Another easy but dangerous option imo ( Kia-si thinking ) for me is to hand over this hard earn money to fund manager that is stranger to you. Consider the amount saved is your life saving and moving forward which is very hard for you to recover them when loss. Popular and star manager no count by the way. They are still consider strangers. I rather keep my money in CPF, SSB or FD.
In all my earlier articles on which I am a proponent of portfolio balance so that we can ride through the market sanely. Even with proper portfolio allocation to mentally condition oneself in market down turn, the most we are Neutralizing Effect meaning not benefiting from market down turn. Well the whole idea is to not to get rich but enough through mitigated risk.
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| 7.x% gap against STI (excl STI feb div) |
However to be on offensive during down turn, we need warchest so as to benefit from economic recovery as market can often be very irrational. This money is best start to build when market is getting elevated and not when is about to turn since no one can get it perfect. And continue increasing the amount till the market turns. This is experience learned. The next problem is when to deploy. We can do stagger across weeks and months. As market is not smooth, is more like small bursts each time. Next we need to consider which counter to buy.
What I did is to look for counters I have high confidence to survive and rebound, and do average down when the gap is quite significant. For example STI was 3300. Today Is 2400. Gap of 900 is easy to decide to average down. Gap of 200 is clearly not enough. Some like to use TA to get to the exact. I think is up to individual and as for me when I have the mood and time. I also take this opportunity to look for counters that I took profit and waiting to return. Some for years. Similarly, I plan to collect them back in stages.
There is a wise man out there who propose to always average down on different counter. I have some agreement with that. So if I am to deviate from this advise, I know what I am going into.
Mistakes
I have been waiting the longest time to buy back 3 of my best return counters of Year 2019 and early part of Year 2020. Ascendas Reit, Vicom and MIT. They will sit nicely in the portfolio. So I manage to do all halfway for each when the price dropped enough weeks ago.
As due to great volatility, I accidentally release MIT back to market again. MIT sits well in the portfolio which often counteract other falling counters. Mistake number 1.
And also due to volatility I decide to take profit on some of the newly acquire Vicom which is a great counter balance in the portfolio. Is greed. Mistake number 2.
Wish that the market is kind enough to give me a chance again. I won't .... .... ....
Just sharing my 2 cents inner feeling ...
Cory
2020-0403
