Asked by Anonymous
Asked on 13 Sep 2018
a) Continue DCA-ing into your ETF
b) Rush into SSB subscription
c) Rush into ABF Singapore Bond Index Fund and hope it wakes up
d) Rush into Nikko AM Corporate Bond ETF and hope it wakes up
e) Start hoarding money in DBS multiplier (2%) and wait for Great Stock Sale
f) None of the above - Why?
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B, C, D suggest a lack of investment experience. It is hoping to time the market.
More often, big mistakes are made as shown in the image below
Experienced investors hold cash or low-risk assets when they can't find opportunities to get invested into. The rest stays invested with no expectation of when is a market crash. Not rush in and out at opportune times.
E) "Great Stock Sale" sounds nice until you are actually in it. In that period post-2008, the news was always pessimistic and economies were still fragile. If you imagine a "green light" in a market crash to invest, then beware, it does it not exist.
Hence, A) is by far your best option.
The reason is that it is easy to come up with a plan now to regularly get invested than during an actual market crash.
I've got this post that helps you understand market crashes and strategies to prepare for it better. Hope it helps https://www.theastuteparent.com/2019/09/prepare-for-the-market-crash/
F. Just continue selling puts as usual but reduced exposure and amount at risk. If things get caught out, well I've got a discount on a great stock. Where then I can decide to hold it and wait for recovery or do some magic with it and earn along the way
I am not going to invest to hold nowadays. I am waiting for a strong positive signals that show that this is a strong support for market.
Once I got that level, I am going to invest 20% of my wealth, in all your options
I recently made a video about this. You can view it at
https://www.moneymaverickofficial.com/, it only takes a minute.
But honestly, I wouldn't take too many defensive actions unless you have a clear understanding of what kind of crash it is and how to prevent it (like the Big Short of 2008). That way even if you have to wait out a few years of good returns before preventing your market crash, you stiil come out on top.
Ultimately, time in the market is better than timing the market.