Is it time to hold cash?

When Bob Pisani of CNBC said that many markets are now at all time or at least 52 weeks high, he forgot to say about Malaysian market as well. Before election, Bursa had already reached all time high. Post election, it went berserk, with the KLCI climbed beyond 1,800 points to later taper down to around 1,750 points. Now, after 3 days it is at around 1,770 points.

Is the market overpriced? I don't think so, if you consider the amount of liquidity that are available in the market. Bernanke is still printing money, not leaving his foot from the gas pedal. Japan is even more aggressive, looking at doubling its issuance of bonds. Basically, everywhere in the world, we are seeing people (rich people that is) do not know where to put their money. In Asia, property has gone to prices where it has never reached before.

Well, so it seems for stocks as well. People whom are holding cash will feel like cash is NOT KING. I provide a scenario. Even with stocks, a decent pick would have its dividend return better than returning a 3.2% interest from Fixed Deposits. Don't believe me. Look at the comparison between Fixed Deposit vs dividends.

Fixed Deposits earned if I would have put the money from Felice's Fund

Based on above, the total FD that I would have earned from the money put in is only RM2,664.55. Against the dividend earned from the portfolio, which one provides me with a better return so far? Few years ago, no one would have expected total dividend earned to be higher than the interest earned from FD.

Now, it seems like it is an issue if one is to hold cash. The return would not even beat real inflation (do not believe the number provided to us...). Hence, all kinds of riskier assets are sought. It in fact seems to me holding cash is the riskier of them all currently.

Nevertheless, the exuberance over the last few days caused me to re-plan. I had wanted to hold Time Dotcom for a longer while, as I wanted Digi's distribution as part of my holding. But it seems that with the sudden rise in stocks over the last few days, I think that selling Time Dotcom would be the better thing to do while I look for another stock to hold.

Sold Time Dotcom

I think I know which one to have if the price is right as there are some stocks which retreated a bit despite the rise in KLCI.

p.s. the sale is partly to do with I believe some of the hands are pushing some stocks up to prove some point...