For investors who felt that the China markets offered compelling value and bought into the China tech stocks but are still facing paper losses, there are very differing sentiments on the ground now. While there are investors who acknowledge that this might be a long term play, some others were expecting it to recover within a few weeks or a few months.
If you are part of those who are getting frustrated by the slow recovery, ask yourself this question. Is the root of your current frustrations a result of Mr Xi or is it because you may have unrealistic expectations of the way the stock market should work and are seeking instant gratification?
Whether it is US, China or Singapore stocks, a fundamentally sound stock that is plagued by negative sentiment can remain underpriced for several quarters or sometimes years. If investors continue to have such expectations, they will continue to remain disappointed with many other good stocks from other countries as well. In the US, look at what happened to Mastercard and Facebook and back home in Singapore, some of the strong REITs such as Mapletree Commercial Trust and Ascendas REIT. Just because a good stock doesn’t have a really good year doesn’t necessarily mean that its fundamentals have changed and that you should be worried.
There are some investors who would love to do stock picking themselves in search of higher returns. But when faced with the higher volatility and underperformance, they may be in for a rude awakening. Perhaps they may be more suited to just stick to investing in an ETF instead.
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Nice insights. Chanced upon your article only now in February. But I guess it's never too late to learn.
Thanks! Yeah learning never stops. 🔥