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BACK TO HARD WORK AND EFFICIENCY IN THE YEAR OF THE FIRE ROOSTER 2017

By Gabriel Yap

BACK TO HARD WORK AND EFFICIENCY IN THE YEAR OF THE FIRE ROOSTER 2017

Exhausted from the shenanigans in the past Monkey year 2016, in the new lunar year beginning 28th Jan 2017, we welcome the Year of the Fire Rooster. The Rooster is the sign of awakening and dawn – it would mark a new orientation towards success – one garnered by hardwork and patience which are key rooster traits, rather than relying on what markets, be it currencies, commodities, stocks or bond cycles bring forth.

The rooster is the 10th sign in the zodiac calender – the rooster is very down-to-earth who is hardworking, efficient, dedicated, honest and brings artistic talent to the task at hand. Roosters represent fidelity, reliability and punctuality as they wake people up on time.

The last time a Fire Rooster appeared was in 1957. Then, the rooster came from the heavenly branch of the Ding You. Red roosters in 2017 are of the Earth element, comes from the heavenly branch of You and Negative in polarity. The lucky colors would be Gold, Brown and Yellow while the lucky numbers would be 8, 7 and 5.

Good riddance the mischievous monkey year that will pass – things would definitely be very different. So how will investments pan out in the Year of the Fire Rooster?

Chinese astrology is based on the yin-yang 5 elements of wood, fire, water, earth and metal. Combined with each of the 12 animals, every birth chart will have its own 5 element weights which is the basis of prediction of one’s fortune, marriage, health and life.

The monkey swings between dare-and-dare you and is a naughty animal. The monkey contains a high element of Metal and Water. The latter character is connotes a high element of wisdom and danger with relentless challenges. Not surprisingly, the stockmarkets was particularly volatile in 2016, underpinned from 2 black swan events – Brexit and the election of Donald Trump as the US President.

Do not expect the Year of the Rooster to be easy for investments. You need to work hard, be trust worthy and reliable to do well in the lunar year 2017. Do expect world events impacting stock markets and investments to take shape in a consistent manner shaped by the hardworking Rooster.

My predictions in the Year of the Monkey 2016 (www.einvesthub.btinvest.com.sg/outsmartingtheredmonkeyintheyearofthemonkey2016) has turned out to be almost prescient. I had predicted that –

For the Year of the Rooster, I would be cognizant of a few investment trends –

1. Expect markets to be volatile in 1H2017

The widely expected Federal Reserve interest rate increase after 7 years of zero interest rates finally kick-in on 16th Dec 2015. We then saw another interest rate increase only on 15th Dec 2016, almost a year later.

In the last Federal Reserve meeting, the guidance was for 3 rate increases for 2017, which caused massive sell-offs in the bonds markets. In Singapore, SREITS suffered their 3rd worst drubbing (www.einvesthub.btinvest.com.sg/sreitsgetapoundingbytrump) in November 2016.

The uncertainty going forward into 2017 would now centre on how fast interest rates will increase at each Fed meeting, will we indeed get 3 interest rates increases, what shape the yield curve would take and would be the ultimate absolute increase at the end of the cycle.

2. Resourcefulness in finding winning stocks and instruments will underpin the Big winners

The Rooster is the strutting peacock of the Chinese Zodiac. For investors and traders to thrive, one must exhibit the Rooster traits of quick-thinking, resourcefulness and practical to the task-at-hand. Like the rooster, one must be a good observer and have a keen attention to details in evaluating investments. The rooster is considered a whiz at anything requiring close analysis.

Roosters aren’t shifty or cagey and have no interest in hiding behind a façade. They are the proverbial open book, telling the truth and keeping their words.

A smart investor can only do that if he or she understands the industry dynamics of the companies he/she is invested into. A firm grasp of companies’ balance sheet and operating cashflow are crucial.

3. Events can unfold quickly

Previous Rooster Years in 1981, 1993 and 2005 would have given very mixed reviews of what beholds for Rooster year 2017.

In the summer of June 1981, the Fed cut interest rates and the S&P 500 was at 133.49 on the 1st Date of the Fed cut. The S&P 500 subsequently fell 17.88% to 109.62 1 year after the 1st Fed Cut. For 2017, investors and traders are looking at Fed interest rates increases instead. Perhaps, the stocks indices may surprise and end up higher, a complete reversal of 1981? (I fall into the camp that thinks that the Fed Reserve has once again over estimated the no. of interest rate increases for 2017 – recall in 2015 that the guidance was for 4 rate increases in 2016, and the reality was only 1 rate hike).

Happy New Year.

Gabriel Yap
Gabriel Yap

Mr Gabriel Yap was an eminent stockbroker and investment banker who retired in 2009 to devote himself to philanthrophy. He is well-known as the Investment Guru, having being regularly interviewed in the news media like Channel News Asia, Bloomberg TV, CNBC, Mediacorp Radio. Together with the famous Fortune Times, Mr Yap hosted the inaugural Asian REITS Awards 2016 in Singapore. Mr Yap was both Chairman of The Future of REITS Forum as well as Chairman of the Fortune Times Asian REITS Awards 2016 Judging Committee comprising of the leading CEOs, deal makers and who’s who in the Asian REIT sector.

Mr Gabriel Yap has lectured for almost 30 years – He has lectured at the famous Asian Development Bank, Monetary Authority of Singapore, Institute of Banking & Finance, SGX, ASME, SIAS and Share Investors. He has also trained the Top Producers at major insurance companies and banks. He has also trained students for the grueling CFA course and has lectured and delivered academic papers internationally.

Mr Gabriel Yap has also sat in the EXCO of the 13th Association of Small & Medium Enterprises, ASME. Mr Yap has also served in the EXCO of SIAS.