Is another financial crisis just around the corner?

IT has been 10 years since the start of the Global Financial Crisis.

 
Psychologically, this is another factor which puts some fear into investors. How can a market sustain its uptrend without a correction once every 10 years?

 
In end-2007, triggered by a collapse in the US housing market it caused the deepest recession in living memory and the near-collapse of the financial system.

 

 
Banks failed, government institutions were bailed out, stock markets crashed and countries had to be propped up financially.
One of the most significant effects of the crisis has been the long and steady fall in bond yields.

 
Japanese, German and UK bond yields remain below 1%, which reflect investors' view on the outlook for interest rates in those regions. US bond yields have climbed above 2% as the Federal Reserve has begun to raise interest rates.

 
However, the knock-on effect of central bank attempts to stimulate economies has sent stock markets charging back. US stocks have risen more than 260% since the crisis' low point in March 2009. UK, European and Asian stocks are all up more than 150% in the same period.

 
Also, the VIX index, also known as the "fear gauge" is now at historically low levels, As governments and central banks intervened to stem the flow of the crisis the VIX subsided.

 
Confidence among investors grew. Schroders says that this indicates that investors see nothing on the horizon that will cause extreme market volatility.
"Low interest rates and the effect of money being pumped into the economy has benefited businesses and therefore the stock markets on which they are listed," says Schroders.

 
Schroders fund manager and multi-manager Joe Le Jéhan says the key to navigating the financial crisis was being alive to the warning signals that were evident across markets in the preceding months.

 
"If we avoid significant losses, we should be in a position to take advantage of cheaper valuations when the opportunity arises, rather than nursing our wounds. We strongly believe that it's this willingness to actively manage risk that allows investors to compound strong returns over the longer term," he said.
Jehan said that during the financial crisis, this meant holding very few economically sensitive equities, avoiding areas like financials and using assets like government bonds to provide some upside as most things fell in value.

 
"While such a concentration on capital protection is vital at the end of all cycles, this cycle has been quite different. So, what we can use to protect portfolios this time may well also differ,"

 
"Government bonds - historically a more obvious safe haven - may not offer the same opportunity this time around. This is why it is worth looking at the few assets that look relatively under-valued and/or have the potential to protect should markets enter another stormy patch.

 
He said that these assets might include cash to help dampen volatility and provide that option to invest at cheaper levels when the buying opportunity returns. The other asset to look at is gold, which also has the ability to make money should equity markets fall. 

 

Read more  -IS THIS TOP FINANCIAL CRISIS OVER 10 YEARS

Good time to DBS buy Now

• Recent drop in share price
• Several positive initiatives
• Raised to BUY

Stock Fell From Recent High of S$22.25

In the past two months, DBS’s share price has dropped from a high of S$22.25 to a low of S$20.38 yesterday. This translates to a decline of 8.4%. In terms of market capitalization, this meant that about S$4.8 billion has been wiped off. During the same period, the STI has dropped about 3.7%, while the FTSE ST Financial Index also fell 3.7%.

DBS has fallen more than its listed peers OCBC and UOB, which declined by 4.1% and 5.6%, respectively. The higher-than average decline in its share price performance could be due to market concern over its oil and gas provisions.

As a recap, for its 2Q17 results, DBS saw impairment charges of about S$304m versus S$180m for UOB and S$169m for OCBC. Recent market jitters over North Korea nuclear test also further added to the cautious tone in the market and share prices generally eased across the board.

Positive Recent Developments

While the recent 2Q17 net earnings came in just slight below market expectations, wealth performed well and accounted for 34% of total Fee & Commission Income. With the strong performance of global and regional markets in 3Q17, we expect fee-based income momentum and strong wealth income to continue into 3Q17. The addition of ANZ will also drive its wealth business in 2018, both in terms of assets under management and revenue.

Recently, DBS has also received in-principle approval to convert its existing India franchise to a wholly-owned subsidiary. This will further deepen its presence in this market. While the operating environment for the Oil & Gas sector is still challenging, the outlook for the local property market has improved recently with more transactions and en-bloc sales.

Upgrade to BUY

Although the share price has come off from the high, the stock has still performed well YTD, up 17.5%. Since our previous report in early August, where we recommended re-entry at lower price level, the current price correction has presented an opportunity to accumulate this stock again.

At current price, and with a dividend yield of 3.2% (based on increased dividend payout this year), we are upgrading DBS to a BUY. Our fair value estimate remains at S$22.50.

More Update: Penny Stocks Recommendations, Stock investment, Share investment, Stock picks & stock market news today

5 Simple Ways To Get The Best Dividend Stocks

With regards to money related matters and the riches securing stock trading is the thing in which one tries to get well off. Putting resources into stock market is dependably an exciting and in this budgetary market each broker encounters the ups & downs. It's ideal to consider a stock picks as a craftsmanship instead of a science.

Concerning pick the best dividend stocks, all financial specialists like the "profits" and getting the uninvolved profit through your venture consistently is something each one anticipate, yet the stock flags that will give reliable profits may not ascend by 20 to 25% every year or the other way around.

So in case you're going to contribute for dividends, you need to pick the best stocks that will give you the passive profit you require. The following are the fast ventures to which will help you to pick the best Dividend stocks:

Search For Mid-Large Cap Stocks: 

The Huge scale company with the fix income and income are having the best dividends stocks. Since these sorts of organizations not get differentiate forcefully thusly the larger part the organization's procuring may get came back to the shareholders as profits.

Profit Pay Out Ratio Is 50% or More:

As the benefit made by stable & extensive organization came back to shareholders as a dividend, discover an organization that have proportion of no less than 50% of 'profit'.

In addition, if the company has the capacity create the uncommon returns for their shareholders, then the benefit earned ought to be as profits. 

Reputation of Paying Consistent Dividend:

The organization must have a stable reputation of developing the profits reliably to shareholders.

The best reputation is to check whether the organization is paying profit reliably from the last 5-10 years then it will considered an organization with the best reputation. Consequently, if an organization brings a fitting ascent with extraordinary achievement, the likelihood of creating the profit to its shareholders is more.

Fundamentals of Company Must Be Sustainable:

Numerous profit financial specialists who keep away from the basics of the organization and give need on centering profits they can get great returns through their venture.

An organization with deteriorating basics likes misfortune in incomes and income can't ready to maintain its profit for long haul. Consequently, lesser the income is produced, less profits it pays.

Besides, an organization with misfortune in income will likewise prompt fall in its stock value, this misfortune in stock cost will have no "profits" which will abandon you at a beginning point.

Consequently, verify yourself before contributing that the organization ought to be in a general sense solid for a long time with great income era as well and also get the daily stock Signals so that there would be generally safe of getting in misfortune.

Company Has a Low CAPEX:

You must put resources into an organization with a lower capital use as a profit financial specialist. On the off chance that an organization is having a higher CAPEX then it needs to re-contribute its surplus for keeping up their business operations. 

Consequently, put resources into that organization which has the capacity to keep up and raise its business stage with least capital use.

Hence, when making interest in stock exchange, you ought to be prepared for any sort of misfortunes, as ups & downs in stocks is dependably been a critical piece of exchanging. By taking after the aforementioned steps, you can purchase best profits for your productive returns.

Source: {www.mmfsolutions.sg/blog/5-steps-to-get-the-best-dividend-from-stocks/}