PFF Panel 3
Seedly PFF 2019
Asked on 02 Mar 2019
I would think in the case, if time is not on your side, an ETF would be a viable option for you. It's kinda "auto-diversified" for you, so you just got to identify the kind/industry of ETF that you have the most knowledge and conviction on.
If you have enough capital, you can buy blue-chip stocks in a financial crisis and that will help to capitalise.
Buf if you have no time to do research, then ETFs are a all-weather-type of investment that you can do all-year round. :) Go for monthly ETFs to save yourself the hassle too!
I would just go into ETFs/UTs. As long as it is diversified, I reduce concentration risk and will be banking on the whole market recovering in order to make my gains. I would deploy my war chest in batches though, since you never know when the market reaches the lowest point.
If you have no time to research, it is ETFs. After all in a market upcycle, majority of the stocks in the ETFs will also benefit from the upcycle.
ETF for sure because stock picking is not an easy game.
Stocks require enough information and unfortunately, there is no substitute to time if you want to do it in an educated way.
In a financial crisis, as long you still have dry powder to invest, dare to invest when everyone is afraid, and discipline to hold it long-term, does it really matter which instrument is better?
I think in a financial crisis, it is extremely difficult to find out which stocks will survive and which stocks won't. Just take a look at a bank that no one though would fall - Lehmann Brothers, which is evidence enough that in a bad enough crisis, nothing is barred from failing.
Instead of picking what exactly to buy, I suggest buying an index fund/ETF as well - takes away the need to really plan when to go in or how to allocate, everything is already done for you. All you need to do is buy and hold it till the crisis is over and the market rebounds once again.
Of course, this is based on the assumption the market can recover to previous highs. One such market that has done so consistently thus far is the S&P 500, the US market cap weighted index of the 500 largest US companies. One that has not recovered yet is the Japan Nikkei 225 Index - the value of the index has not recovered the highs of the late 1990s when the real estate bubble burst and everything came crashing down. So TLDR: no free lunch in the market, but the closest thing you can get is indexing in the right market.