facebookHow do you guys make sure that you have enough cash to buy the dip? - Seedly

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Anonymous

14 May 2021

โˆ™

General Investing

How do you guys make sure that you have enough cash to buy the dip?

Do you set aside an amount each month to wait for an opportunity?

Discussion (4)

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Good qn, even me myself sometime am stuck in a situation where I tot i bought low enough, but the share market just went lower. I guess firstly you need to analyze your environment, whether are you married, with kids, with aging parents that need you to feed them vs someone who is single and your job too, whether isit stable or you can very easily be retrenched. For me I stashed away a higher amount of emergency cash in high saving accounts(e.g. 1.5yrs). As the market dive down, you can start dipping into it. For me, I will buy the stock in batches, e.g. DBS, 200 units at $20, another 200 at $18 another 200 at $19.. I would say sometimes is hard to predict the exact bottom of the share that u r buying, but as long as it is already in the value zone, u just hold on to it, it will bounce back eventually, as long as the fundamental of the stocks does not sway.

Happy Investing :)

Chris

14 May 2021

Owner and Writer at Tortoisemoney.com

I saw this tip on a forum (maybe HWZ lol) but it advices breaking up your 'warchest' into tranches. So for example, you take an index to follow to gauge the dip/crash:

When the index is down 10% - deploy 20% of warchest

When the index is down 20% - deploy 30% of warchest

When the index is down 30% - deploy 40% of warchest

Of course, these are not hard and fast rules can be adjusted based on the market sentiment and how far you expect it to drop. Some dips don't even get to 10% after all.

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