Wednesday, 8 October 2014

The Brutal Murder of the Straits Times Index (STI); Does It Affect You?

As we all know, the STI has seen some severe beatings starting from January 2014, occasionally picking up only to be damaged some more.




As I have only begun investing somewhere around August, I was not aware of the STI before that. So I did some research on the web.

January 2014
On the second trading day of the New Year a.k.a 2014, the Straits Times Index (STI) fell 43.18 points, or 1.36 per cent. And that one-day drop caused the STI to end the week 0.57 per cent down at 3,131.47.

It also gave the speculation that the STI may end the year in the red, since many people believe in the "Start Strong, Finish Strong". Therefore, the converse is also true, "Start Weak, Finish Weak". Something like that!


June 2014
Following that, STI ended the first half of the year on a losing note, falling 15.38 points or 0.47 per cent to 3,255.67.

"We do not see the markets recovering soon in the absence of fresh factors and continued worries over political uncertainties in some areas."

"Growth will be slight or flat, which does not generate interest in such a market," said NetResearch Asia in a note."




September 2014

Come the month of September. On the 16th of September, the STI fell early and continued dropping at a faster pace near the end of the day.

The STI ended 33.08points at 3,312.47 which was also the intra-day low.

"Fears of interest rate hikes in the United States, concern over the Scottish referendum and signs of a slowdown in China belted shares yesterday."


"It was a sea of red throughout the trading session with the Straits Times Index (STI) falling early and dropping at a faster pace near the end of the day."


If investors needed more reasons to get out of the market, they got it over the weekend when China reported that industrial output last month grew at 6.9 per cent, the lowest level since December 2008.

Banks, which have been lending support to the local market, were among the big losers yesterday. DBS fell 24 cents or 1.3 per cent to $18.28, OCBC dropped 10 cents or 1 per cent to $9.67 while United Overseas Bank declined 24 cents or 1 per cent to $22.80.

Property developers also had a disappointing day on news that the sales of new private homes last month was 432 units, the lowest level this year.

CapitaLand lost seven cents to $3.22, City Developments decreased 12 cents to $9.74 and Keppel Land dipped three cents to $3.43.

(BusinessAsia)



With all these horrifying news from the local media, it's no wonder there has been increasing panic with people rushing to selling as much as possible. I've even overheard several uncles at the nearby coffeeshop discussing their options for selling and attributing this to the protests going on in Hong Kong. Well, in my defence they were all talking very loudly.

October will affected by the protests going on in Hong Kong? What does everyone think?

For individuals, especially young investors who begun their investments already, it's certainly not the best feeling in the world to see your investments take a huge beating. Almost instantly, if not gradually over time the overall value of your portfolio has dropped drastically.

This has prompted many to sell as fast as possible to effectively cut short their losses as they are genuinely afraid of the price falling even further if they continue to hold.


In view of these times, I do wonder how fellow financial bloggers feel. One thing's for sure, I'll be an avid reader to all the posts!

How does everyone else feel? Please feel free to share!

Signing Off,
Teenage Investor

10 comments:

  1. The more it drops, the happier I'll be. Basically that's it ;) these little drops on sti are small stuff lah, wait till you see a 200-300 pt drop lol! I know many Lao jiao are also waiting for a real bear to come to make a killing.

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    1. Haha, Hi LP! I'm sure many opportunities await should there be a real bear. I'm more concerned about how young investors who just begun and see their investments taking a hit. This is all the more true for emotionlly-charged individuals. The slightest drop will send them into a panic

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    2. A good time to test themselves if (a) they can really withstand the volatility, and (b) they are confident with what they have invested into - esp. buying a business, or tikam tikam?

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    3. Young investors like me uses the volatility to my advantage. There will be losses but with strict discipline, these losses can be minimized. To me, I will often target a random company with above average trading volume. In this way, I will not be afraid of the stock being dead.

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  2. Sounds like a great time to look for bargains!

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    1. Haha Lizardo! I agree though, buy low sell high maybe? ;)

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  3. I bought genting at 1.33, at that point of time everyone was talking about genting reaching back to 1.40-1.50. now look a it ?, one of the worst STI Stock

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  4. S&P 500 Index just had one of the best days in a year, thanks to the Fed's "considerable time" message. Asia markets are likely to follow suit.

    While I am hoping for the market to correct (so that i can buy), the absence of any major trigger makes this scenario unlikely in the near future.

    Up and down. Up and down. Such is the stock market and the mood of an investor. :)

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  5. I like it when the STI drops, which means I can buy it at a cheaper price. Don't we all love it when we get discounts when shopping? To me, it is the same when it comes to investing.

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    1. Hi Turtle Investor! I agree! Personally, I purchased STI at a cheaper price than usual.Sucks to have limited capital when prices are falling!

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