Woody Allen said that 70 per cent of life is just showing up. The same applies to investing in stocks. "Bears" waiting for the STI to plunge to 1200 and below are still in denial saying that it is just a suckers' rally. What should a retail investor do?
As mentioned before, buy on dips with money that you do not need for the next 5 years. If the world financial system were to collapse, life must still go on. People must still buy stuff.
There is the concern that the market is close to being fully valued and will trade in tight bands as it awaits or real signs of recovery. Heck! In Singapore, people are back to lining up for condo launches as if the worst was over?
What should you buy? I can't tell you explicitly as it is dependent on how you want to construct you portfolio. If you want something for 5 years out, put 50% money on the highest yielding stocks with market cap greater $1billion. Singpost and SMRT are not high yielding but their dividend consistency is something to look out for.
A small bet can be placed on Genting Singapore. This will be another one for at least 5 years. Remember, it makes money from both its Singapore operations and UK casinos, of which the latter has been under performing.
Lastly, small caps like FJ Benjamin can be considered to ride the economic recovery wave that is waiting to be unleashed in the shortest time of 6 months.
Good portfolio construction comes with good stock picking.