Saturday, 18 June 2011

Waiting for stabilization

Selling sentiment is still high as STI has plunged further again today. Now is the time to wait out and observe for the market to stabilize eg. lowering of selling pressure, before picking up the bluechips with good P/E and NAV ratio. Let's hope that there won't be any really bad news to cause a major upsetting of the market. Things are gloomy but asian economy should be picking up.

Using the strategy of 'buying down', I have foolishly attempted to catch a falling knife last week but luckily it was one instead of two. Lesson learnt: I ought to watch out for reversal signals to confirm the pit and NOT try to guess when it is hitting the pit. The silent descent... lurks danger?

Funds are generally holding up well despite the market downturn. If they get more impacted by the STI plunge, picking up funds would be a viable choice.

Bond is by far the safest among all the investments. Fixed deposit interest is crap unless we are looking at foreign currency's interest (that comes with risks though not as high as the stock market in this bleak season).
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A good article here by Music Whiz on Averaging up or Averaging down.

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