Thursday, October 9, 2008

Sectoral Investing



Sector Investing philosophy is that different sectors are stronger at different points in the economic cycle. The Market Cycle preceeds the Economic Cycle.
(What this means is that, the local Singapore Property Market is going to slump next. The local stock market is the precursor)

Based on the current economic climate, SGDividends see we are 1/2 - 3/4 way towards the bottom (trough) of the market cycle (Red). Utilities counters should fair the best now.

Investing Idea:
Based on this philosophy, the following should be the way one invests in this climate:

Now - Mar 09 - Buy Utilities/Infrastructure counters. Eg, CitySpring, Macquarie IIF, SP Ausnet, Singtel,SMRT, Reits

Feb 09 - June 09 - Buy Financial Stocks. Eg, DBS, OCBC, UOB, SGX

June 09 - Sep 09 - Buy Cyclical Stocks . Eg, like SIA, NOL

Sep 09 - Dec 09 - Technology Stocks . Eg, Venture

Dec 09 - Feb 10 - Industrials Stocks . Eg Keppel Corp, Semb Corp, Tat Hong

Feb 10 - June 10 - Basic Industry Stocks. Eg Golden Agri, Wilmar, Indo Agri, Straits Asia

Mar 10 - July 10 - Energy Stock . Eg KS Energy, Keppel Corp, Semb Corp

July 10 - and Beyond - Staples. Eg Sing Food, Raffles Medical

And the cycle goes on again. The dates are based on pure GUT feeling and i have no empirical data to support it. Stocks given are not recommendations but mentioned as they fall within the Sector category. Please take note though that this is an unprecedented crisis and not just a pure play recession and therefore the above might not work. Research smart and hard before investing!

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