Jan 9, 2022

Cory Diary : Holding our emotion during market volatility

Investment is tough when market is in high volatility and position is in red, really red. How red is red is based on individual pain points. For anyone this is matter of time when we are in this situation. Some people may feel painful losing $800 when their monthly salary is $8000. Some people do not feel much at all and sleep soundly even when they are in $250,000 loss. The key is to find our ways to close the gap and how to overcome the emotion so that we do not worsen our situation further. Below is what I did.

“Successful investing is about managing risk, not avoiding it.” “The essence of investment management is the management of risks, not the management of returns.” This is what Benjamin Graham, the father of value investing, had to say about investment risk.

Taking care of our basic needs

There are not many available. What I did is to make sure there are safety nets.

SSB and try to maximise it when possible. More than $4k of interest last year. Rotate them when I find it is worthwhile to get better interests in net after cascading.

CPF and try to maximise my CPF SA first. Do VHR. Do OA to SA Transfer. Top-up MA. When SA Max, VC3AC. In my context to age 55 and therefore only need to do this a few times. More than 10k of CPF interests received this week !

Tried Singapore Treasuries and find top quality preference shares or bonds available in the market. Preferably by local big 3 banks. They provide baseline defense when market crashes. And at portfolio level reduce to the % losses. Likewise it will also reduce your gains when market is in high mode. Today I do not hold any preference but I still have Frasers Bond as I moved them slowly to CPF for longer term plan.

Emergency funds and having job help too. Many fundamentally strong stocks when oversold typically comes back. It is quite detrimental to one financially if we are force to offload stocks at low price due bad circumstances. Be ready and prepared.

Having something over our head helps. A home where we can have peace of mind. No worry being chased out from our rental home. A place where we can rest with peace. It can be a 3 room HDB, a condo or whatever affordable. We can move on from there as we grow.

Diversifying our Income

Do not have many talents. Do not know how or energy to learn to do business. Not a person who can depend on You-tube to get income either. Though I blog, is only allowance received. Yes is allowance unless you are the top. The easier way is to rent out our property and the income is quite sizeable and within our ability. There is some work but is much easier to overcome. Now with new property curbs. this gate is even smaller now. Fortunate to bought a property in the middle of property curbs. Never look back.

Dividend Strategy

Within the stock market, Singapore has a key segment which are dividend income focus called Reits. A good start to create the basic safety nets on equity investment income itself. Like most equity. there is risk. Higher risk for other who do not know what they are doing.

Reits have to distribute 90% of their distributor income to shareholders to enjoy tax break. Due to that is quite popular to many including myself. Some of the reits are high risk and you can lose big time. I stick with reliable ones with lower yield. They typically will not have capital loss in the long run even if you miss Rights Issue. When venture out to higher risk ones, do much more home work and size the investment accordingly so that we can sleep well even when the sky drops.

It feels good to know that we are collecting dividend and confident that the stock price will return back. If you are not, better do home work.

Capital Recycle

I do take profits when the market in euphoria stage or specific stocks have significant run up. And then do re-balance to similar risk level or balance it out in a way in net there is higher cash on hands after. Typical done in stages. Not only selling but buying too. Trading fees not my top concerns and I typically do in stages to manage out the timing price differences.

Why we do this is quite simple. Market fluctuates and often psychological managed by mass media or even analysts to talk up or down specific stocks. When Taxi uncle is also talking about it, friends who never talk about stock starts picking them up, when everyday news is on all time high, are indications.

Having a War Chest

When we have bullets ready to shoot we are in attack mode. We know is an opportunity to "kio durians". This will help us weather discomfort in down market too. In fact we may even feel better that we can enter into new positions or enlarge our existing investment specifically Reits as we are buying cheap with good chance on same dpu.

Going in small initially

When we have a huge amount of money to invest but little experience. Is highly risky to plough them all into the market. This is really timing the market mindlessly. This is similar for new position for experience investor.

We can start small and over time we feel better or in good net position, we can average up. This will absorb down side better as there will be profit buffers already build into an uptrend market such that when the market collapses we feel much less in pain.

Improve Investment knowledge

Ability to understand what's going on and do basic evaluation helps a long way to reduce or manage risk. So always have an interest in improving one's knowledge. Is easy to manage one emotion when making money but is hard when you are in losing one.

Avoid Penny Stocks

Like BBs will manipulated with Mass Media, the smaller Boys will manipulated in Telegram, Forums, Whatsapp, Meta Platform etc to encourage you to buy into specific stocks that they can manipulate the stock prices. Sometimes one may escape unharmed or with profit but you just need one time get caught, and is big lesson learned. Even if there is no manipulation going on, is basically gambling between the investors and someone will lose out who could be an investor as is a zero sum game for such scenarios.

Such speculation is highly dangerous especially Penny stocks because it is much easier for perpetuators to control unless they are Bill Hwang in the big league. Scammers can work in group with multiple accounts to give the impression that there are  many people joining the frenzy game and talking among themselves. In all, it could also be just an investor talking to himself. Always be suspicious when a value investor suddenly ask people to buy penny stocks or share his investment in penny because this contradict everything he does. In all likelihood, you will be buying from him at the end of the day.

Cutting Loss

I find this most important. When we make mistake or controlling exposure, we have no concern in cutting loss. It should be like a walk in the park. Long run typically I am in better position mentally and financially. Some people refuse to sell till their position is in profit. This can be dangerous behavior as the stock fundamental is not there.


One of the worst mistake is not knowing we are in one. We can keep averaging down and down but the stock price never really come back up. We did our home work many times. Unfortunately time is money. And sometimes our conclusion is bias and wrong. Hence is important to diversify so that we can survive and continue our investing journey.

Major market Index ETF like S&P500 is broad based well diversified market index. Fund managers may hate it because they are beaten by it usually and some has been bias against it. The risk is country risk. Frankly US is as strong as ever despite specific groups who dislike it. Unfortunately I know about this too late. The Index is usually ATH but I will try when opportunity arise.

I do diversify my portfolio into multiple reits, banks, non-banks and last year into US stocks. This is in addition to SSB, CPF and others.


There are many moving wheels and each play an important items in my watchlist and always look out for more. Drop any on our own perils. Help me to invest and grow my wealth. Without them probably I would just leave most of them in the saving bank and this will be the highest risk in inflationary world.

Imagine you have 100K in saving. A 5% inflation is 5k losses in purchasing power each year. Many people refuse to see it and feel secure they still have 100k in the bank plus the interests. This is real loss just that the figure doesn't change and is highly damaging to working middle class who earn average monthly salary income and who has saved a life time in a decaying pot.

Money is Working for me. But it may not works for everyone so take care and be safe.


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Articles in this Blog is personal take and sharing purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

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