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Ridhwan Muzaki

Posted on 13 May 2021

Is it a good time to slowly DCA into US tech stocks again?

With each dip, would you buy into US tech stocks again for long term ?

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7 answers

Discussion (7)

Hi Ridhwan,

I guess this would depend on your conviction in tech stocks. As an ardent supporter of tech stocks, I am consistently buying the dip to get more shares at a cheaper price. However, like what Choong Hwee mentioned, the quality of the company is important as well. It is during times like this where you'll have to be meticulous in your due diligence to make sure you're getting more than what you paid for. There may be some tech stocks that are dropping, but that may be due to weakening fundamentals, so be sure not to invest in them! Conviction is also crucial because if the next day the share price tanks further, you would need to be able to hold the stock and not panic sell. If you do manage to find businesses that you believe in and has solid fundamentals, then by all means seize this opportunity to scoop these shares up at a discount and watch it grow in the future :)

Hope this helps!

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Post

Found this article on investing in "market crashes".

I quote:

"More specifically, I buy companies on my watch-list in tranches. There is no rule to this and I deploy my available funds based on probability of these events happening:

  • 20% market decline: Likelihood of occurrence is 15%, I will deploy 50% of my available funds at this stage

  • 30% market decline: Likelihood of occurrence is 8%, I will deploy 30% of my remaining funds at this stage

  • 40% market decline: It has only happened 3 times since 1950, I will be fully invested by this point.

Apart from deploying my available cash, I would also be selling lower-quality stocks in my portfolio and buying high-quality companies as the market throws them out. High-quality growth companies and cheap/ reasonable valuations seldom come hand-in-hand. So when the market gives you the opportunity to be an owner of these companies, pounce on them!"

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Jovan Lai

Jovan Lai

Level 13. Grandmaster

Updated on 16 May 2021

People will put funds aside and save up for events like 11/11, Black Friday or any sale. The stock m...

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