Tuesday, November 7, 2017

WILL YOU HOLD A STOCK OF P/E=100?


singapore stocks
Dear readers, I was watching the MoneyMind show on 4 Nov 2017 which featured the finale of an investing competition. The judges were asking the contestants what their best investment strategy was; the contestant with the best answer would walk away with $10,000. One of the contestants revealed that he would hold a lot of cash in his portfolio. That prompted one of the judges to ask whether the contestant knows by holding cash, he would be like holding a stock of price-to-earnings (P/E) ratio of 100 hence in this context whether he would like to hold cash?

For me, I think holding a large chunk of cash in one’s portfolio makes good sense as compared to a stock with P/E of 100; the risk is lesser (only inflation risks which would make the cash devalue). Holding good size of cash in one’s portfolio is wise as cash is king when stocks markets correct since the investor holding lots of cash would then have many opportunities to buy good equities at good prices. Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.
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