The Stock Market has been under correction mode for some period. For STI Index, it has came down to early Jan level. The NADAQ (-27% YTD - updated) seen more severe down level to last year 2021 Feb period similar to Dow Jones. Unfortunately, investment cash account has been depleting as stock gets cheaper.
If we look at Tesla -41% YTD. Apple down almost -21% YTD. If we looks into other growth stocks that is still in -VE EPS phase, -70% loss from All Time High, is not uncommon. This was my concern in the article on Cory Diary : Market Draw Down Logic in late April just a month ago.
Currently at this juncture, there is a feel that market may get worst before it can recover due to high inflation level which forces the Fed to raise rate. It looks like they won't stop unless recession is around the corner. Of-course this is calculated guessing but it may not be what we expect so please dyodd. However if opportunity arise, and if we run out of cash, one is tempted to tap on emergency fund which is a Play of Russian Roulette. This is high risk.
In a down market, Bond can get hit especially in interest rate hikes. So if we park all our money there, there is a good possibility we will also be in deep losses and may not work. Fortunately, the only company bond in the portfolio matures this month and we have a sudden cash boost ( Plain Lucky). This cash can be use in broader market choices. The stock if we are to buy now is much cheaper than most people who invest in recent times. However low can get lower as there is no way to determine when the correction will ends. My personal plan will likely as previous article ( Cory Diary : Market Fear )
Another good alternative is Singapore Saving Bonds that one can withdraw as needed without impact to capital other than the $2 withdrawal fee. And this what I did partially. This few batches planned to withdraw anyway as the new issue of SSB has much higher interests. SSB provides reserve funding for the housing loans for years in my financial strategy. If we are to use it for stock market instead, personally I can only stomach partial funding and mainly into dividend stocks which helps provide cash flow.
Dividend Strategy by itself has passive cash generation ability. The longer the dull period, the more cash receive to buy lows. So in the long run will automatically help investor to buy at good price in cash crunch period.
Finally, have a job helps to provide the needed saving cash to invest during this period.
Should I go into growth stock ? As I was concern with the huge volatility and reduced Tesla allocation ( see link ) which is still quite large, it may not makes sense for me to increase now. To close it off, this is excellent period for dividend investor to collect shares as the price can get cheaper but no ones know how long.
Cash is King feeling in the air.
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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.