Asked on 12 Mar 2020
I have a war chest, done my research and have a watchlist. Not sure if I have entered too early. Should I hold or sell?
Don't worry. No one knows when the bottom is. If the fundamentals of the company have not changed, and you have reason to believe they will survive whatever storm is coming, then lower prices simply means a better value to accumulate them at. Hence, when entering a stock, you should prepare to add further in future at better prices, at least once more, if not, twice or more.
If you've used up your warchest, that's another matter entirely. So ration your warchest carefully and make sure you still have funds at any point during the next few months. You might never fully deploy your warchest even if you keep going in, but that's just how things are.
I had the same worry too. But truth be told, timing the market is something even experts can't do well (i.e buy low, sell high is more of a gamble than an investment strategy). I think the best is to DCA (dollar cost average) and let the investments work for you over a long time period (10 years or more, ideally the longer the better). The stock market in general always go up historically.
I don't think anyone can definately pinpoint when a stock will be bottom or be at top.
and everyone has different ways of valuating a stock and has different holding time horizon.
everyone sees pricing differently and has our own entry and exit prices. my advise is don't give up and continue to learn and refine your strategies.
more specifically, depending if you are TA or FA, you may choose to cut lost or continue to hold or even average down.
another advise: don't trust those trading courses salesmen who can claim to pick top and bottom. if they can do that, they should be working for temasek or khazanah to grow our countries money. that will be a much more noble job than selling courses.
Go back to your investment objective. Check your research to see if you have missed any crucial information. Evaluate whether you bought the right business.
If yes, then hold it.
If not, then cut loss.
If in doubt, then seek professional advice.
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16 Mar 2020
16 Mar 2020