It has been six months since the stock market peaked in October, which has dragged us into a bear market.

In issue 326, I mentioned that even a bear market will bring about certain rebounds and upticks. When the Dow Jones Industrial Average (DJIA) fell below 12,000 points, it brought about a wave of panic selling that was a result of the Bear Stearns failure. JP Morgan made an earlier offer to buy the troubled investment firm for US$2 a share - a far cry from the US$200 per share when Bear Stearns was at its peak.

In a matter of a few days, the situation turned from bleak to bright after the US Federal Reserve backed JP Morgan’s bid for Bear Stearns. As a matter of fact, the US government is using taxpayers’ money to rescue a troubled financial institution. The initial bid for Bear Stearns was followed by a four-fold increase in the offer price and the move sparked off yet another rally in the US stock market.

As at 25 March, the DJIA was trading at 12,532 - a mere 10% off the historical high - while the Straits Times Index (STI) also fl irted with 3,000 points. I am hoping for a much stronger rebound.

Last October, I warned that a bear market could be coming and mentioned in February that if you had not sold your shares, you should not be selling right now because a rebound is forthcoming. We need a lot of emotional quotient (EQ) when we are investing because we can never second guess the direction of the stock market. Patience is the key.

I waited for a full three years from 2000 to 2003 before making my move and waited for another four years - from 2003 to 2008 - before selling my shares. If you want to succeed in investing in the stock market, patience is very important.

Are you interested in buying Taiwanese stocks? Ma Yingjiu’s victory is a sign of better days to come for Taiwan. We should be looking at stocks related to tourism, hotels, retail and property. If you are more interested in buying Hong Kong stocks, try the shares of airline stocks listed as H-shares in Hong Kong. There are currently 10 million tourists visiting Hong Kong each year while only a mere 50,000 tourists from China visit Taiwan. When restrictions are lifted, we can expect 10 million Chinese tourists to swarm Taiwan.

Now that all of the Singapore companies have reported the financial results, we are also very clear on how the three local banks have handled the subprime mortgage exposure. I believe that the Monetary Authority of Singapore has stringent controls and, thus, the worst should be over for the local banks. Do not sell away the shares of DBS, UOB and OCBC.

Property stocks have fallen by more than half in value, which looks really attractive. These stocks are likely to rebound but, with the property cycle now over, it is likely that we will have to wait a long while before the property boom comes back. If you are holding onto property counters, sell into strength.