Stock market ... Trend reading by the unsavvy investor

I have been looking for a pattern in our local stock market for high volume activities. I noticed that in early part of the year especially before the Chinese New Year, volumes would go up and prices would also rise in tandem. Then come the first quarter results of companies and some other economic indicators and depending on the leads, the volumes or price will either slump or surge briefly in March and April, then the various companies will be declaring their dividends. Some fundamentally strong companies will still retain good prices despite the dividends payment.

The stock market will then take a breather and you will find that, apart from a surge here and there, it remains lethargic and now with the World Cup going on, the market will continue to be rather lacklustre. I have not visited the market since my portfolios took a deep plunge due to the Greek debt woes. The uncertainties retard market momentum. And so you read bad news today and the next some good news so the market goes "yo yo".

The US Federal Reserve Governor Ben Benarke did give an assurance a couple of weeks ago that the American economy had somewhat strengthened and so the "double dip recession" might not materialise and this has given some cheers to wary investors. Before that the DJI  index went down below 10,000 sending shivers to the investing community.

I have tried to read those technical charts to be more "scientific" but really those are merely  illustrations of "herd behaviour" of investors and they may not necessarily be indicative of wealth generation to the individual investor unless he/she knows when to leap in or ride off. Timing the market is never easy. I tried a few times, I can tell you that I sometimes gain and sometimes lose.  But if you are persistent and persevere and are not in a hurry to create instant wealth, you will actually generally gain when  you monitor the market behaviour long enough and have latest knowledge on the target companies and those financial news that matter.

Let us keep investing and contribute to the economy.