Having being fresh out of the oven from 9 months of investing, I finally got a mini bite of how a bearish stock market is like.
For the first time, I opened my MySGX app and all the stocks were red!
Only on Friday, things started to become slightly optimistic and recover again. Can this is considered a correction? But it only lasted a few days…
How did my portfolio do? Time weighted returns are negative, and underperformed the STI. -1.46% against 0.03%. I am actually doing badly in 2018. That’s not very nice.
Indofood Agri dropped 5.57%, and the other two red counters are SGR and CDG as expected. Surprisingly, my small cap counters like Keong Hong and Tat Seng Packaging were going strong. They are far from being in the red.
What to do now?
For me, I intend to leave the stock market with all the action for awhile and stock up on my knowledge instead. I have been studying about the GFC that happened in 2009. It is said in some articles that the next recession will be even worse because of the leftover debt. Since then, many people are still suffering from the consequences – unfortunately, some of whom I know personally too.
I find it extremely ironic that governments have been encouraging people to be financially savvy when their own country is in a debt that can almost never ever be cleared. The growing debt makes the entire economy sicker and sicker by the minute.
It’s so simple. The secret to being financially well no matter where you are in the world is just to spend lesser than what you earn. Yet, this cannot be achieved. It is when compounding interest becomes a pain in the ass for these countries since their GDP will always be lower than the amount of debt that increases year on year.
On the contrast, many millionaires were made because of this huge dip in the markets. Those that were well prepared naturally reaped what they have sown many years ago. That is why having a war chest is important. It can help us to stay sane knowing that we have another back up plan should things turn sour.
So yes, I will be stocking up my war chest still, and be disciplined enough. Either sell, or only buy during recession. That is my way of staying sane. And also to minimize my losses.
Of course, I have never experienced this first hand before. Talk is cheap. Someone who has personal experience of the GFC will be able to comprehend this better. I hope that if you are one of them, you were the one who took that event as an opportunity and would be prepared for the next recession again.
I wonder if history will repeat itself once more. What do you think?