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Wednesday, January 29, 2014

Stick to fundamentals

Stock markets in US dropped due to the further tapering of bond repurchases by Fed from $75 billion to $65 billion.

The initial sum of bond buyback was at $85 billion and was cut to $65 billion, a decrease in $20 billion. The total sum of the repurchase efforts are estimated to be about $4 trillion, according to CBC news.

Source: http://www.cbc.ca/news/business/u-s-fed-to-taper-bond-buying-program-to-65b-a-month-1.2515564

Gold and silver prices saw themselves decline tremendously, even though inflation rates are rising. The safe heaven for hedging inflation did not prove to be useful in current economic trends. No one knows when or how the direction of the precious metal will go but it is like a waiting game to hold on to these sitting ducks.

Stocks like Singtel are still holding on to the strong resistance price of $3.5. M1 and Starhub seen their prices appreciated or maintained in good or bad circumstances.

Margins of safety

Sick to companies with low or no debts and good cash flows.

Growth

Banks or property counters with assets of highly scarce supply. However, it is a challenge to manage risks that comes with these stocks. Good or bad news will likely push the stocks up or down. Market prices are determined by investors like you and me and does not justify the true value of the stock. A good growth potential stock might be dropping in price but may rise higher in the long run.

Dividends play

REITS with good dividend yield and low net gearing ratio.









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