to have spooked our market a little further as investors wait with bated breath to see if Malaysia’s political situation will stabilise.
So is this a good time to invest in equity?
Based on what I have read, investment gurus are often of the opinion that there is no best time to invest. According to them, anytime is a good time for investments. Warren Buffet bought his first stock at age 11 and he now regrets investing too late! His secret is long-term investing.
Markets and commodity prices tend to move in a cyclical fashion. Markets that are down tend to have a lot more potential upside in the future compared to when it is on the upward climb. Hence, now might be a good time to watch, monitor and take advantage of undervalued stocks which has a strong management team, strong business and lots of potential upside when the market starts to swing back up in the opposite direction again. Some investors took advantage of the depressed market in 1997 to buy blue-chip counters for a very low price and made a killing when the price multiplied at least six to seven times in the bull run several years later!
Then again, A common question investors ask is “How low is low and how high will high be?”
There is no real answer to that as it all lies in your personal risk appetite and how much you intend to make from it. Human greed is natural and it is very common to hold off buying or selling a stock for fear that you might not buy or sell it at the best possible prices. In light of this, it is good to examine your intentions and investment profiles before you enter into the investing game.
Making an investment at the right time is never easy. However, having long-term investment goals and investing with only extra cash makes anytime a good time to invest.