Incidental with the announcement by the US Fed on the upcoming tapering of the Quantitative Easing program, there are positive signs to buy into several equity markets and to long the US dollar against selected currencies.
The major equity markets will advance higher
Some would argue that no, they will crash because interest rates will rise.
My argument will be that yes, interest rate will risem but at a controlled and slow enough pace that will not hurt the economies. The respective governments will see to that because interest is at stake.
Yes, it is true that when interest rate was almost zero, asset (stock) prices were inflated. With the recovery of underlying economies, the reason to justify the prices of equities will move from low interest rate to improving company earnings.
Further coupled with falling US bond prices (due to rising interest rates), the great rotation from bonds to equities have began.
The above article does not represent the views of SG Wealth Builder. Personally, I feel that the stock market is in the midst of a massive bubble and have divested all my stock holdings since last year. Currently, Dow Jones is at a record 16,300. This means that the stock market is on a high. Investing in stocks at this stage carry a high risk. If you want to become rich in Singapore, practice value investing and asset allocation. Park some of your money in gold bullion.