But it was not to be, the market rallied to a second dip in end Jun, early July. Now pundit wasn’t so sure. Is it the end of the rally or more is to come?

Well, the market never look back since then, ending 2009 in a high note.

I hope you had a profitable 2009 and another ahead in 2010.

Happy New Year!

Take a look at this long term chart:

The continuous long term up trend is easy to see. Despite some major interruptions the buy and hold strategy offered excellent rewards over the years. (If one had brought during the peak of 1930, it would have taken over 25 years to recover the initial capital),

How about the Singapore market? Take a look at the Strait Times Index (STI).

Hardly any headway over the last 20 years. Notice that the DJIA is also flat over the 1960s to 1980s.

Can we use the past to predict the future?

Bare in mind that the component of the all index changes over time. A company that existed in one period may crease to exist in another. However the purpose of an index is to capture a fair view of the stock market performance.

Many believe that the long term is getting shorter and shorter – a result of technology, faster information and global market interaction.

Market timing, often discounted by academics and fundamentalist is increasing important. While the long term may be flat, there are shorter periods that present substantial gain. Knowledge and tools such as technical analysis are gaining an edge over time (in investing long term).

I had been holding my unit trust funds and watching the current correction.

Originally my plan was to hold and wait out the correction. However, there are new signs to indicate that the current correct will be deeper than anticipated. In view of this, I’m switching strategy.

Most of my unit trust are invested with CPF monies. While some school of thoughts believe that dollar cost averaging is the best strategy, it is not for me.

Active management is my preferred strategy and I believe it is best for my situation. The point is not to catch the maximum (if I had taken action a month back) but to lock in profit.

It is painful to see the gain shrank. But it will be more painful if I had to cut at a lost later. I am selling my Asia, Japan, Korea, Thailand funds.

The question is, “Is there a cause for worries?”

Nowaday I hardly look at the market. With my business going on and my online projects, I’m thankful if I get to look at the charts and read the news on weekend.

Let’s take a quick look at the market. In my next post, you will see the STI charts and have a clearer picture.

The Singapore market (and generally many other markets worldwide) had been enjoying a sustained rally for the past 3 years. Conventional wisdom tells us that what goes up will come down, in what is known as correction.

So is the current correction a typical one or a sign of things to come?

The correction this time round almost wipe out all the gain STI had made in 2006. However, from a long term view, this correction is not significant.

From a technical perspective, there is still no formation of significant chart signs to tell us otherwise.

From a fundamental perspective, a little cooling down is good for the market. The threat of a global meltdown, while real should not be taken as doomsday story.

Day or short term traders might have suffer losses but long term investors, unit trust investors should hold. If you are active and savvy, this is a good time to buy and adjust your portfolio.

As for me, I’m holding and watching.

Good luck!