Rising risk

THE risk in the financial markets has increased by another notch.

Earlier this week, the price of crude oil in New York dipped below US$50 a barrel, albeit briefly, for the first time in a year. That came a week after the price of bitcoin slumped below US$4,000 - a key support level.

As it is, both oil and bitcoin are in “oversold” territory.

In the equity markets. wild swings in prices are becoming frequent. One of the areas that is seeing ferocious selling pressure is in the technology sector.

According to some market strategists, the rising volatility across various asset classes is a clear sign of a bear market emerging.

Closer to home. dismal financial results of some of the biggest names on Bursa Malaysia in the recently concluded earnings season is adding to investors’ growing conviction that the decade-long bull market is coming to an end.

The price of crude palm oil, a key export commodity for Malaysia, is barely holding above RM2,000 a tonne.

For investors, going into 2019 will be a challenge.

Over the past decade, the persistent bull market has always rewarded those who have been willing and brave enough to enter the market to target the dips.

The V-shaped recovery that usually follows such price corrections has provided lucrative returns for savvy investors.

But the mood is changing in the market. It is much easier right now to make a case for a troubled stock market, going forward.

With economic superpowers the US and China locking horns, it is much safer just to stick to the sidelines for a while.