Rainer's Investment Insights

We have updated our Asset Allocation Model to December 2012.  To view please click here. 

It is happening again: The Singapore Dollar is reaching 'danger zone' highs. For years now we Singapore Dollar investor have been struggling to harvest the gains around the world, as our currency has strengthened enormously.  After a historic agreement on supporting the USD (- on a trade weighted level) versus a world currency in October last year, this stress situation has eased off. SGD-USD range still holding, BUT... From the 9-month chart you can see, that since the agreement, the most the SGD was allowed to buy was about 80.6 US cents, after which the MAS would take action to soften the currency's appeal.  But every time we get back up to this level, its 'goose bumps time': will the currency break out of range?  What will happen if it does, i.e. will the SGD again become the target of the 'risk averse' investor and surge much higher? Will the STI start looking even more listless?  Do we have to change strategies from global to local again, just wh...

Does this sound right? "The German DAX suffered 3% losses yesterday (23rd April 2012), - because  France's voters are yet to decide on their next president Spain slips back into recession, even after successful bond auctions in both countries The Dutch government collapses as it cannot find support for its austerity measures." Even in an interconnected world like ours you would expect that the markets displaying the 'cause' (nominated as such by our media) of the sell off would suffer the greatest losses.  Instead, it was the financial market of the strongest economy in Europe, which suffered most. Viewed scantily, investors may dismiss it as the kind of incongruity that so often seems to plague financial markets.  The real reason is more likely that foreign investors are focusing on Germany above all other European economies and then realise that her position is not insulated, let alone divorced of the problems of her neighbours. Germany is slowly waking...

4 Weeks Without Blog Update!   Sorry... I deliberately remained silent on market events during the always tricky Mercury Retrograde phase. After weeks of uncorrelated stock market movements - mostly of little importance, it is only now that we are seeing signs of investor sentiments turning and better evidence of changing prospects   In our ActiveManagement approach, we made changes on March 15 & 16, switching about 50% of equity holdings to safety.  It is was a very selective process as the peak in prices was in large caps mainly, with small and micro caps still on a trajectory for higher highs.  The proceeds of our profit taking exercise were used to buy mostly US bonds, AA+ and better, and globally diversified bonds, which in the past tended to be inversely correlated to stocks. We could have done a bit more: tech stocks continued to rise, and single country funds like Thailand and Philippines.  But the risks would have been much higher and - th...