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I SENT THE following newsletter to our Value Investors Club members two weeks ago. I wanted to share my experience and my actions in the current market condition. The BigFatPurse team thought that this newsletter could be extended to our readers too. We hope that you could glean some insights from it. Below is an excerpt, and not the full newsletter. |
My Expectations Were Miscalibrated
When I first invested in stocks, I was anxious to see my investment grow.
But the stock market does not reward according to one’s desires. It was slow when it comes to investing. I lost some patience and my interest waned.
When the market corrected, I ended up even more disappointed.
I was expecting to make money and not lose any.
Disheartened, I hopped to another strategy. In fact, I hopped from one to another as soon as I tried it and it ‘didn’t work’.
The reality was that I did not stick long enough to a strategy to review if it really worked.
I know you would not have the same conviction in the CNAV strategy as much as I do because I was the one who developed it.
It is easier hop onto another strategy after you have met some set back with CNAV stocks, especially in market conditions like these.
It is ok. It is part of the learning journey. A self-discovery process.
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Avoiding Market Crashes |
How Far Down Will It Go
I am quite confident the drop will not go below the 2008 low because I believe in the Dow Theory for this aspect. Each stock market low should not be lower than the previous one, provided the economy of that country has grown over the years.
I think the worst STI would go to would be around 1,900, based on just simple trendlines.
That said, the market could still potentially rebound without getting to that point.
What will I do?
Don’t sell.
Buy slowly.
This article was originally published on www.bigfatpurse.com, and is republished with permission.
