Betting On The Market?

"To demonstrate the strong conviction underlying its research view on the Singapore market, Fundsupermart.com will donate S$50,000 to a local charity if the FTSE Straits Times Index (STI) does not hit the forecast level of 3,600 points at any time from today till the end of 2011."

What I have to say?

I truly confident that market will continue to appreciate for the next 2 to 3 years. Not just saying it but I'm betting most of my money in the market at the moment. I even go to the extend of leveraging (borrowing) to invest. I take full responsibility in what i say because i bet my own money into the market. Which i'm exposed to potential downside of losing almost all of my monies. However betting S$50,000 is nothing, considering the limited downside and unlimited upside from the potential up front commission and trailer comission to be collected by FSM.

The main thing is not about S$50,000 or giving it to the charity. What i wish to highlight is that, don't blindly buy things that you are recommended for. Because eventually no one will be able to guarantee anything (beside goverment bonds). This is because, eventually you are bound by the clause "we are not responsible for any lose caused by our recommendation".

Take note that from current STI level of about 2600 to 3600 by end of 2011 is a appreciation of about 20%pa. There is none "guaranteed" return that can give so much. Therefore, do your homework and research before buying any investment. Don't put your whole life of savings into this betting and risk of losing millions of dollars.

Attached below is the SM's recommended portfolio which are launched since year 2002. Until now, these portfolio's would have celebrated their 7th anniversary. Below are the performance of the recommended portfolios by FSM. Incase you don't know what is IRR, it means "internal rate of return".

For example, if you would have follow the recommended portfolio's aggressive portfolio since launch till now, your portfolio return will be 0.6% per annum for the past 7 years. This is clearly not impressive.

Where Are the Customers' Yachts -

"A visitor to New York who admired the yachts of the bankers and brokers. Naively, he asked where all the customers' yachts were? Of course, none of the customers could afford yachts, even though they dutifully followed the advice of their bankers and brokers. Full of wise contrarian advice and offering a true look at the world of investing, in which brokers get rich while their customers go broke, this book continues to open the eyes of investors to the reality of Wall Street."