Tuesday, 16 January 2018

IME's Market Prediction and Investment Opportunities for 2018 : What and Where to Invest??

A year ago, we published our first ever Invest Made Easy Market Prediction and Investment Opportunities for 2017. In that post, we looked at the following factors:
  1. Predicted Health of the World Biggest Equity/Stock Market 
  2. Current Economic, Market and Investor Sentiment towards the World's Largest Economy
  3. Market Outlook for 2017 based on What the Experts Say
  4. Market Opportunities based on "The Guided Investor's - Country Indicator"
Using Item 1 and 2, we concluded that the overall market will be bullish for 2017. After which we zoomed into the areas and countries which are attractive to invest into. Item 3 tells us which market is attractive to invest into for the next one year. Item 4 on the other hand serves as an active investment whereby the entry and exit point of an investment is based on the country attractiveness indicators provided by The Guided Investor.

All in all, our 2017 Market Prediction and Investment Opportunities for 2017 were spot especially for Item 3 whereby picks on Japan, Emerging Market and Europe returned 22.6%, 30.6% and 23.4% respectively!

Total Returns for 2017 (as of 6 Dec 2017)
Our investment portfolio however did not do too well and you can read the review HERE.

Moving forward, let us take a similar approach for 2018 and this is what our prediction and opportunities for 2018!

Criteria to Check Before Investing in 2018
1) Predicted Health of the World Biggest Equity/Stock Market 
For this particular prediction, we take a look at the potential growth forecast of the US Stock Market (S&P 500) by 14 Major Banks.

S&P 500 prediction for 2018 by 14 Major Banks
Referring to the table above, we can see that the S&P 500 has a predicted median of +5.66% in term of returns. Two banks a predicting double digit returns from the S&P 500 in 2018 and only one bank predicts that the S&P 500 will fare badly. All in all, the general outlook for the world's biggest equity market (S&P 500) looks to be fairly bullish.

2) Current Economic, Market and Investor Sentiment towards the World's Largest Economy
Item 2 requires us to monitor changes to key indicators of the world's largest economy (United States) on a monthly basis. Our indicators are broken into 3 key items and 9 sub-items consisting of the following:

1. Stock Market Indicator
  • Shiller Cape
  • S&P 500 12 Month Trailing PE
  • S&P 500 EPS
2. Investor Sentiment Indicator
  • Volatility Index Indicator
  • NYSE Breadth Indicator
  • American Association of Individual Investors (AAII) Sentiment Survey
3. Economic Indicator
  • Manufacturing PMI
  • Services PMI
  • Unemployment Rate
Fortunately, we are can refer to the latest data of all 9 indicators via our "Global Equity Market Health" from The Guided Investor

Status of 9 key indicators as of 15 January 2018:
Referring to the 9 key indicators as of 15 January 2018, 6 of the key indicators are still bullish versus 3 bearish. For that we are maintaining a bullish status for the month of January 2018. 

Market Outlook for 2018
3) What the Experts Say?
Now that we have verified that the overall market outlook (Item 1 and 2 above) is bullish, we will now look into the expert predictions of potential markets to invest into for 2018. Our approach for this is to obtain 2018 predictions and recommendation from the top investment/financial institutions. Shown below is the compiled recommendations of these top institutions:

2018 predictions and recommendation from the top investment/financial institutions
Based on the above predictions, we see that Emerging Market specifically India, Brazil and China are the most attractive market to invest into for 2018. We were rather surprised to find that majority of the top investment/financial institutions picked Emerging Markets as the investment theme for 2018 and we too shall stick with these countries when selecting funds for our 2018 Unit Trust portfolio.

4) What our Country Indicators Say?
Item 4 use data from The Guided Investor to determine which country is attractive to invest into on a month to month basis. 
Attractiveness to Invest as of 15 Jan 2018
Referring the January 2018 data from The Guided Investor, we see that China, India, Australia, Germany, UK, Brazil and Hong Kong as the most attractive to invest into. Similar to Item 3, these country indicators will determine the funds that we pick as part of our 2018 Unit Trust portfolio.

Summary
Now let's summarize the market prediction and investment opportunities for 2018:
  1. Health of the World Biggest Equity/Stock Market for 2018 remains BULLISH
  2. Current Economic, Market and Investor Sentiment towards the World's Largest Economy remains BULLISH
  3. Market Outlook for 2018 based on What the Experts Say indicate that EMERGING MARKETS (India, Brazil and China) are the MOST ATTRACTIVE to invest into Long Term
  4. Market Opportunities based on "The Guided Investor's - Country Indicator" indicate that EMERGING MARKET (India, Brazil and China), AUSTRALIA, GERMANY, UK and HONG KONG are the MOST ATTRACTIVE to invest into Short Term
Now that we know where are the most attractive markets to invest into for 2018, an independent investor should be able to construct their own Unit Trust investment portfolio. If you have no idea on how to construct your own portfolio, stay tune to our next blog post whereby we will share our recommended Unit Trust Portfolio for 2018!

Cheers and Happy Investing!

P.S:
  • Find out how you can use eUnittrust to managed your own unit trust investment! Just click HERE
  • I've recently launched an online learning platform called Unit Trust Made Easy to help Malaysians to kick start their own unit trust investment. For further details, check it out HERE

Thursday, 28 December 2017

Maybank acquires Amanah Mutual Berhad (AMB) for RM16million

Maybank recently announced that they have purchased Amanah Mutual Berhad (AMB) for RM16.12 million from Permodalan Nasional Berhad (PNB).

With the acquisition, all of AMB's unit trust fund will now be under the offerings of Maybank.

Currently AMB has 30 funds under their management and a strong record under the Bond category. This was recognized when AMB's AMB Income Trust Fund won the Best Bond Malaysia Ringgit (3 & 5 Years Category) at The Edge-Thomson Reuters Lipper Fund Awards Malaysia for the 3rd year in a row.

As an investor, I have also personally witnessed the glory days of AMB's equity fund in 2013 whereby funds like AMB Dividend Trust Fund and AMB Value Trust Fund were the top performers under the equity category.

Moving forward, will we see a resurgence in the performance of their equity funds when it goes under Maybank? Will there be changes to the current fund managers? What will the significant changes made to investment strategy of the funds?

At Invest Made Easy, we will continue to track and monitor the latest changes to these funds. Do stay tune to our blog and don't forget to follow our Facebook page too!

Cheers and Happy Investing!