Saturday, 14 March 2020

Should We Buy Stocks (STI) Now? Or Wait Another Few More Months? (Part 1)

Patience is Wisdom 

Last year, a very good friend who is successful in career and family management (4 kids) told me that he just attended courses on stocks investments, and he is excited to put money into the market. Of course those so-called Guru teacher has strongly encourage their investment “now” and “not wait”. My friend asked for my advice. I explained that knowledge of financial management including investment or creating a portfolio is imperative in life. But perhaps it is not the right time to invest since the Market is really way too high. He accepted my advice. Just this week, we exchanged messages and he told me market is plunging like mad and of course I know he is glad. Patience is also wisdom.  I told him perhaps it is a good time to invest now!

I was very active in stocks in 2013,14,15,16. And started blogging in 2014 and very active through to 2016. Since late 2015, I had been offloading stocks progressively, holding more cash and precious metals until now, believing the market is over-priced with impending crash that can potentially be worse than the GFC.

2016 Nov : Only 10% in stock. Refer my article here.
2019 July : 39% Cash, 37% metals, 6 % crypto, 9% shares, 9% bonds,. CPF and properties excluded. Refer to my article here.
2020 Mar : 39% Cash, 36% metals, 7% crypto, 10% shares, 8% bonds,. CPF and properties excluded.

Finally – Time to deploy Warchest after 4-5 years wait for me!  

Without doubt, I am grateful for the patience exhibited since late 2015 to 2016. Almost all my portfolio can be liquidated now without loses and in fact some gains!
  • Metals: Gold 40%, Silver 60%. Gold gain, Silver dipped. USD against SGD rise. Overall still decent net gain.
  • Crypto: Started early 2019 and still net gain. Refer proof of article from Mar 2019 here.
  • Shares since 2015-2016: Keppel DC Reit (> double bagger). Raffles Hospital (>30% drop). SPH Reit (almost same). Overall more or less same. But earn dividends over years. 
  • Bonds:  50% SSB, 50% corporate bond. Can be liquidated anytime with no losses. 

Time to monitor closely on stocks, and always be prepared to deploy Warchest cautiously. 

While fundamental analysis of a company is utmost importance, being at the right place at the right time can be of equal or more important. The former is technical knowledge. The latter is wisdom.

Technical knowledge is via hardwork and research. Wisdom is amassed through years of experiences, failures and exposure, not just in stock but also in life.

Déjà vu of 2016 Jan

Jan 2016 I wrote an article when STI drops below 2800 and what should we do. Refer here. The article is unquestionably very relevant now too. Below table depicts if you have 100K to invest, and how and when you can deploy the Warchest.




Conclusion

To conclude, it is definitely a better time to buy stocks now than last year. But perhaps not excessively, starting with a small percentage of cash.

This is because Market Crash usually takes several months to a year or so to bottom out.

E.g.
GFC : Peaked Oct 2007. Bottom Mar 2009. ~ 1.5 years
2015-2016 sell off : Peaked Apr 2015. Bottom Feb 2016 ~ 10 months.

In Part 2, I will go more in depth into simple charts analysis to come to a conclusion if we should immediately rushed to put all our cash into stocks now. And perhaps Part 3, stocks to put in watchlist. 

To be continued .....



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