How to ride out market cycles in 2019

How to ride out market cycles in 2019  - by Teng Chee Wai @ 15.1.2019

1. Best asset class in 2018 - cash 1.8%.

2. Strategists don't like China. They like India.

3. Economic cycle showing signs of maturing. 115 months of expansion globally.

4. Probability of recession is 15% now. Market expectations for next recession is pushed to 2020.

5. Trade war and prolonged government shutdown in US.

6. Shrinking global liquidity by central banks. 2019 marks start of next liquidity withdrawal by central banks.

7. Interest rate cycle is nearing tail end. Market expect zero interest rate hike.

8. Expert Fad to pause and USD to peak in 2019.

9. Valuation is cheaper. Price to book for Asia ex-Japan at 1.5x.

10. Negative market sentiment - indicates buying.

11. China - easing cycle is unfolding. Wait for Q2 economic data. Pump priming started in July 2018.

12. Malaysia - KLCI down 3% but FBM Midcap down 16.2%.

13. Downside risk is earnings. Q2 earnings growth is 0.

14. Keep faith in Malaysia Baru.

15. Action plan for 2019 - uncertain fundamentals; attractive valuations and favourable positioning.
Focus on quality and liquidity.