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Graphical Update of the Asian Crisis



The graphics showed the 10 years GDP growth and the stock market index of the countries in Asia Pacific.


Here is a GDP definition. Gross Domestic Product is the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. Few countries will have double digits growth, save for China and some emerging countries. However, Singapore is an exception. The diagram nevertheless showed zig-zaggy change for most countries.


By contrast, the stock market indices grew by multiples in all the countries. Is there a correlation between GDP growth and stock market performance?


You will have to interpret it, and more likely, you will need additional data to make some sense out of it. The fact is that if you have invested in an index fund that tracks the index, you will be very comfortable with your gain. When I first was made aware of ETF (Exchange Traded Fund), the STI ETF was about S$20. That was back in 2004. Today, it is about S$35, tracking the STI index quite well. Will the STI index go to 5000 as some have predicted?


How about all the other indices in the region?


The idea of this writing is for you to think about your own personal investment in a very complicated globalized world. You can put your hard earned money in mutual funds, savings, insurance, equity or use a financial advisor or even use the service of private fund managers. The investment scenario is exciting and interesting because it is your money and eventually your lifestyle that will be impacted.


It is wise to be educated than to gamble without understanding.

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