We have to get used to the words like tumbles, plunges, slumps etc. These are the words appearing on financial news very often lately.
Again, the overnight Dow Jones closed down sharply. DJIA ended at 16151.41, falls 364.81, equivalent to 2.21 percent.
There is no escape for the Asia Pacific markets. The market was in deep red sea in the morning, except Shanghai market closed in positive, the rest of the Asia Pacific market closed in red.
In Hong Kong, Hang Seng Index broke year low again. The cash market closed down at 19817.41 (-117.47) at the end the day while January futures contract ended at 19810 (-249); losses narrowed after short covering during second half of the trading session. Range of the day for January futures contract was ranged between 19468-19893 (425).
In Malaysia, FBM KLCI Index dropped 9.10, ended at 1633.44 for cash market and futures, closed down 15 points at 1630.00. Futures market traded between 1624.50-1636.00 (11.50).
It is a tough start for the year and we think there is going to be a wealth shuffle in the year of 2016. There is a risk in certain business closure and retrenchment. Having said that, whatever goes up will come down, whatever comes down will go up. We wouldn't be surprised to see a new trend or market rise up.
With the way market falls, we are not far away from the bear market. But who knows where is the trough. While it is hard to predict where is the dip and when it is over, we think it's best to hold cash and spend wisely. When we see the big title of "bear is here" in the headlines, or people around you are not interested in the stock market, that is the hint we should start buying.
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