Friday, July 18, 2008

Malaysia Mega Sales is Back

Sharing a thought...

I was in town yesterday and noted that the Mega Sales is back from 5 July - 1 Sept 2008!

Lots of discount were in the offering from 10% - 70%! As it was a working hour day, the crowd was .....ok. I used to remember many years ago whenever there's a sales, the traffic would be bad and the queue to the changing room was long......! I've even heard of people using their annual leaves to take advantage of the huge discount. Is it the same now?

People are willing to queue either in the changing room or at the cashier to take advantage of the huge discounts being offered. Or be in the tight crowd, jostling in their attempt to look for items on sales. Their purchases could be huge and some of the items bought could either be used immediately, kept for future use, to give away or a just-in-case purchase.

This scenario is somehow missing whenever there's huge sales in the equity market. Currently it is also having Mega Sales but investors are dumping their shares (making losses) and prefer to be on the sideline, watching for any signs of recovery. Buy when prices going upwards?

Many investors that I've met bemoaned that they are making losses but in actual fact they are currently facing paper loss and not real loss unless they have sold off their shares/funds. It is funny, as the same is true when the equity market was good. Investors were pleased when the equity market was doing well and they assumed that they were making money and were ever more than willing to invest more even when the price was high! In actual fact, no real profit is being made unless the investors sell off their investment and pocketed their money! It is just a paper profit if nothing is being done!

The two situations are similar but somehow they have portrayed human's love for immediate gratfication through spending and lacks patience and the wisdom to take the necessary risk to await for greater profit.

If investors were to adopt the same attitude when they shop to how they invest, I am sure they would note that the current equity market is their goldmine.

With long term strategy in mind, wise investors would right now select quality low priced shares and keep them. For those who are unsure which shares to collect/buy, appoint a reputable mutual fund company to manage your investments. Let the fund managers do the shopping for you.

As all of us are unsure for how long the market will be this cheap or getting cheaper, the only practical strategy is to pick the shares / buy the funds in a gradual manner (bits by bits) in order to take advantage of the dollar cost average benefit in the event the prices continue to head south. Furthermore, based on history, anything that goes down will eventually goes up. Therefore, for long term investor, there is never a better time but now to invest when prices are heading south whilst waiting for the market to correct itself, which it normally does.

So what are you waiting for, jom, shopping!

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