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QuestionsCategory: Portfolio ManagementWhen to enter back the market?
Zhi Ming Cheah asked 2 years ago

Global market is currently having a correction, at least 10 % in their index up to more than 30%. My question is, when shall i invest again? My broker point of view are : 
1) Brent Oil must 1st recover back first and don’t break new low.
2) Dow 30 must come back above 21,000 points, if not it will drop even further.
Then only enter back market.
What are your point of view?

Victor Chng replied 2 years ago

It is usually hard to time the market bottom so the tranche strategy will be more appropriate. Currently, I think the market present a lot of opportunity and we are taking it slowly to average down our purchase.

Zhi Ming Cheah replied 2 years ago

Thanks for the response. May I know, is there any additional criteria you would look on for company that will recover quickly?
– cash rich company?
– sector specific like financial and consumer?
– low fixed asset to total asset(%)?
– tech related stock to 5g or related to social media?

I am currently investing in Malaysia market, even the best fundamental tumbles down a lot. Using the financial quadrant, it seems impossible to find a stock that will meet the criteria as majority of their latest qrand the upcoming qr would definitely have a loss in all aspects( revenue, profit, etc). Therefore, should i ignore the latest qr and focus on their past performance, then put in my watchlist? Perhaps, based on their more on their business model rather than financial to justify whether that it is sustainable for them to survive this recession?

Zhi Ming Cheah replied 2 years ago

latest qr and the upcoming qr*

Zhi Ming Cheah replied 2 years ago

latest qr and the upcoming qr*

Victor Chng replied 2 years ago

Hi Zhi Ming,

Buying cash rich companies definitely have an advantage. The most important thing is that some companies are temporary being affected by the virus issue. Once the virus case is over, they will be the one that bounce back the most.

It is important to look at a longer term horizon at the current situation and cash rich companies definitely have higher chances to hold through.

2 Answers
April Lo answered 2 years ago

I wonder the same question too. Bought little chunk of stocks when the market crashed about 10%, ready to average down. According to the webinar held by Rusmin and Adam last week, we may buy in tranches when the market crashes by 10%, 20% and 30%. Looking at the situation now, it really presents opportunities to average down. But what if I buy in and then I no longer have the capital to average down? 
Would love to hear from others on their strategy

Victor Chng answered 2 years ago

Hi April
If you have limited capital, the entry of the your first purchase is important. You have to make sure that when you enter the stock in undervalued already.