They say a leopard never changes his spots, but can a tiger change his stripes?
The year of the golden Tiger seems to point in that direction.
According to the Chinese zodiac, it is a year traditionally associated with massive changes and volatility. But what does that mean for investors?
Combining the traditional Chinese practice of predicting fortunes through dates, or feng shui, along with current market trends, CLSA recently launched its annual Feng Shui Index report to see what 2010 holds for equities, commodities and property.
Their main message: Expect a year of volatility. So keep your cool.
“Tiger years are typically marked by dramatic changes and even upheaval,” said the report. “As with any good roller-coaster there’s no upside without a bit of downside, but you can survive the ride in much better shape if you see the turns before they come.”
Golden Tiger Year
It may come as no surprise that the year of the golden tiger has its sights set on the precious metal itself.
CLSA predicts 2010 to be a year for gold, forecasting the price of the yellow metal to break US$2,000/oz.
“We see the rally kicking off mid-year,” the report states.
Feng shui expert, Brandon Chua, has similar sentiments towards the metal.
“I think gold will continue to rise, basically because of the instability that is mentioned in the Chinese almanacs, and they talk about the droughts and flooding in climatic disasters. All this will add up … to very unstable forces,” Chua said.
Other non-ferrous metals like silver, copper, zinc and aluminum are also in favor this year. But sectors related to the element of “water”, such as shipping and transport are not expected to fare as well.
The Good, The Bad & The Volatile
February and June are seen as good months for investment opportunities, according to the CLSA report. The best month for investing though, is in October, as it marks the return of a sustained drive upwards that will continue into November, December and January.
Volatility is expected in August, with gold, silver and copper set to break upwards.
For Brandon Chua, he sees a lot of aggression in the stock markets this year due to the distinct lack of the water element.
“So with that element missing and with metal representing toughness, decisiveness, we see a lot of aggressive action in the market. There will be a lot of punters in the market.”
Ride The Tiger, But Stay On
The tiger is typically seen as a wild, fierce and impulsive animal. Similarly, we can expect the year ahead for markets to be energetic, but risky.
CLSA cautions that if investors do decide to ride the volatile and bumpy back of the Tiger year, they have to make sure to hang on.
“There’s an old Chinese saying that translates roughly as 'Once on a tiger’s back, it’s hard to get off.' But if you can hang on, it’s certainly the safest place to be.”