So much cheap money, why are we still holding on to cash.

Fed's bond buying program had reached $4 trillion worth in assets and they are not ready to stop yet. People who have not invested in the stock market may see their value of the cash or savings getting lower as commodity prices increase along with the cheap money floating around the world.

Source: http://online.wsj.com/article/BT-CO-20131219-710800.html

Next year, SMRT announced that they may increase fares to keep their business sustainable. This is an indicator of inflation.

Source: http://sg.news.yahoo.com/fare-hike-proposals-submitted--ptc-105820955.html

The amount of money printed is close to about 3 times of what they printed previously, erasing debts too much to be repaid. When debts are reduced, the banks keep the borrowing costs low for enterprises or state-owned enterprises to lend cheaply to boost economy. This could led to the increase in share prices across the world, but the only thing that does not change is the value of the currency and the fundamentals of the company.

Companies that take in more loans to try to increase profits may not be able to sustain. It is because when operation costs far outweighs the profit, no matter how much loan the company take to improve profit, in the long run it will still incur losses due to high interest rates and operating costs.

Therefore, it is very important to look at the past performance of the company. Fundamentally strong companies, with this historical excellent performance will continue to do well while weak companies will continue to deteriorate.

It is the same principle why the rich gets richer and the poor gets poorer.

There are still good deals out in SGX for grabs.

Tapering! Should i enter?

Should we as investors care about Fed's tapering even if stock prices has gone down quite a bit? Low interest rates has certainly improve earnings across companies. There are certain companies with low debts or rather no debts and still maintain constant earnings.

Tapering will only affect those companies with high borrowing rates and will affect less for companies with low or close to zero borrowings.

As economic outlook improves, tapering might kick in to maintain or improve the strength of the currency.

When it doubt do not enter the market, there are still uncertainties ahead and nobody knows what will happen next.