FBM KLCI...Can We Trust the Index?


The local stock market indices have become relatively irrelevant to many retail investors. This can be witnessed from the dwindling of retail participation.

No one (retailer) seems to get excited when index stages a breakout and no one also seems to fret when index breaks support. What a meaningless market...?!

Many say this kind of market can't go on forever, but it could possibly go on for another few years as Fed has just pushed it to another limit, in terms of its accommodating stance in the setting of a more distant target in unemployment and inflation rate than the earlier rate holding till 2015.

Will this really help the economy? At this moment, I only noticed businesses continue to become conservative in hiring and expansion (some are hoarding on cash and start losing idea of what to do as they are no longer the "boss", the government is!). Investors are also a lost group now that assets prices are no longer cheap and economic prospect continues to be uncertain.

I foresee more investors to continue suffering from the "price trap" of assets, not meeting their expectation of returns, particular in property and gold investment next year.

On a separate note, I thought I came across an interesting research title from CIMB Research..."Reminiscences of the Superbull", talking about us coming to the 20th anniversary of the 1993 Superbull run in stock market and the wishful thought of seeing a repeat of it. I'll write about this next...


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