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Thursday, October 14, 2010

Best time to invest in US Stocks

Recent surges in Asian stock markets to all time high, gives two branches of investors. One, is this is the maximum from historical data. Thus it is good to wind down. Two, is that this is a continuous bull market and upsurge will last as long US and Europe is weak, meaning investors there must channel their funds to more potentially profitable markets with growth. Both are valid. 
US Dollar is going lower and has since fallen across the board an average of 10% this year.

So another way to look at a big picture and rethink the investment strategy is to look at the market that seems to be weak or going to be. Look at stable tech stocks that are listed in US Nasdaq. Microsoft, Nvidia, Cisco, are unbeatable stocks in their own right. Therefore they have the stability to overcome time. And imagine $20 USD for Microsoft 7 months ago, now it is still around $20 USD. BUT - you're paying a 10% discount assuming you're basing your home-currency or base-currency in Asian currencies - such as Singapore dollars, Malaysian ringgit, and Thai Baht. 

How low can it go is anyone's guess. We can look at historical data for some leads. And the lowest stable time was before 1997. Which is fast approaching a reality for the USD against all or most Asian currencies. 

US government policy is to weaken the USD further with quantitative easing. And at the same time making nuisance call to China to appreciate the yuan astronomically. These politicians don't have the slightest idea how money market works and how impossible for it to "revalue" a currency. That is the main reason and a laughing stock joke by foreign dignitaries - and China mentioned it spot on. You have to solve your own problems, and not blame others. 

Take for instance - revaluing a currency. If it is that simple, then Zimbabwe could "revalue" their currency to 1 ZWD = 10 USD? Or 100 USD? Why not Singapore revalue the Singapore dollar to 1 SGD = $100 USD?! Yes why not? Then everybody could just go and buy several properties, own dozens of US stocks and corporation? 

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