What should we do if financial crisis happen? - Seedly
 

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Asked by Anonymous

Asked on 03 Sep 2018

What should we do if financial crisis happen?

As new learner, I have now tried Stashaway, SSB and STI ETF all basic things that everyone is talking about. Just curious that what should I do if financial crisis happen globally ? Will I loss all the money?

I'm sorry if the question looks dumb

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Chris Chin
Chris Chin
Level 4. Prodigy
Answered on 04 Sep 2018

In a financial crisis, almost every stock is affected. However, you need to hold on to your stocks if you invested in good companies with good business fundamentals. Many novice investors sell off when stock prices drop in a panic response, while institutional investors would buy more at low prices or sell off to invest in other good stocks in their watchlist that has suddenly become dirt cheap if they have made enough profits before the price drop below his profits. During a financial crisis, It's your holding and buying power that helps you come out better and richer if you made the right investments.

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Yeap Ming Feng
Yeap Ming Feng
Level 5. Genius
Answered on 04 Sep 2018

There are people who view a market crash as opportunities.

Here are some stocks which you might want to take a look at: https://blog.seedly.sg/stocks-to-buy-in-the-next-market-crash/

I think fundamentally it is important to know what are some of the stocks and industry that generally do well in times of market downturn. In the mentioned article, companies such as Alibaba Group Holding Limited, Alphabet Inc. (Google) and ETF such as SPDR S&P 500 or PowerShares QQQ ETF were mentioned. Might be worth looking at. :)

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Diversification is key to surviving the next financial crisis and thereafter. You can still hold mixture of stocks, bonds, REITs and cash. Let Stashaway do most of the diversification and rebalancing for you. If you have at least 5-digit cash to invest in addition to cash set aside for diversification, can consider currency-neutral investments such as property and fine art.

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Lim Chun Long Jimmy
Lim Chun Long Jimmy

on 04 Sep 2018

Haha, yes Peer-to-Peer lending as investment can also be in the mixture.
Ai Kuen Leong
Ai Kuen Leong

on 05 Sep 2018

Is it really possible to invest in properties with just a 5-digit figure? Can share more? Appreciated!
Gabriel Tham
Gabriel Tham, Tag Team Member at Kenichi Tag Team
Level 8. Wizard
Answered on 04 Sep 2018

Theoretically with a roboadvisor you most likely will not lose all your money. You will likely see your portfolio in the red with a paper loss but unlikely it will be portfolio value = 0. Because if it goes to that case where your portfolio assets go to 0, it is more than a financial crises, more like a great depression. Then we will all be in deep trouble.

What to do during financial crisis?

Stay calm, stick to your plan. You can even pump in more money to ETF or stashaway and HOLD on to your portfolio. Ride out the downturn and you will see the up.

Do not panic sell

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Jayden Ng
Jayden Ng
Level 2. Rookie
Answered on 04 Sep 2018

when market fears, its the opportunity..in the long run you will reap...

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Khuan Yew Cheah
Khuan Yew Cheah
Level 2. Rookie
Answered on 04 Sep 2018

No, you will not lose all your money especially if you are diversified through a roboadvisor, government bonds and ETF. The ride downwards may be unpleasant but if you understand that over the long term, economies and markets trend upwards with occasional bouts of negative returns, then you'll be better able to handle the downturns. Fearing the next crisis and not investing with the appropriate risks could have significant impact on your retirement.

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