Is this a good time to invest?

The year 2008 is certainly not good for the market.

Beginning of the year 2008, we have inflations, global fuel hike, the spreading of the "Sub-Prime" effect and the sudden increase of prices for all raw materials.

During the second quarter of the year, we have the "Political Tsunami" which hit the market at the heart and destroyed the confident of foreign investors in regards to Malaysia's political stability. Then, we have the disasters including earthquake, hurricane and cyclone etc all over the world which destroyed assets and reduce the liquidity of the market. We also saw the increase of petrol price of RM0.78 from the original RM1.92 to RM2.70 and most of the government's mega projects were put on hold.

During the 3rd quarter of the year, Datuk Seri Anwar Ibrahim makes his way back to Parliament and the rumours of whether the Barisan National Government will be replaced by the Pakatan Rakyat had put all the foreign investors on hold.

Now, we are at the 4th and final quarter of the year, is this a good time to invest?

If we analyze from the market, the petrol price hike seems to come to an end where the price dropped from the historical high of more than USD 140 per barrel to the current less than USD 100 per barrel. The drop seem to mark the end the mother of all inflations (petrol and transportation costs). We also see that the much publicised September 16 change government political strategy came to an end as nothing materialized. The festival seasons are coming and people seems to be more incline to spend.

We also see that share markets are going down to a point which doesn't reflect the true performance and potential of most of the public listed companies.

If we look at real estate, most of the projects are still on-going and there is still no sign of any abandoning of projects in the market unlike the 1997 crisis.

However, if we look at the political scenario, the dominant UMNO party will be holding their election end of this year and whether there will be political changes therein will affect the country tremendously.

We also have to look at the judicial system which remains unchange after the infamous "Lingam video clips" that may affect the confident on the legal system of Malaysia. This may not be good to encourage public confident to throw their money in the market especially the minority share holders.

We must also be aware that the unnecessary arrests made under ISA do have negative effect on people dumping money into the market.

Whereas in America, the "Sub-Prime" effect is still expanding. The forth biggest investment bank in America, the Lechman Brothers is currently in the midst of applying to the Bankruptcy Court in respect of its financial crisis whereas AIG, the well known international insurance companies are currently facing deep financial problems.

Until the end of this year, there are still a lot of risks which at the moment seems to be quite apparent but in the long run, this may be the drop that all investors are looking for -- before the market starts to bounce up again. This may be the golden opportunity that we are looking for.

Investment in the market involved risks, but if we have the extra cash that we can spare on assets that we can hold for a long period of time, this may be a good time to invest before your cash starts to devalue.