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Keep calm and stay invested

Khairani Afifi Noordin
Khairani Afifi Noordin7/30/2018 07:30 AM GMT+08  • 8 min read
Keep calm and stay invested
SINGAPORE (July 30): The possibility of an impending bear market means that investors should be risk-on and prepared to hedge against short-term pullbacks. They should continue to invest in equities, particularly growth stocks, as well as companies with h
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SINGAPORE (July 30): The possibility of an impending bear market means that investors should be risk-on and prepared to hedge against short-term pullbacks. They should continue to invest in equities, particularly growth stocks, as well as companies with healthy balance sheets, say fund managers.

Lim Chia Wei, portfolio manager at Affin Hwang Asset Management, is of the view that quality stocks with high returns on investment capital and stable cash flow could help long-term investors trudge through the market conditions. “It is time to be more prudent and selective. Let’s say that in the past you did not mind buying a highly indebted company because it was delivering decent growth and could cover its debt obligations. This year, you have to be more prudent,” he says.

“Amid tighter liquidity, higher interest rates and a slower growth environment, the company may face a lot of problems, which will only get worse if there is a recession. That is why it is important to choose companies with healthy balance sheets.”

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