Lots of so-called "expert investors" have delayed their investments in Bursa lately because of concern over:

OBSERVATIONS

(a) the CI stocks is trading above historical average and toppish, difficult to go higher and also higher than the regions;

(b) look at the penny stocks is in the most active list for past few months, an indicator market is going to collapse when the retailers and syndicates are in the market

Although this is a very "general" observation, but there is truth behind these concerns or worries.  It can be supported by facts for the said observation,

FACTS

(a) the CI stock index is trading at PE 17-18x, far higher than the region and also higher than its historical average of 15x.

(b) penny stocks, is in the limelight, just take a look at the top 10 or 20 stocks that has the highest volume for the past weeks.

(c) small capital stocks index has went up to par with the CI stocks, from the average PE of say 6-8x to the current 15-16x.  Historically, small cap index stocks traded at huge discounts (30% or more) to the Blue Chip Index.  Now it is at par.

DECISION MADE BY MOST INVESTORS

So, the conclusion, as made by many expert investors is to STOP investing for the moment and wait for the market to FALL, then only start buying.  In effect, they are trying to TIME the market.  You will be called "not smart" to enter the market when it is on the HIGH!

WHY the DECISION made by MOST INVESTORS are INCORRECT?

You will need to answer this question below honestly, before that, lets look at what Warren Buffett said:

"Investor should buy into WONDERFUL COMPANIES when the price is FAIR and not buy into FAIR COMPANIES when the price is WONDERFUL".  

Warren Buffetf (like him or dislike him) made his fortune or BUILD WEALTH by acquiring WONDERFUL COMPANIES at fair price over a period of time.  He think that market timing will not yield him any benefit, here is why

1.  Does anyone know when the market is LOWEST? Even experts can't tell.

2.  If you know the market at its LOWEST, do you put in ALL your hard earn savings/money into the stocks ONE OFF?  Normally those who waited for market to drop, never invest much, because in their mind, they think it will drop more.  Some are not ready to have sufficient savings to invest.

3.  Even if you have the MONEY, do you at the time when all bad news on TV, Radio, Internet and Papers, do you have the COURAGE to invest substantially?

4. Even you have the COURAGE, do you have the SKILLS to select WONDERFUL COMPANIES?  

5. Even you have the SKILLS, do you have the PATIENCE? Would you have sold it after making say 50% when it recover in a year or two?

THE MYTHS vs FACTS

Most of the investor thought investing at the market at its LOWEST is the most correct and can BUILD their WEALTH.  Actually, there is nothing wrong with this statement.  Buy low sell high!  But, the actual ACTIONS take by majority investors is, even the market at lowest, they do not have the COURAGE to invest.

One of the reason besides COURAGE, he is not ready, he did not do his research on how to find WONDERFUL COMPANIES.  He may end up selecting FAIR COMPANIES instead.

When market did crash (say drop 30-60% gradually), definitely the fear factors will sink into their COURAGE, after say they bought at 30% discount and market continue to fall to 60% discount from its high.  He or she may PANIC, and when the market recover and he or she make say 20-50%, he or she will sell all the shares, thinking that he or she has made a killing.  THIS IS A FACT.

Actually, the proven strategy of BUILDING WEALTH is to periodically invest in WONDERFUL COMPANIES over a long period of time, one, you can solve the problem of TIMING the market, two and more importantly, you can BUILD YOUR WEALTH over a long period of  time.

It is far better than just able to time the market, and only invest a small sum, say RM20k and make 100% (gain of RM20k), instead of investing RM200k over a period of 10 years and make say about 50% (Gain of RM100k).

THE SOLUTION

There are some proven facts you can find in the slides attached (WEALTH BUILDER 2014).

www.sosfinancialplanning.blogspot.com

There are actually many strategies one can take.  BUT, what if your savings is not adequate, actually one can use their EPF to construct their own portfolio.  Many are not aware of this opportunity. Act now.