Market Opportunity Timing
Nasdaq has crashed about 25% from ATH. STI has corrected about 8.5% roughly from recent high. Many growth stocks already hit Pre-Covid level bursting the bubbles created from WFH atmosphere. No doubt Market is in Fear. As usual when market is in blood bath there is opportunity to be made. The problem is will it go lower. If we are to measure against Mar 2020 crash, we still have 1000 point to go for STI Index ! Something to think about with current high inflation. No model answer here.
The recent crash comes at a time after my fear of volatility with growth stocks, my path into multiplier and SSB hitting 2.5% for new issue. In a way, incidentally build up a reserve to tap.
Coincidentally with high SSB rate, refunded back some issues for higher rate plan and a Bond matured this month. However, I still prefer to retain most of SSB for housing loan emergency at higher rates. And I plan to reserve some fund for CPF top from the bond matured.
At max in Net, the reserve can still provide a sizeable amount if we are to deploy them into warchest other than those investment cash account which already quite depleted from recent DCAs during the sell down.
Firstly, where should we deploy.
We can go for Strong Reit which are coming near to 6% yield as Option 1.
How about be a little greedy and go for High Yield Reit hitting 7% if we take into buffer consideration of exchange rate risk. Possibility mix with some other stocks. This will be Option 2.
Option 3 into S&P500 which corrected roughly 18%. Required exchanging for USD at expensive rate that tend to fall in good times as my assumption.
Option 4 into Growth stocks with strong balance sheet and again required USD and larger volatility/Risk which blogged in earlier article.
Secondly, how much each time to deploy, the pace and amount. So far I can hardly smell any course change with current high inflation medicine. Maybe will try bits investment each time during this market sell down each day spread across a period. Once Fed makes a deliberate control to slow down the rate hike, or some major market change, we can adjust after for the next batch. So maybe 30% before and 30% after. And remaining 40% for buffer. This plan likely varies as time progress.
What a time to have Covid Buffet at Home !
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