#166. Predicting Market Trend

This Is A Reply To Those Who Ask For Market Trend Prediction

An Anonymous left a comment on article #161. Unit Trust Agents And Your Investment 2:

it is easier to talk and suggest thru the historical chart for the point(indicator) to buy ang THE LOWEST, and sell at THE HIGHEST, however, can you tell us when is THE LOWEST, will it in 2009 or 2010?

And another one by the name of sewhong left a similar comment and question on article #133. Recession Risk In Malaysia:

You are quite well know about Public Mutual, you did quite a lot of comparison via Public Mutual fund as well, including the link, you have writen in one of the article that PBGF is not sell by agency, on the other article, you mentioned UTC need to continue promote due to their rice bolw, thus, seldom/hardly gave good advice, moreover, UTC in m'sia is tide to single UTMC, and you also mentioned UTCs should able to predict market trend well. 

First, can I presume you are Public Mutual agent as well? Bcos you are recomend or compare for single UTMC

Second, can you predict market trend? Just do some sharing on 2009 and 2010, it will benefit to UTC out there, and a lot of new investor. 

I think it is going to be a lengthy discussion and more prudent for me to reply on this article instead of leaving my comments on those two articles. In fact the questions are almost similar, so I will address them together here. 

To the answer now.

First, it is irrelevant whether I am a unit trust agent or not. And it is of no matter whether I am with any UTMC (Unit Trust Management Company). I am just someone who is passionate about investing my money and sharing some information here. 

And the information I share here is just my thought and should not be treated as an investment advice. Readers should do their own due diligence. They should make their own judgement. 

Me, predicting the market?

Second, can I predict the market trend? Before I answer that, read this article from The Goldsmiths. 

The market is manipulated on a global basis. And it is the global market that influences and affects our local market. 

I must say I can't predict the market trend. But I can use the technical analysis to make calculated guess where the market is going to be in the next one month or two. Therefore, it's very reckless to advice an investor to invest for long term (especially in investment like unit trust that suggests long term outlook) without monitoring the trend everyday (short term). 

The stock market where unit trust funds are invested in can make very sharp u-turn quickly and wipe a person's wealth out. This is clearly seen last year and this year (2008-2009). Those who have invested thinking it's for the long term may not see their investment recover back to the original level in many years to come. 

If the investor have good investment advisor, the risk might be mitigated by cutting loss early. Or at least have sold when the profit was made instead of holding on to it and see the investment diminished in value.

Talking about investment advisor, I am under no obligation to share my thoughts with anyone especially on a public forum like here. I write as I please. And the thoughts and opinion here should not be treated as investment advice. Readers should do their own due diligence and make their own judgement. I am not your investment advisor.

Take your own initiative to study about the trend

Furthermore, if there is any UTC (unit trust consultant) or new investors out there looking for investment tips, they should seek their own UTC supervisor or UTC respectively.

I don't gain anything at all, why should I share my ideas here with the UTC? They should talk to their supervisors and learn from them. Ask the supervisors to share their advice on how the market is going to be. Ask the supervisors to teach them technical analysis. 

If the supervisor can't teach them, perhaps they should find other ways to learn ~ from books or internet. Why can't the UTCs and investors learn on their own? I learned most of the things on my own without any teacher. I watch the market goes up and down and make me breathe faster at times. I feel happy when my forecast is right. These UTCs should go through the same experience themselves and learn. Investing is not praying for the market to go up after you have bought. There is a place for praying, but not in investment. 

If there is any UTC reading this, ask yourself, have you ever learned any good technical analysis in your UTCs meeting? Why not? Isn't understanding your product and market analysis the most important thing as a UTC? Why is technical analysis not taught and discussed in the meeting? Why is the meeting always about 'sell more, sell more, how to sell in bad times, how to sell successfully, how to get your customers to say yes, and such'?

The UTCs meeting are no different from any sales meeting of any company. However, the emphasis should be placed more on understanding the product and technical trend analysis. The meeting should not be only on polishing sales skills. To be a good unit trust consultant, one has to have good knowledge on the market and technical analysis. Because the UTC is sort of a wealth protector to the investors. Think about it, the advice of the UTCs will result in the investors' wealth being augmented or diminished.

Next, if the investors want investment advice, they should seek the UTCs that have sold them the unit trust funds in the first place. If they think the UTCs are not good in market knowledge, they should not have bought from them in the first place. However, if they have bought and now think that the UTCs are not good enough for them, find a better one. Better still, learn the knowledge yourself.

People take things for granted

But, you see, the problem is many people found that their UTCs are not good enough only too late after their investment has suffered a loss. And then they write to me to ask me what to do with their investment, and ask me to share the advice on the market trend for 2009 and 2010. 

Well, I try to give some advice whenever I can. Remember, I don't gain anything from doing this. And so far no one has given me anything for my advice. So I find it rather rude when people demand my thoughts (by typing in CAPS) as if I owe them some money. 

Perhaps, these people (which I guess are UTCs) are offended by what I write here. Well, that's natural is it not? You tell the truth, you get someone showing you a fist. You tell more truth, and people want to ask for a fight. This is how I feel now. I feel that people want to challenge me to a fight by demanding for my prediction. 

You know, you may have watched on some movies, the old man is challenged to a fight when he said to the young man, "Is that the best you can fight?" You get the idea?

Anyway, prediction is not quite the right word in my opinion. Speculation or forecasting might be more appropriate. So, that's it. Whatever my advice is on this blog, it's merely my own speculation and forecasting. And I am not obliged to share my advice with anyone here. I write whenever and whatever I please. 

I am not being arrogant here. I am just revealing some truth and creating some awareness to people who invest their hard earned and 'blood-sweat' money. People want to see their investment grow. That is the simple truth of investing. If any investor is losing money, it surely is an unhappy thought. The job of a UTC is to ensure that the investors do not lose a single cent. The job can only be performed successfully by deepening the knowledge in market and technical trend analysis. 

Learning through sharing

Challenging someone else to a fight won't improve your fighting skills. Sharing your fighting skill (that's why we have friendly sparring) with someone else might. Sharing through exchanging ideas and views will help us learn to improve. You share your view and I will be more opened to share and add on mine.  

Recently on this blog, sharing and exchanging on gold investment have been a very rewarding experience to me and the readers. Those who have participated by leaving their comments, I thank you. You are very good people who share your views and ask in a nice way. This is what separate the men from the boys.

Hope we have continuous sharing of knowledge and increasing our wealth during this market situation.