QE Tapering - How does it affect investors?

Been wondering why the STI suffered a declined for the past few days.. Blue-chips, S-reits all registered fall in share prices in the past week. While there were no fundamental changes to any of the listed companies, what resulted in the fall?

QE Tapering:

It is widely expected that the US Federal will likely proceed with QE tapering - buying less bonds or selling part of the bonds it has bought previously when the US economy and unemployment rate was bad. It is understandable as QE was never intended to last forever - as economy improves there would be a point when Fed would start to tighten things up. But how is this going to affect the markets across the globe?

Previously when QE started a few years back, companies were able to borrow funds more easily, and were capable of coping with lower finance costs to build their business. As for now, Central Bank will be looking to buy lesser bonds or sell off their existing bonds, therefore, money supply would decrease - resulting in potential rising interest rates.  This is likely to slow down economy growth as spending would be reduced as a result of tapering. As we know, s-reits are largely affected by interest rates since it is has a direct impact on the expenses of companies (refinancing cost, existing loan facility cost etc. are all expected to increase). Hence, companies might suffer the backlash of raising interest rates. EPS will be affected and the value of the company would be eroded.

While the minutes of meeting of US Federal has yet to be released, investors are wary of such threat it could potentially pose to the companies. Some traders would then be inclined to play safe and start selling off their shares to protect themselves against possible decline. Bringing in the law of demand and supply, as supply exceeds demand, share prices drop.

In conclusion, QE tapering will affect all markets in the world. But what will you do from the point of view of an investor?

To accumulate more shares while the price is low, or sell off current shares to cut loss?

Pardon if I have stated any incorrect in my write up (i am on a steep learning curve!) Feel free to leave me any comments on my write-up as I look to improve bit by bit!

SGBoy94