Wednesday, February 7, 2018

MARKETS CORRECTION: WHAT SHOULD INVESTORS KNOW AND DO NOW?

Singapore stocks markets corrections
Dear readers, I know the Singapore stocks markets have performed not good at all for the previous two trading days. And I believe what every investor has on their minds now is whether the stocks markets are going to crash soon. It is an inevitable feeling since when stocks markets go into a bear market; it really takes some time for the stocks markets to go down by some percentage on a daily basis. Hence faced with such a situation, investors naturally thought of doing any of the below.
1) Liquidate profitable investments from your portfolio, take profits and come back to the markets another day.

This is a good approach since we would be freeing up some capital from our investment portfolio, realize a profit at the same time and we could use the monies to buy good stocks at good discount.

2) Cut Loss

Some investors do this to cut some losing stocks in their portfolio. To me, one should always choose this option only if the investor is not able to hold their monies for long in the stocks markets: e.g. the investment is made on borrowed monies. Since this is really giving up and realizing a financial loss.

3) Hold one’s investment

I think this will be another good option beside option 1) as if one invest in a good stock, one should realize that markets go up and down but that should not affect the fundamentals of a good stock. In fact, investors may choose to buy more of the good stocks (refer to option 4 below).

4) Buy more good stocks at a good discount

I believe this is the wisest option in light of the contrarian style of investing: buy when others are selling and sell when others are buying. One could get a good discount at market corrections like the current ones. But there is one caveat, choose a good time to bargain hunt these stocks else one will end up “catching a falling knife”. 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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