2008 stock market prediction

Everyone loves prediction. We like feng shui, horoscope and fortune teller. Yet in investment world, no guru really can forecast what would happen one year down the road, not even a week. Having said that, as we are going into 2008 pretty soon, I would like to “predict” what the next year would be.

2007 was a good year, if not for the sub prime problem to spoil the party. Everyone was earning big bucks, when the financial tsunami came. Going into 2008, I still think that stock would be up. Be it US or Singapore. Following are the drivers.

1. US president election year

   During the election year, they would try very hard to prevent the market sinking. Thus, for a very high chance, stock could be up. Although it is unlikely to be another super bull market.

2. Sub prime crisis ends

   After the recent big write off by banks and more confession coming up, I think the sky is clearer now. Market has also priced in more bad news. So, once most of the bad news were over, we can see stock recovering.

3. Oil price trend lower

   It is close to $100 now, I know. It might reach 110 or 120. But, after that, what next? The growth would slow next year. The demand is likely to come down. Saudi or OPEC won't want the super high price to dampen demand and would react if it is too high.

4. Global growth still healthy

   US is slowing down, but the whole world still growing nicely. China keep booming and they would help in absorb some demand.

I hope 2008 would be another positive return year for stock. May all the investor find wealth and happiness. HUAT ah...