I quite agree with what Dennis Ng wrote for Sunday Times yesterday.
“… estimate at which stage of the market cycle we are in… identify the major trend direction… position ourselves accordingly…”
What he’s saying is to estimate the market upturn and buy. He then gave an example: DBS hovered between $8 and $10 for over a year in 2003-2004, and then shot up to $20-$25 in 2007-2008.
Dennis did not explain clearly how to “identify the major trend direction.” There are also doubters and sceptics of his market cycle investing strategy (see discussion in WallStraits where Dennis is an active forummer).
The main criticism is that it’s always hard to time the market – by the time the trend directions are clear, it is almost always too late.
Did I say I “quite agree”?
I would keep it even simpler. As I said previously, just buy during a recession (like now), and sell when the market becomes hot again. But before buying, make sure you have enough savings for emergencies.
How do you know when market is hot again? Easy – you’ll see STI setting record highs, good corporate news almost everyday in the newspapers, students and housewives start dabbling into shares, and our political leaders saying “more good years” or something along that line. 🙂