08 Mar 2020
The odds of a recession coming are increasing. Should you sell all your equities now in order to buy lower later?
Covid 19 has been persistent. More and more bank analysts and financial bloggers have been signalling on substantially increased odds of an almost certain recession. For those who are already invested in the market prior to the downturn (be it veteran investors or those who recently entered the market), should you sell all your stocks now and buy back later (to get more shares at lower prices)?
Why it had to be a "sell all" vs "hold all" choice? It really is up to the investor' preference.
My pov, assuming all stocks in one's portfolio are good-quality counters.
Stocks that are alr in the red, just continue to hold on and get dividends, if prices fall to further attractive levels, average down. On the contrary, stocks that are still in the green, made a decision to reduce each stock's postion appropriately. For growth stocks that are more volatile, maybe trim down more while stocks that are more stable, trim down less. Lock-in some of the profits in case for a latter downturn, while continue to stay vested.
Meantime, build-up your warchest (savings from salary + accumulated dividends) and selectively nibble on stocks that are attractively priced to their intrinsic value.
Though I feel there will still be coming a heavier blow to the markets, when the U.S. cases finally rise exponentially, it would be a wrong strategy to do major sells since after reaching the peak, the positive rebound could come abruptly.
Make sure though that your stock companies were the right longterm choice. ETFs are better diversifies.
And still nobody knows the future, maybe everything goes rather smoothly and only the media and other multipliers arouse our 'catastrophic thinking' reflexes (acknowledging of course the sorrowful current deaths).
But even alm 'experts' from infectiology, epidemiology and economy at this point are not able to predict even the near future confronted with this new entity...
It is not necessary to sell all equities and buy them at a lower price later when there is a recessi...
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