Did you regret not exploiting the previous downturn?
If you had invested in blue chip stocks around March 2009, plus/minus 1 or 2 months, and sold early this year, you would have doubled your investments. Even if you sold in October 2009, just a mere 7 months after the market bottomed, you would have made a tidy 60% profit.
NOW is the time to save up cash to exploit the looming recession again.
Forget about short-term trading. It sounds like a very attractive thing to do, but the time can be better spent on advancing your career, or building up a small business. In fact, just today, Sunday Times interviewed some rich HK guy who said:
“My advice to retail investors is to really go long-term and choose the best fundamental stock that pays a lot of dividends and sit on it. About 95 per cent of traders lose money, so don’t try to be short-term traders.”
I would add: (1) if you go long-term, make sure you buy at cheap prices; and (2) if you prefer medium-term trading, like I do, learn about market cycle investing.
How much cash do you have to exploit the coming recession?
don’t be stupid. keeping cash during this period of high inflation will wipe out your cash.
Not holding cash now is the stupidest thing to do. Stocks have crashed to 2-year lows, already quite cheap. If you dont have cash, or worse, if you owe money (bought a big fat condo?), you can’t buy and can only wait for recovery. Maybe it’s going to be a long wait.
dont be stupid. keeping cash in high inflation periods is better than investing in the stock market now which will wipe out your cash.
you should start buying now, and average down if it drops further. can’t catch the bottom, so aim for the good stocks. if you buy now, you already beat those who bought at the top.
Agree. Now I have over S$1.5 million in Cash. When the Global Financial Crisis hits, it is NOT impossible for STI to fall to as low as 1,650 (or 50% from high in Nov 2010). So NOW is too early to start investing into stocks.
why is it too early to buy? If one looks at the Charts of most stocks, they have just reversed from uptrend to downtrend.
Beware of catching a falling knife, ie. buying stocks when it is on a downtrend. Don’t do that. I’ve made such a mistake in the 1998’s Asian Financial Crisis and lost more than half of my wealth then.
Then I learned about Market Cycle Investing and sold out in year 2007 and reached my first million in year 2008. From Oct 2008 onwards, I started buying stocks again and last year alone I made realised Capital Gains on stocks of over S$200,000.
I’ve now raised my Cash level to wait for the Great Bargain Hunting Opportunity (Great Singapore Stock Sale) that will happen in the months ahead.
But now is too early to buy yet, just my opinion, and also based on my analysis of Charts or what is called Technical Analysis.
How to hedge against inflation? I have 9% of my wealth invested into Gold and Silver. I bought silver at as low as US$10 and have been adding on. My average cost of gold is US$800.
So if inflation goes up, the rise in Gold and Silver prices will help me offset the effects of inflation. That’s how one hedges against inflation, NOT by buying stocks when stock market is in a downtrend.
@dennis how much do you make from your investment seminars? 🙂
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