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When is the good time to buy, be it equities or properties?

July 23rd, 2009

When is the good time to buy?

A property cycle lasts 4 to 7 years,  likewise equities. You can enjoy rental and capital appreciation if your investment is in real estate.  Whilst for equities, you enjoy dividend and capital appreciation too.

Acquiring at the right price, right time, an appreciation of 20%  to 40% in value is achievable over a cylcle for real estate.

Appreciation on equities can be a couple of 10 to 15% over the year depending on your skill, discipline to take profit and cut loss and whether you have mastered to feel the pulse of the market just like your own heartbeat and listen to it ardenty in order to prescribe the right dosage to “lao sai” or “进补”.

Location, location, location is the mantra of those looking to invest in property. But what are the factors that make a good location?

For rental yield, proximity to International Schools, Marina Bay Sands, CBD, connectivity by MRT and road.

What about equities?  What factors constitute a good buy?  Fundamentally, the Company must be healthy and growing. Capitalization and Volatiliy are the deciding factors to ‘play’ it.  Good stock or bad stock, as long as it helps you to make money during bull or bear,  it’s a good stock.  ‘黑股’,’白股’,只 要 会 赚 钱 就  是 好 股.

For property owners, maintaining a debt service ratio of 20 to 30% of your income will be ideal as it allows some buffer for any rise in mortgage rates or any hiccup in your financial situation.

For equity players, phase in your investment capital. Likewise, collect your return in phases too.

Ensure that one does not overpay whether in real estate or equities. Get a bank valuation on the property before committing to avoid overpaying.   Use TA chart to assist you to make the  “correct” buy.

In some instances, just waiting a few months can mean saving tens of thousands of dollars.  However, the reverse is also true, one may end up paying more if the market suddenly turns up. It’s never easy trying to catch the bottom or ‘throw” at top of the market.

Property trading needs patience and skills.  Equity traders lagi need patience and skills to ride the up and down of the market’s roller coaster.

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Those who can trade , trade.
Those who can’t trade , teach.

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1. Properties, Daily Journal, Smart Money

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