I have approx $7300, looking to buy into tech stocks in US - is it a good time now, or is recession going to hit soon so I should invest in defensive industries? - Seedly
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Anonymous

Asked on 21 Apr 2019

I have approx $7300, looking to buy into tech stocks in US - is it a good time now, or is recession going to hit soon so I should invest in defensive industries?

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Alex Chua
Alex Chua, Freshmore (Engineering System Design) at SUTD
Level 6. Master
Answered on 25 Feb 2020

You should not time the market.

You will need to do fundamental analysis to understand if your stock is worth buying. Then if the price lower than your projected value, it is time to buy.

What you can do for recession is to build a all weather portfolio to cushion your loss.

You will want to avoid selling your stocks. Have some money to act as warchest (your emergency fund is accounted to last your recession period)

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MT2020
MT2020
Level 7. Grand Master
Answered on 25 Feb 2020

You should not time the market, because nobody can do it accurately. There is this famous saying, time in the market is more important then timing the market. you should look at your risk appetite and decide what you should invest in.

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Lim Boon Tat
Lim Boon Tat, Mathematics at Cambridge University
Level 6. Master
Answered on 01 Feb 2020

It's very very difficult to time the market. What you should try to believe, is that, in the long run (15 years), stocks will go up. I 100% believe in it. But going up 10% in 15 years, and going up 1500% in 15 years is the difference between continuing to work for money, or working to stay engaged, and that's where understanding, studying investing matters. Here's a thought experiment. Why dont you spend $3000 and "buy" a month of your free time, and just go study 8 hours a day, in the national library or online. Reading a book on investing will not take you more than 8 hours (straight). So having a month means you can easily digest 10 books. And i would say that's MORE than enough. This 3k will save you (or make you) hundreds of thousands in your lifetime, and i would say it's money well spent.

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I think we would require more information before we can help. First, How long are you able to part your $7300 in these companies. Second, is it your first time investing? Why do you want to invest in tech stocks?

I guess if you're looking at it from a short-term perspective, they will suffer a hit due to speculation, but if they are financially sound companies, they would still perform well in the future. :)

I hope that my answer helped. ​​​

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Answered on 01 Feb 2020

Think ultra-long-term. market timing doesn't work.

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To determine if the market condition is favourable to invest, the question will be: Is there a right time to invest?

Accordingly, I have compiled a list of financial crisis and disasters since the 90s and every other strong reasons not to invest. However, the market has proven otherwise year after year.

Therefore, focus with the right investment strategy by knowing your investment objective. Then decide the tenure and decide if a lump sum or smaller amount works. Finally, invest into assets that suits your risk appetite.

Here is everything about me and what I do best.

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pat
pat
Level 7. Grand Master
Answered on 20 Jan 2020

What is your risk tolerance and expected return. I know that tech stocks has a high return in general, but can you take the risk involved? There are so many tech companies starting up every month, and how many of them will succeed?

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Billy Ko
Billy Ko
Level 7. Grand Master
Answered on 20 Jan 2020

Hi! Asking if its a good time to buy is as though you're asking if you should bring an umbrella because you're unsure if its going to rain. What I'm trying to bring across is that no one knows. Everyone's talking about this whole recession topic for years but just because it used to happen every 4 years DOES NOT mean that it WILL happen every 4 years. As long as stuffs are not set in stone / on paper (i.e. election / olympic) one should never treat past events as predictions for future events. Just buy if you feel that there is still room for these stocks to grow.

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Choon Yuan Chan
Choon Yuan Chan
Level 9. God of Wisdom
Answered on 20 Jan 2020

No good time, it is up to your risk profile and how long you are invested in companies. Also take your time to research on specific companies to understand their moat

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Bjorn Ng
Bjorn Ng
Level 9. God of Wisdom
Answered on 20 Jan 2020

Hey there,

There is never a good time as to when to invest. People have been saying that recession is coming since 2016, and look where we are, beating higher highs every single day. Don't bother to time to market because no one can do it (note to myself as well). Instead, focus on the fundamentals and future growth potential of the business. Do your own research and due diligience and see if the current valuation of that business makes sense to you.

And to add on, if/when a recession comes, do you think you would deploy that $7300? My guess is that you would probably ask the exact same question, which in other words would be "when is the rock bottom price of the stock", which no one can ever predict...

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Brandan Chen
Brandan Chen, Financial Planner at Manulife Singapore
Level 7. Grand Master
Updated on 07 Jun 2019

There is no good time. What matters is your time in the market. Sounds cliche but this is how it works.

If you are still considering/seeking advice about buying individual stocks, perhaps you may not be ready for such investments yet. Suggest that instead of stock picking, you pick up a basket of stocks by investing into an ETF, Unit Trust, Roboadvisors etc

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Ang Yee Gary
Ang Yee Gary

22 Apr 2019

First you must value the tech stocks. If u are very smart and can forseen the future then you can buy those stocks that will do well in the future. Secondly, you must be patient as the valuation may exceed may be below market price Lastly u must execute the purchase