Wolf Money(10 points stock market battle plan)
The market, as you know, is going through some heavy corrections. I have warned of the unwinding of Yen carry-trades having a profound impact on the market over the past year. I am not here to brag or rub it in at those who have lost money in the stock market. To me, there is no point crying over spilled milk. It is how investors react to the sell down that separates the men from the boys. I have no idea if this correction might turned out to be the start of a new bear market. I always believe opportunities only wait for people that are well-prepared.
Those who had plenty of capital sitting on the sideline. Congratulations, the selldown may represent the most attractive entry point since 2020. When the market gets sold off, index stocks are the first to get hit but also the first to recover. I am focusing only on the bluest blue chip of STI. These are the following steps to prepare myself for any opportunity which may arise from the selling.
1.) Come out with a list of blue chips which you have always wanted to buy but were deterred due to their high price.
2.) Work out a sum you want to deploy into the stock market. Money should be spare cash, free from any financial commitments and makan money.
3.) Study the fundamentals of those companies in your list in great detail.
4.) Jot down the 52 weeks, 3 years and 5 years lows of the stocks.
5.) Break the capital into 3 equal portions, something like doing DCA(dollar cost averaging)
6.) If the stock hits 1 years’ low, deploy 1/3 of the capital.
7.) If the stock hits a 3 years’ low, deploy another 1/3.
8.) If it hits a 5 years’ low, deploy the last 1/3.
9.) What if the stock goes to 10 years low? I pray for you. Obviously, the stock chosen might be fundamentally weak or one is unlucky to be caught in another once in a 50 years type of black swan correction. GFC did a drawdown of more than 50% before it bounced back. Most of other bear market corrections range from 20% to 30% with the average duration of a bear market to be around 10-13 months.
10.) It is important to keep a cool head, lose money is small matter but never lose your spirit. It is never about how hard a person falls, it is how hard the person bounces back from the fall without the loss of enthusiasm that matters.
Below is the list of STI constituents stocks. Becareful, not all companies are created equally, some index-link companies have pretty weak fundamentals.
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All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for education only. Buyer beware,do you own due diligence.
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