What is worrying Singaporean stock investors?
Search term ‘stock crash’ spikes in Google Trends
- Results for Singapore, past 12 months
- Previous spikes associated with early-January period associated with global stock market correction led by China as well as during period associated with Brexit.
- It is notable that this week’s search activity is stronger than during the Brexit period.
Reasons to lose sleep at night
- Investors look for reason to explain sudden 6% crash in B-shares on 17 October.
- There is increasing apprehension caused US Presidential Election.
- Stock market investors worry that US Federal Reserve might raise interest rates in November/December.
- Warnings signals of impending crash like this and this are appearing more often.
And finally the strongest possible reason – that because investors are now forced to jump through hoops to get any kind of return at all, investors have pinned their hopes on stock market returns. In this story ‘Online poll tells us why stock markets are outperforming‘, I followed an poll created by SharesInv.com. The poll was run in Chinese. This is the updated result today.
If interest rates for bank deposits go to negative, you will…
Option 1. Buy stocks especially high dividend yielding stocks (43 responses)
Option 2. Buy gold and other precious metals (7 responses)
Option 3. Put money into foreign currencies that preserve value (6 responses)
Option 4. Store money at home in a home safe deposit box (3 responses)
Option 5. Trade HSI/DAX (2 responses)
Back then I wrote the following
3. Option 1 is most popular and explains why global stocks are rising – all part of rush to pin down positive yield of any kind.
4. There is a cultural, historic reason for individuals to go into Option 2. It is a reason why gold and silver are revising into bullish trend. The way I see it, as long as the current crew of central bankers remain in charge, they will double, triple down. ZIRP, NIRP all coming soon. So gold will be hammered down until it cannot be hammered anymore and then we will see 2011 repeating or maybe even higher.
5. Option 3 explains why currencies like AUD and NZD that still has a positive yield tends to outperform whenever risk-on market sentiment is turned on. I have also written about the merits of protecting value through forex diversification.
I think that unless there is a u-turn or radical change in direction of economic policies, this is the direction for investors for the foreseeable future, ‘stock crash’ anxieties will continue to rise.