Wait for market correction

I did a survey in mid July to ask investors about their preference in investing a lump sum at that time. I gave them 4 choices. 46 people respond to the survey. Here are the results:

1. Invest the money for 5 years to get a guaranteed return of 2% p.a.        10.9%
2, Keep cash and wait for market to drop by 10%, i.e. ST index of 2,600      28.3%
3. Wait for the market to drop by 20%, i.e. ST index of 2,350                28.3%
4. Invest in preference shares or REITS to earn a yield of at least4% p.a.   32.6%

More than 50% of respondents said that they would wait for a market correction of 10% to 20%.

Last night, there was a 3% market correction in USA. This will be followed in Singapore today. Over the next week, the market may correct by 10% or more. If that happens, it is time for long term investors to enter the market.

Tan Kin Lian