Opportunities and Caution for the New Year

We are well into the year 2017 and only a few days away from the next Chinese New Year. What does 2017 have in store for Malaysia and the United States?

 

2017 Expectations

Malaysia

  • Bank Negara Malaysia (BNM) to hold Overnight Policy Rate (OPR) at 3% unchanged throughout 2017.
  • MYR to rise slightly before further declining vs USD.
  • Growth positive but at a slow rate.
  • Inflation expected to rise slightly to 2.7%.
  • Property prices to be on a slow rise.
  • Bursa Malaysia to be neutral-slightly bullish at best.

United States

  • US Feds rate hike 3x in 2017 by ~25 basis points (0.25%) each time.
  • USD to decline slightly before heading upwards.
  • Growth positive and healthy with caution of overheating.
  • Inflation expected to increase to 1.9%.
  • Property prices to be on the rise.
  • US stock markets at all-time high to continue to be bullish short-medium term until a significant correction occurs.

Global: Overall positive economic outlook.

 

Expected Impact

US Stock Market

  • US market, although at all-time high, to continue bullish momentum forward in the short-medium term.
  • Gainers:
    • Technology Stocks
      [stockdio-historical-chart width=”100%” height=”350px” symbol=”XLK” displayPrices=”Candlestick” performance=”true” allowPeriodChange=”true”]
    • Financial Stocks
      [stockdio-historical-chart width=”100%” height=”350px” symbol=”XLF” displayPrices=”Candlestick” performance=”true” allowPeriodChange=”true”]
    • Industrial Stocks
      [stockdio-historical-chart width=”100%” height=”350px” symbol=”XLI” displayPrices=”Candlestick” performance=”true” allowPeriodChange=”true”]
    • Consumer Discretionary Stocks
      [stockdio-historical-chart width=”100%” height=”350px” symbol=”XLY” displayPrices=”Candlestick” performance=”true” allowPeriodChange=”true”]
    • Energy Stocks
      [stockdio-historical-chart width=”100%” height=”350px” symbol=”XLE” displayPrices=”Candlestick” performance=”true” allowPeriodChange=”true”]
  • Expected major market correction in between 9 months – 30 months (2.5 years) time frame.
  • Investment Plan:
    • Short term investors: Ride bullish market upwards. Be prepared to exit and swiftly when market turns bearish.
    • Medium-Long term investors: May be challenging but definitely not impossible to find good buy opportunities. To decide depending on your objectives and cashflow whether to exit when market turns bearish or stay calm, hold on, and even increase your position.

Bursa Malaysia

  • Bursa Malaysia at fair price with growth opportunities in some stocks.
  • Gainers:
    • Technology Stocks
    • Financial Stocks
    • Construction Stocks
    • Export Stocks
    • Highway Stocks
  • Expected to follow US market correction in varying degrees.
  • Investment Plan: Similar to US Stocks above

Gold (and commodities)

[stockdio-historical-chart width=”100%” height=”350px” symbol=”GLD” displayPrices=”Candlestick” performance=”true” allowPeriodChange=”true”]

  • Expecting gold to turn bearish and dip this year if USD rises due to gold’s inverse relation to USD and the expected rate hikes. However, should a crisis occur in certain countries, both USD and gold may both move upwards.
  • From an investment returns perspective, may want to reduce your gold position. Unless you are holding gold as a worst-case-scenario-global-collapse safety measure.

Malaysian Property

  • A slow increase in home buyers looking for properties for own stay as opposed to speculators.
  • Demand driven by:-
    • High rise residential properties below RM500,000 for new home owners.
    • Landed properties between RM800,000 – RM1,200,000 as existing home owners look for upgrade.
    • Commercial properties that are in prime areas that are reasonably priced.

 

More Info

 

MyPF wishes all readers celebrating a happy and prosperous Chinese New Year! Gong Xi Fa Cai!

 

What are your hopes and expectations for the year 2017?

 

Note: For educational and information sharing purposes only. Not a recommendation to buy/sell.

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