facebookShould I sell my stocks before the upcoming bear market? - Seedly

Anonymous

18 Apr 2019

General Investing

Should I sell my stocks before the upcoming bear market?

Discussion (2)

What are your thoughts?

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Josh Tan Jian Liang

22 Feb 2019

Co-founder https://theastuteparent.com at Promiseland Independent Pte Ltd

Hi Anonymous, take a look at this: The cash holdings of Warren Buffett's company.

What you can learn/ moral of the story:

There is NO NEED TO SELL all your stocks before the bear market TO WIN!

Use your cash to buy during a market crisis as shown above. There's no need to go fully into cash because that's a lot of pressure on you. Imagine the potential regret if the market moves up for the next 2 years.

Stop buying when its bull and start buying when its bear. It's easier, makes sense?

I've covered this topic on "What is your RIGHT Investment level".

Besides how much to sell, how much to keep invested is also formulated.

Take care and good luck

Hi! That is a really tough question to answer - after all, if we can all accurately predict that exact date and time that bear or bull markets occur with almost 100% certainty, we would be extremely rich by now!

The problem lies in the inability of everyone - financial analyst and regular joes like you and I, to consistently time the market, to predict when does such bear markets occur and for how long. Sometimes, bear market signals may turn into false alarms, and may instead turn into a strong rising bull market and vice versa.

The largest gains in the stock market usually occurs just over a few days, and missing just 10 or 20 of the best trading days within the trading year could result in the erosion of your respectable market returns in a buy and hold strategy by more than 80%!

Hence, if are able to predict that the bear market is about to occur, then it is a strong indicator that you should sell your stock holdings within stocks that are sensitive and correlate closely to the market (aka beta close to 1 or more). But it is in my opinion that if we are unable to confidently predict such an occurence, you should perhaps seek more professional advice regarding the potential risks and losses you may incur doing so.

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