Should One Stay Invested?

Published on Business Times: CIMB-Principal: Stay invested

• Malaysian investors should take a long-term view of between three and five years and take advantage of the current cheap valuations, says CIMB-Principal CEO
  
  THE global financial crisis may have wiped out trillion dollars worth of assets, but this should not deter local investors from investing in the stock market, said CIMB-Principal Asset Management Bhd chief executive officer Datuk Noripah Kamso.
  
  She said investors should take a long-term view of between three and five years and take advantage of the current cheap valuations.
  
  "And when they invest, they must do so through a regular savings plan and do not invest in one lump sum," she said at a media briefing on how to invest in difficult markets in Kuala Lumpur yesterday.
  
  "Stay invested and do not try to time the market," she said, adding that the global recession will pass and market will rebound.

I do not agree too much with what's being said.

At this moment of time, given the business economics of the world, shouldn't the investor have evaluated what he or she has invested in?

Yes?

And what about the stocks purchased?

Are they really good? Or are they what we thought was good?

Well.. if one bought a rotten stock, holding it for another 5 years or even 10 years, the chances are very much that the rotten stock will remain rotten. Yes?

I would also like to repeat the following comments I made the other day. (see To Be Correct! )

• Yes, isn't this what we are seeing in most investors?
  
  The clear and precise changes in the business economics could been seen for so long already.
  
  Yet many chose to be stubborn and delusional and they simply refused to accept the changes. Instead they held on strongly to the believe of long term investing.
  
  Now do not get me wrong, I am a staunch believer of long term investing too. There is absolutely nothing wrong with the investing theories. However, has one questioned about the application of the theory itself? For example, I am realistic about the LIMITATIONS in our market and I am also aware of the lack of the long term COMPETITIVE ADVANTAGE for most of our local business itself and I am also aware of the rather STRONGER CYCLICAL nature of our local business earnings.
  
  How?
  
  Just buy and hold, in regardless?
  
  I would if the company we are talking about is if the same exact quality as a Coke!
  
  And for sure, there is always a strong chance that tomorrow will always be a better day. Crisis like boom times, they come and they go. One day, the present crisis WILL pass us by and it's simply paramount that we are there to profit from it!
  
  Oh yeah the truth does hurt so bad, doesn't it?