Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Sunday, 28 December 2014

2015 will be a Great Investment Year

2015 will be a great investment year for everyone - if we buy the right investment.
Historically over the last 70 years, the third year of all US presidents have been the most positive year in the US stock market.

Photo from Kenneth L. Fisher's Market Never Forget, Chapter 7 - Poli-Ticking

Above is a photo shot I had taken from "Markets Never Forget", listing the stock market's (S&P500) historical returns since President John Calvin Coolidge, Jr . 

Since 1943, the 3rd year of all presidents have ended positive; that's 71 years worth of historical data and trend.

Well, you may ask, it is the US market that will be good, how does it benefit investors residing outside of US?

The surprising part is, the US stock market is actually positively correlated to most of the other countries' stock market, and the correlation has only been more positive instead of less. Thus it can be safely deduce that next year will be a good year for most global investments.

Photo from Kenneth L. Fisher's Market Never Forget, Chapter 8 - It's (Always Been) a Global World, After All

The above image is a shot I took from Ken Fisher's book. It shows the price correlation between S&P500 (US Market) and of MSCI EAFE Global Index (Global Markets). As can be seen, other than a few instances, most of the movements are positively correlated, except for the different percentage changes in price.

I think the best books that I have read that talks about all these economic/financial history and correlations comes from Ken Fisher's books - Debunkery & Market Never Forgets.
Ken Fisher (Kenneth L. Fisher) is the son of Philip Fisher (the author of the famous investment book - Common Stock & Uncommon Profit). He has been a Forbes columnist for more than 20 years and manages his fund (Fisher Investments) for an even longer period.

Ken Fisher's 2 books are both written in short chapters with plenty of historical economic data and charts that help investors see clearer the investment world. Eg: Bonds are safer than stocks but only to a certain period.

Both books are good reads to both new and seasoned investors.
I believe they are both available in public libraries.
Do read on them and improve your investment prowess! :D


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