Bear market

A bear market is a condition in which securities prices fall and cause negative investor sentiment

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Bear market

Yes: https://www.todayonline.com/singapore/trade-war-hit-singapore-most-se-asia-recession-2020-possibility " In the meantime, Singapore’s domestic demand, which includes household spending and the construction industry, has remained resilient and could offset the fall in trade. The construction sector will be held up by ongoing public infrastructure projects such as the 21.5km North-South Corridor by the Land Transport Authority. However, the growth of residential construction activities has eased, and demand for durable goods such as motor vehicles has weakened. The Monetary Authority of Singapore could remove the appreciation bias of its S$NEER, a trade-weighted basket of currencies against the Singapore dollar, ICAEW predicted. " In short, we could : 1) Increase domestic spending 2) Use S$NEER to control SGD level against other currency to control our export / import economy to ensure stablity. Since worry is not helping and we ourselves can't do much. Suggest for one could: 1) Try to save more emergency funds, 2) Relocated investment into safe / guaranteed but lower yield investment for the time being 3) Upgrade own knowledge and skillsets 4) Cut or reduce unneceesary wastage and spending / luxury spending 5) Stay resiliant and focus! We will definitely be affected but as always, we'll always do our best to ride to any storms and succeed because we are always Survivors!

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If you're investing for the long run, then it doesn't matter when you start investing. Don't time the market. Instead of going in with a lumpsum, try stretching your capital injection over 6 months or so.

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Junus Eu
Junus Eu,
Top Contributor

Top Contributor (May)

Level 8. Wizard
Updated 4w ago
From April 2019, MAS has gone ahead with a proposal to increase the insurance coverage for Singapore-dollar deposits under the Deposit Insurance Scheme (administered by the Singapore Deposit Insurance Corp (SDIC)) to $75,000 per depositor from the current $50,000 . According to MAS, the new coverage amount will fully insure 90% of depositers . This is also why I tend to spread my savings among a few high yield savings accounts

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I think it's less that people want a crash to happen but more that they believe it's inevitable, and thus, want to take advantage of it. Their existing investments and job security may probably be affected as well. And because they fear buying high, they'll wait for markets to drop.

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Nicholas Tan Yi Da
Nicholas Tan Yi Da,
Level 2. Rookie
Answered on 24 Apr 2019
Yeah you are definitely correct in a sense ah, i mean thats in theory and seems at first glance to be true. It easy to relate economic downturn to lower prices for etfs/equities, but u have to understand may not necessarily happen too. Not sure if u study economics( i studied in jc ah), like everytime there must be this term 'ceteris paribus', means certain factors must be there for some stuff to happen. So not necessarily bearish/downturn then buy. For me maybe i just monitor the prices, like at the historical chart before i set a price in comfortable to buy with.

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Leonard Tan
Leonard Tan,
Level 6. Master
Answered on 19 Apr 2019
Saw a bearish comment online which was trending ! I will let you guys do the rationalizing yourself if its fair and apt in your opinion. I myself see great truth in many of the statements. I myself believe the whole promise of the business model innovation was good, but many of the details that made the model attractive(legally not employing drivers) is now being picked apart by countries govt regulations and unions. Costs therefore are not as low as ridesharing companies like Uber would like to be. As much as worldwide growth and horizontal growth into other side domains(food delivery) is what Uber is looking at to eventually make turning profitable easier, there is a limit to its current growth potential seeing how the global ridesharing and food delivery landscape has grown to saturation in pretty much every country. The fact that Lyft is specialized on ridesharing alone just makes its prospects more confined to current situation of the battle of ridesharing against regulation.
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Sandra Teo
Sandra Teo,
Level 6. Master
Answered on 16 Apr 2019
Hello! In a bear market, the safest strategy is to hold cash or invest in stable financial instruments such as short-term government bonds. This is an extreme method, and not often used. Investors usually take a defensive strategy by investing in defensive stocks , which are often large companies with strong balance sheets and long operational history. These companies have strong financial position that will allow them to meet ongoing operational expenses and thus survive the downturn. I would avoid small growth companies because they have lack the financial security required to survive downturns. By nature, the financial markets are impacted by a recession. Therefore, investors may want to invest in sectors that thrive on recession, such as consumer staples and commodities. Consumer staples are typically the last products that a household removes from its budgets, therefore making it one of the safest. As economies slow, demand slows and commoditiy prices tend to drop. If investors believe a recession is coming, they'll often sell commodities, which drives prices lower. However once the economy moves into recovery phase, the growing economy would need inputs including natural resources. These needs grow as economic output grows, therefore pushing up the prices for such resources.

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Leonard Tan
Leonard Tan,
Level 6. Master
Answered on 11 Apr 2019
A very sound question indeed! Sadly, a bull or bear market is most often highly sentimental. As you probably already heard, the global economy is at its late stage cycle nearing recession. Therefore logically you would expect a more bearish outlook in a longer horizon. However there have been many positives of late: Progress in Trade War suspension and resolution, Positive US Job Employment Data just last Friday, Chinese PMI Manufacturing surprise(despite Trade War Disputes). All these positive indicators seem to suggest we might enjoy more bullish market in the short run- which is why the markets has been enjoying a run up recently from the lows in late 2018.

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Richard Woon Tian Jun
Richard Woon Tian Jun,
Level 6. Master
Answered on 10 Apr 2019
A rather typical assumption is that the industries least affected by a recession are those that are tied to human necessities - our need for water, food, healthcare etc. So some of the traditionally strong buffer against bear markets are: 1.ultility companies (water, gas, electricity), 2. healthcare organisations and their suppliers (that are tied to traditional basic heathcare eg. hospitals, not high SES boutique beauty/skincare/plastic surgery) 3. consumer staples (food providers, agriculture), 4.and arguably Apartment REITS as well (in singapore's context, we have the Ascott Residence Trust, but I wouldn't truly consider that a defensive REIT given that it has alot of Apartment hotels overseas and expensive condominium complexes in Singapore, so not a truly apartment like a normal HDB flat) Basically, these industries have low beta, meaning that their stock price volatility is not so much tied to the market's overall performance, but more of their own demand and supply. Meaning when markets move up, they might move down or up slightly, but when markets move down, they may move up significantly, or down just slightly, or have no change at all. However, being traditionally defensive is not the one gospel truth in the financial markets. Take a look at Austrialia's recent downturn, their consumer staples shares were one of the worst performing in the market. Being defensive will not save you if consumers are looking to cut back on spending on everything. https://www.bloomberg.com/news/articles/2019-04-04/even-vegemite-feels-the-bite-as-australia-s-downturn-hits-stocks So my advice: perhaps look towards fixed income instruments - sometimes our fixation on equities leave out the world's largest markets that can provide that risk protection and diversity you need in your portfolio. A good government/corporate bond of reputable status and healthy Cash Flow statement can provide you the returns you need when everything else heads into the red.

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Some inflation is always a good thing. It shows a growing economy. But too much is bad, shows a lack of fiscal policy and deflation (or negative inflation) is bad too, shows that the economy is slowing down and people get worried that companies and countries aren't making enough profits. They might lose their jobs, foreign investments pull out, etc.
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