Stay in Cash until next market crash
January is a month of turmoil and unexpected outcomes.
As professional and retail investors proclaimed the death of equity markets, the detrimental effects of US government shutdown on US economy, Br-exit fears, China economic slowdown as well as trade war concerns, my portfolio had an unexpected recovery largely boosted by the recovery of STI ETF, Singtel, Ascendas India trust, Silverlake Axis, Tencent and to a smaller extent Apple stock.
In the parlance of professional classic investor -speak, I should be considered cautiously optimistic of the year ahead. In layman terms, I actually have no idea what is going on. The only thing I am acutely aware is that on 28 Dec 2018, the market sentiment is ruled by extreme fear.At this current time however, market sentiment recovered and there is no change in economic and bottom up fundamentals throughout the course of 1month.
https://money.cnn.com/data/fear-and-greed/
The reason why I created this post with a click-bait title, is simply because I have ran down on my war chest and is dangerously low on my cash position. I am acutely aware that this recovery might be temporary and may be due to luck rather than any semblance of skill. As I make an active effort to avoid making macroeconomic predictions or time the market, I shall stick to what I know (and don't know) and simply wait for my war chest to recover. Dividend season is back and I await to receive the red packets from my underlying companies.
In hindsight, I might simply be lucky when I averaged down while everyone is scrambling for the exit, and bought significant holdings at fire sale prices. I did not even manage to catch the bottom of any of the stocks I bought. It was a horrible sinking feeling when the stocks I bought got cheaper and cheaper and fell further 20% after I bought it and stayed that way for the remaining few months. I am simply glad I made the right decisions at that point of time.
As per my observations, the market will be deficient in providing undervalued and market mis-pricing opportunities when it is on a bullish run. Until there are further upheaval in the markets, I shall actively try to reduce my time in blog-posts and be more disciplined in active investing until the right opportunities strike.
As professional and retail investors proclaimed the death of equity markets, the detrimental effects of US government shutdown on US economy, Br-exit fears, China economic slowdown as well as trade war concerns, my portfolio had an unexpected recovery largely boosted by the recovery of STI ETF, Singtel, Ascendas India trust, Silverlake Axis, Tencent and to a smaller extent Apple stock.
In the parlance of professional classic investor -speak, I should be considered cautiously optimistic of the year ahead. In layman terms, I actually have no idea what is going on. The only thing I am acutely aware is that on 28 Dec 2018, the market sentiment is ruled by extreme fear.At this current time however, market sentiment recovered and there is no change in economic and bottom up fundamentals throughout the course of 1month.
https://money.cnn.com/data/fear-and-greed/
The reason why I created this post with a click-bait title, is simply because I have ran down on my war chest and is dangerously low on my cash position. I am acutely aware that this recovery might be temporary and may be due to luck rather than any semblance of skill. As I make an active effort to avoid making macroeconomic predictions or time the market, I shall stick to what I know (and don't know) and simply wait for my war chest to recover. Dividend season is back and I await to receive the red packets from my underlying companies.
In hindsight, I might simply be lucky when I averaged down while everyone is scrambling for the exit, and bought significant holdings at fire sale prices. I did not even manage to catch the bottom of any of the stocks I bought. It was a horrible sinking feeling when the stocks I bought got cheaper and cheaper and fell further 20% after I bought it and stayed that way for the remaining few months. I am simply glad I made the right decisions at that point of time.
As per my observations, the market will be deficient in providing undervalued and market mis-pricing opportunities when it is on a bullish run. Until there are further upheaval in the markets, I shall actively try to reduce my time in blog-posts and be more disciplined in active investing until the right opportunities strike.
Hi INTJ,
ReplyDeleteAfter almost 4 years of investing, I still am unsure whether am I doing the right thing and do I actually have the right processes in place. So you are not alone regarding "I actually have no idea what is going on."
Happy New Year and all the best to our investment journey!
Hi UnN
DeleteI read a lot of investment literature prior to my investment journey. It might be a good idea to start off by following and understanding strategies of proven fund managers with a track record, with similar temperament before you start to innovate your own strategies.
Just be aware that most fund managers don't beat the market consistently and you can always tap on the experiences and mistakes of fellow bloggers to be better. Some of my investment thesis /ideas is also generated from prospecting others ideas and I benefited a lot from fellow bloggers!