Asked by Anonymous

I invested a one-off lump sum of S$8k in 2018 and am torn at my options: pull it out now and reinvest when the markets tank further, or leave it in for the long game?

I don't DCA into StashAway and am down 5.1% so far. Nothing large, but with the markets on the edge of a crash will it be better to: 1. Pull the money out now at a 5% loss, wait for the market to bottom out and reinvest the same sum back in SA/a US index fund 2. Leave it in SA through the coming recession, with the expectation that it'll recover in the long term. For background: I maintain positions in the STI, ABF and SG blue-chips and regularly DCA into these. SA is for my diversification.

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  • Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding
    Level 6. Master
    Answered on 11 Jan 2019

    Look at the market now. It's recovering. See the pattern of see saw? Spooked by the volatility and price action?

    I agree to hold (especially they invest in index). So has the market bottom out now?

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  • Lee Chun Kiat
    Lee Chun Kiat
    Level 2. Rookie
    Answered on 07 Jan 2019

    Please stay put with your current investment in SA, the market is generally bad across the board.

    Ask yourself this - if you pull the money out at 5% loss, do you think you are able to reinvest again when the market crashes 30%? The truth is most, if not all of us, are not emotionless, we will probably sit aside waiting for the "bottom", till the market recovered and missed the boat....

    And we will tell ourselves that we will not miss the next crash, ended up buying at peak, and so on...

    Time in market is better than timing the market - just remember this and you will be fine.

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  • Lim Chun Long Jimmy
    Lim Chun Long Jimmy, Biz Partner at Flagship Games
    Level 5. Genius
    Answered on 04 Jan 2019

    HODL your shares in StashAway.

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  • Kenneth Lou
    Kenneth Lou, Co-founder at Seedly
    Level 8. Wizard
    Answered on 04 Jan 2019

    The truth is that the markets are really not in the best shape now and pretty volatile (as seen in the recent swings). And in fact, I would not advise to pull out at the 5% loss (i'm also in a similar position acutally)!. I would instead hold my position, and even put in more when the market goes even lower. (for Robos with US ETFs)

    Unless you need that $8k urgently? Then it would be a different story. But if you are in this for the longer game 10 years to 15 years, I would suggest leaving it there and letting it recover.

    On my side, I also have a large part of my portfolio in S-REITS and the STI ETF. So I believe that overall, it's pretty diversified (like you). Just got to ride out this wave and also pick up some good undervalued stocks along the way.

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