Skip to main content

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.

Labels:

Comments

Post a Comment

Popular posts from this blog

Thankful

Being thankful in any situation is a positive attitude. It brings peace to the mind and rest the heart. The result is a healthy body and a smiling face. Today go about and spread the story of being thankful
Post a Comment
Read more

More is Certain

I had been working on an acquisition over the last three weeks and it was the most tiresome experience ever. The target being a public listed company means that any news leakage will drive up the share price. The purchase price of a public listed company will carry a premium on the share price. In Asia, I noted that the premium given is about 10~15% but in the USA, it is between 20~40%! Just imagine, if you spotted a target and you buy into it, and you hit the bull's eye! You could make quite a bundle. Of course, your guess could be wrong, and if so, expect that share price to go down, when the news is announced. For those working on such a deal, expect tons of information to be provided to you, and most of this could be outdated. However the bank (usually) engaged to do the job wants to impress you with documents. After all, more means "we are doing something" compared to "less but quality stuff". So, I have to keep sieving lousy information, to get out what is...
Post a Comment
Read more

Is Gen Y in trouble?

Gen Y are people born somewhere in the mid 70s, and should be around thirtyish by now. Most of them in the developed countries are used to the good life style. Is this generation in trouble? Here's an article from Business Week. Think about our kids, who are part of this Gen Y. http://www.businessweek.com/investor/content/jul2010/pi20100715_116291.htm The Straits Times in Singapore carried a couple of articles as well on Gen Y. They are more attuned to pop, iPhone, gaming, luxury goods, pub, wine which the baby boomers avoid to plan for the future. What will the future hold for them and for us? Do we have to support the Gen Y as well from our retirement fund?
Post a Comment
Read more