Sunday, February 3, 2013

Reasons to buy if market corrects

At this juncture, I am still bullish on the markets, but is also prepared for a market correction, now that the markets have had a nice run. I tend to agree with Eastspring's Robert Rountree, that "it's just before dawn" and Asian equities time in the sun may be just around the corner. By the way, Rountree was known for being a prescient economic prognosticator and fearless market forecaster, who called the big Asian bull market back in 1993, and then in 1997, pointed to fault lines in Thailand long before the Asian financial crisis.

Here's why he is bullish:
  1. Asian markets were heavily discounted due to inflation and earnings concerns. Now that they have dissipated, investor confidence is returning.
  2. US Central Bank will not stop printing money until US unemployment rate falls to 6.5%. That could be another 18 months to 2 years away.
However, there could be a breather in the markets soon, but not to worry, as the rally will return stronger after that. Hence, get ready to buy even more when market does correct.

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