2018 is a good year to invest, our expert says.
More than half the year has gone by, and we’ve already seen astonishing progress in the rapidly changing global relationships between major players like the US, China, and North Korea. How should investors manage such volatility?
In our exclusive April webinar, AB Maximus, SGX Academy and Bursa Malaysia trainer Chua I Min shared his predictions for the market in 2018. We round up three key pieces of advice for investors
1. 2018 remains a good year for stock investing
While stock values may seem high, they are not considered overvalued. Corporate earnings, and the market, have room to grow by about 10% this year.
The main macroeconomic indicators – namely, the unemployment rate and Purchasing Managers' Index (PMI) – for economies like the US, Europe and China show that the global economy is in good shape.
There are a couple of significant events that may cause some market volatility: the Sino-America trade wars, interest rate hikes and Brexit, but these events should not cause severe downturns, and corrective rebounds are expected.
2. US debt could majorly impact US stock.
The debt level of the US is definitely in a risky zone. This poses a very significant risk to investors and could be a time bomb waiting to blow-up. It is unwise not to react. Investors should watch the situation in the US closely and assess their investments often.
3. Industries and countries benefitting from China’s One Belt One Road initiative could be great areas to invest
The One Belt One Road developments provide good growth opportunities for countries and corporate entities. We can expect these positive effects to flow over to the stock market as well. Sectors with the best growth potential include manufacturing, real estate and telecommunication services (a sector impacted by smart technologies, which the Singapore government in particular has plans to develop heavily in the coming years).
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About the Author
Chua I Min, CFA, is AB Maximus’s lead trainer in CFA® Program exam prep. He is the author of 2 books on share investing and real estate analysis, and founder of the website Invest Coach. He previously worked for PhillipCapital.