Friday, 4 March 2016

4D market rules in a crash (scroll to the end for entertainment)

My mom likes to call playing the stock market gambling. I rebutted that it is NOT gambling, because you know the cards dealt to you and there is the element of control which is absent most of the time in gambling. This 4D is not your toto 4D. These 4Ds are some of your control.
  1. Don't catch a falling knife.

  2. Don't capitulate (too late) when there's a sell-down frenzy.

  3. Don't try to average down, especially with margin.
    Cos this is like number 1+2 combo which equates money suicide. But is short-selling with CFD a good idea?

  4. Do diversify.
    Do not put all excess cash into 1 stocks, do not make up your portfolio with only stocks, do not buy stocks from only one market or sector. If you don't know which to pick, ETF is a good choice.


Gambling is when you don't exercise control, don't have a plan and don't strategize your actions.

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Stocks portfolio was down 29% at the bottomest of this crash in January, now it stands at -14.5% (still bad...). I haven't sold a single counter but added a few counters to my portfolio. Still waiting for the right time to do some rebalancing.

Fickle sg market.

Is the worst over yet? :/

STI at 2837. Comparison to last year's high for the blue chips.
As we can see that there's still a number of blue chips in the red (more than 30% down from their highest in bull market). Cheap buys have decreased markedly. Those in yellow are the resilient "kambings" that were not greatly affected through these 4 months. Read Blue chips still in red sea

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