The Next Big Crash - Are You Prepared?

(16-10-2013, 07:31 PM)Dividend Hermit Wrote: Got the SGS at a slight discount and coupon rate quite okay (3.375%).
Another reason I sold my stocks is because I bought them at a high price (newbie mistake as I chase the tail). Now got chance to sell so I intend to re-enter at a much lower price in future.

I would ask you to reconsider although this is but my humble opinion.

In fact, would suggest you buy them all the stocks back and then some. 3.375% looks like a 30 year bond. Even if it is a 10 year bond, the average CAGR of stocks is about 8% over the long term which is double of that.

I believe prices of stocks now by most metrics are about average. You might even find some selling at prices slightly below average and might be able to get some clues generously left in this forum. Anyway, since you are paying an average price, you should expect to get an average return. i.e. 8% CAGR.

But yes. This is just my opinion because I am not very good at buying at highs or lows and I am more than satisfied with average returns over the long run.

indeed - i will agree with davidsim as well.

it is important to stay vested (the proportion of which is debatable) - missing out on days of jumps takes a decent chunk of performance out, not to mention the psychological difficulty of chasing a rally.

Thanks for the advice. I still have much to learn. =)

I will buy back some counters when their prices are slightly lowered.
Waiting for the financial results of a few stocks on watchlist too.

The bonds are 20-year ones.

If price continues to rise, there will be opportunity costs for me. Need to learn from lesson and move on~

US rallied again... still no deal...
seems like investors are confident of a deal within 24 hours
we shall see

I am 2/3 invested, 1/3 cash
once coast is clear will go all in ^^

They don't have to do a deal within 24 hours. After today, they will still have 35 billion or so to spend. If by November they still are deadlocked, then we will see daily 400 point drops of the Dow.

(16-10-2013, 09:46 PM)ForeverAlone Wrote: US rallied again... still no deal...
seems like investors are confident of a deal within 24 hours
we shall see

I am 2/3 invested, 1/3 cash
once coast is clear will go all in ^^

"Coast is clear" means after they struck a deal and the stock market rallied? Or after they failed to strike a deal and the stock market plummet?

Or will you go in either way?

either way also go all in
just wanna be vested in the market

I realise sitting too much on cash no good
no returns at all and inflation eating my $$ at 2% a year

wanna follow peter lynch style.. just full vested at all times

Did Peter Lynch fully invested his money, or the money in the funds he managed?

(16-10-2013, 09:36 PM)Dividend Hermit Wrote: Thanks for the advice. I still have much to learn. =)

I will buy back some counters when their prices are slightly lowered.
Waiting for the financial results of a few stocks on watchlist too.

The bonds are 20-year ones.

If price continues to rise, there will be opportunity costs for me. Need to learn from lesson and move on~

Yes I agree we all need to learn our own lessons.

I would like to share this with you though. If I assume you are still relatively young, every month from now you are going to get a new injection of cash. Therefore, if you still keep your whole portfolio in cash/bonds, you effectively have a very negative view of the market.

If there really ends up being a crash in the near term, via the monthly cash infusions from your job you will still be able to take advantage of it somewhat.

However, if now is the start of a bull market, you will be caught out cold unable to benefit at all. Given that stock markets move in spurts, if you do miss out on this rally, you will have to wait a considerable amount of time before prices rally again. Also, what guarantee is there that future prices will drop below current levels?

Still I must say that in the end everyone has his own way of investing. For me I know that I have below average skills, knowledge, ability, tools at my disposal, etc so if I am able to perform averagely I am already very happy as I have far outperformed my potential.

Good luck on your journey.

(16-10-2013, 11:38 PM)davidsim Wrote: Yes I agree we all need to learn our own lessons.

I would like to share this with you though. If I assume you are still relatively young, every month from now you are going to get a new injection of cash. Therefore, if you still keep your whole portfolio in cash/bonds, you effectively have a very negative view of the market.

If there really ends up being a crash in the near term, via the monthly cash infusions from your job you will still be able to take advantage of it somewhat.

However, if now is the start of a bull market, you will be caught out cold unable to benefit at all. Given that stock markets move in spurts, if you do miss out on this rally, you will have to wait a considerable amount of time before prices rally again. Also, what guarantee is there that future prices will drop below current levels?

Still I must say that in the end everyone has his own way of investing. For me I know that I have below average skills, knowledge, ability, tools at my disposal, etc so if I am able to perform averagely I am already very happy as I have far outperformed my potential.

Good luck on your journey.

Thanks for your kind advice. =)

Yup, I am quite young (age 26) and just started investing last month. I am currently reading up books, blogs and forums to get the different perspectives.

Eventually, I hope to have my own workable set of investing rules and strategy. Cheers. =)