KLCI dropped, blame who?

Recently a friend was joking with me, saying that since I posted an article of "Missed the boat, Chase the boat, or Leave the boat" back in July when KLCI hits historical high, then it lost its steam and not able to break through anymore.

Not only that, recent weeks in September we saw big sell down to push it to test 1600 level. My friend blamed me for bringing bad luck to KLCI so it's better for me to stop posting. It's just a joke from him, of course.

At the same time we must not forget some people who took the opportunity to short the KLCI index (FKLI) will be happy with recent movements.

So what is to blame for KLCI's case recently? A few things we commonly hear:

• foreign funds are not loyal to KLSE. They just ride on the trend to enter our market, when it is time, they just take profit
• local government and institutional funds are not providing sufficient fund to buy and support the market
• retail investors are not serious in investing in local blue chip counters. Most people are interested in penny stocks nowadays. [Note: KLCI consists of 30 blue chip counters only]
• election factor

There are valid logic for each reasons above. Another factor to add in, is to go back to the basics of investment:  Buy Low, Sell High. The higher it goes, the more prone to correction it is.

So there is no surprise to see recent correction. Those are small correction indeed. One day a real big correction will come.