Market Review: 25 - 29 January 2021
Table 1: Week-on-week returns (25 - 29 Jan 2021)
Funds used by Wahed Invest declined last week with the exception of the sukuk fund. US equity markets recorded their largest weekly loss in three months last week due to volatile trading sessions, raising concerns about speculative excesses.
KLCI closed lower at 1566 mark last week due to persistent selling in most heavyweight stocks, in line with the weaker sentiment on regional markets due to bearish economic outlook.
Market Outlook: 1 - 5 February 2021US markets are seeing unique trading behaviors that started in 2020. The narrative around retail investors versus large hedge funds captured the attention in recent days. The market movements in the past week point to a level of sentiment that will likely contribute to more frequent bouts of volatility. This presents a choppier path compared with the market’s smoother ascent over the past few months.
Meanwhile, the local bourse is still expected to trade cautiously in a shorter week due to the Federal Territory Day holiday. The phenomenon in the US markets inspired some local retail investors to promote propping up certain stocks, though the different dynamics between the US and local markets meant that the outcome will likely be more subdued.
Pressing Points: Do Not Be Left Holding The BagFor 2021, HLAL and RHB IBF are up +1.2% and +0.4%. Meanwhile, MMID and GOLD are down -2.8% and -0.8%.

Table 2: Year-to-date returns (1 - 29 Jan 2021)
Recent excitement in the US markets must surely have led investors to wonder if they had missed out and whether it would be a good time to join the trading scene. For experienced retail investors, they are more equipped to decide if participating in the trading frenzy falls within their risk tolerance. For others, however, taking a long-term view remains the best course of action. Historically, the markets have rewarded long-term investors with clear investment targets and well-diversified portfolios.
Without taking into account the change in company fundamentals and only looking at the price appreciation as a signal, investors are left to speculate. As we know, speculation generally destroys wealth because share prices that have risen so much will reach their equilibrium. Some investors will be left holding the bag and become price takers at the end of the ride. For long-term investors, it is best to tune out the short-term noise and focus on your long-term goals.