We have the wind at our backs

Dear Fellow Investor,

As a fund manager, we are  very much focused on individual stocks. We expend a great deal of effort to carefully analyse the business behind a stock to find stocks that we believe have a high chance of experiencing material business growth over the long-term. And of course, we also pay attention to valuations to ensure that we are not overpaying for growth.

We don’t know when the market will fall. What we do know is that investors who focus on investing in growing businesses at reasonable prices will have a great chance of coming out ahead over the long term. 

Sure, The Straits Times Index, the KLSE and the Hang Seng  look to be at a high level now. But there are three important things to note in such situations:

We must study valuations and not focus merely on the price. And fortunately, the market’s valuations are not anywhere close to being crazy expensive right now. That’s good news for long-term oriented investors like you.

It’s incredibly tough to call a market top and bear markets have happened even when valuations are low. But, the stock market has still done fine over the long-term. This highlights the need to have a long term investing time frame. 

The best returns come over the long-term. If a business can continue to do well, then there’s more room for the stock’s price to rise. We are optimistic about the long-term futures of the businesses of the stocks I have placed in your accounts.

We have the wind at our backs. Major central banks are focused on growth and not austerity. Interest rates remain low and besides equities there is not much on offer to give us a reasonable return.

Invest well and grow your wealth,

Bill

A pygmy elephant . The Lok Kawi Wildlife park in Sabah has a collection of exotic animals including sun bears and pygmy elephants. The park is about a half hour drive from Kota Kinabulu