Investment Research and Sovereign Risk Analyst at JMMB Group, Leovaughni Dillion says with interest rates gradually coming down, investors should consider repositioning their investments.

Speaking on Taking Stock with Kalilah Reynolds, Dillion noted that, local stock markets have faced challenges, with indices like the main market and combined market showing lacklustre performance. 

“Part of that, of course, has to do with the higher interest rate environment,” he said, highlighting the impact on company fundamentals.

Historically, the market experienced a strong uptrend, peaking around August 2019, fueled by a low-interest rate environment that boosted earnings and valuations. However, the economic shock of COVID-19 and subsequent rate hikes shifted this trend, dampening market growth and pulling back earnings.

Now, as interest rates begin to decrease, there could be opportunities for strategic investment in equities. 

“You want to be ahead of the curve,” Dillion said, suggesting that investors focus on where the market is headed rather than its current state.

For those looking to enter or expand their positions in equities, considering options like equity-led unit trust products might be beneficial, especially for younger investors with limited capital. These products offer diversification and potential growth as the market improves.

While market recovery might not happen overnight, investing with a long-term perspective and a diversified approach can position investors to benefit from future uptrends.