The Great Singapore Sale

Here comes the time of the year where everything is on sale! Clothes, accessories, travel, lifestyle and even........................... STOCKS!!!!!!

Yes.... you've heard it! STOCKS!!!!

Up to 50% off Usual Price.... Bargains everywhere. And i must assure you it's not a UNIQUELY SINGAPORE event... hehe

So... is this the right time to enter the market? Many have asked me, from families, friends, fellow bloggers to some of my readers. Here's my answer to the million dollar question:

Invest in VALUE in bad times and GROWTH in Good.

So.... what does this means?

Using The Great Singapore Sale as an analogy, i shall explain the reason why. Say for example, you came across a brand or product such as Oakley, LV, Gucci which normally do not have sale and is now having a discount (and they're usually not big discount too), these are stuffs that probably will maintain it's value or even appreciate after the sale.

The converse is true for some shops or products. They are perpetually having sale. Products on sale during a period can be even cheaper a short while after the sale. They are cheap during the sale but they are not VALUABLE.

Likewise for stocks, VALUE stocks that took a plunge during such a period may fall below their fair value and this is exactly the time to hunt for such stocks. Whereas in the case of GROWTH stocks, one cannot be sure how much of the amount that was rubbed off was speculative growth or healthy growth.

Further more, one can't be too sure if the bad times are over. In VALUE stocks, at least you know that you have got it cheaper than what it already cost and would cost in the future. You probably just lose out to the other person who got it 5% cheaper than you (which is why even for such stocks, i would advocate buying in 2 phases). In GROWTH stocks, they may not have the financial clout and customer loyalty to ride through a crisis, not to say that market fundamentals sometimes changes during a big crash. GROWTH stocks are good during a rally because the very core of their existence depends on a good economy and extreme optimism in investors,

So what exactly are VALUE stocks? IMHO, i like stocks such as SGX, CAPITALAND, HO BEE, STARHUB, ST ENG, SINGTEL, F&N, APB and the likes. As for US stocks, i like CME, AAPL, BA, FDX, GS, NVDA etc.