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Daniel Loh: Bull Still Running, Buy Commodities While You Can
Aspire, Thought Leaders | 09 October 2015
By: Chen Xushuang
Articles (26) Profile

Here are a few recent happenings that would concern investors: the latest US Jobs Report release showing weaker-than-expected payroll expansion, and the surge in gold prices last Friday. Does this mean that the US economy is going to be dragged further and further down by the slowing global economy, and that investors should bet heavily on gold now? We have interviewed local investment coach and US market expert Daniel Loh for his views.

Jobs Growth Is Likely to Get Better in Fourth Quarter

The release of the US Jobs Report on last Friday only reported an addition of 142,000 jobs, which failed to meet the market expectation of 200,000. Allianz SE’s chief economic advisor Mohamed El-Erian called it a “disappointing performance”, and sees that as a further hindrance to the Feds raising interest rates.

Source: www.forbes.com

However, Daniel held a more positive view towards the 142,000 increase, and pointed out that it is a seasonal trend that actual employment figures tend to be lower than what analysts predict in the third quarter. He also said that the trend is likely to reverse in the fourth quarter, citing the reason that the fourth quarter will see the coming of the holiday season (including Thanksgiving Day, Black Friday, Christmas, New Year, etc.), and companies would then start to employ more workers and create more jobs.

Gold is Not Really Safe Anymore, Look at Other Commodities

It is perhaps the delay of the rise in rates that makes non-yielding assets such as gold seem more attractive. In fact, the price of gold has risen sharply last Friday, jumping USD$25 in just 15 minutes at one point. Even though gold is typically considered a safe haven asset, Daniel thinks that it is not really a safe asset anymore, considering that it has already appreciated a lot. As of Sep 11, JP Morgan expected the gold price to average $1,050 in Q4/2015 and $1,040 in 2016.Thus Daniel advises investors to not just look at gold, but other commodities as well, such as crude oil, sugar and silver, which have been looking good for the past few weeks.

“One of the biggest opportunities of 2016 might be commodities,” he added.

Financial Bubble Not Popping Soon, Bull Should Continue

Federal Reserve Vice Chairman Stanley Fischer sees obvious bubbles in the US economy, but he does not foresee immediate risks. He also said that “the housing market is not overheated and borrowing by households and businesses has only begun to pick up after years of decline or very slow growth”.

Similarly, Daniel also thinks that the US economy is not heating up as fast as what many people think.

“A lot of investors are hoping for a collapse in the stock market because they think that the stock market is already high, but they forgot to take into account the liquidity in the market—there is so much cash lying around. With interest rates being so low, money will always go back into the stock market once it corrects,” he said.

Investors’ Takeaway

  1. Keep in mind that employment figures tend to be higher than estimates in the fourth quarter.
  2. Commodities might go into a bull run soon. Look at commodities with a three to four years long-term investment horizon.
  3. The bullish game is not about to stop yet.

Still worried about when and how much would the US Federal Reserve hike interest rates? Do you have burning questions that you want to ask regarding the China economic slowdown and SHCOMP nosedive in June? Are you confused if any of the external factors from other countries in Asia will affect your Singapore stocks portfolio?

Catch renowned investors and speakers with rich experience in the stock markets, who have had witnessed multiple stock market crashes and global recessions over the years at Shares Investment Conference 2015!

Speaker profiles

1. Dr Chan Yan Chong, a renowned investor with more than 25 years of experience and the MBA programme director & associate professor of business school at the City University of Hong Kong.

2. Kevin Gin (CFA), the Founder and Principal of Alpha Capital. He was the former COO for CITIC Securities, Head of Singapore and Regional Real Estate Research for Kleinwort Benson Securities Asia (now part of Credit Suisse) and Head of Greater China Property Research with Yuanta Securities (Hong Kong)

3. Louis Wong, one of the most experienced fund managers in Hong Kong. He has over 25-years of solid experience and track record in the financial market. He was awarded Best Financial Analyst for 3 years by the Putonghua Channel of Radio Television Hong Kong and is also a part-time instructor of several investment courses in various Hong Kong universities.

4. Daniel Loh, an investment coach that specialises in equities and derivatives trading, he appears regularly on local TV financial programmes like “Good morning Singapore” and “Hello Singapore”.

As a Communications Studies graduate specialising in journalism, Xushuang is keen to observe and explore issues that readers want to know more about, and to deliver quality content through engaging writing.

Please click here for more information about this author.


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