DOW .. Down ..Down.. Up ..Up...

Today mark the last trading day of Oct 2018, Yes! Indeed, it's a "choppy and volatile" month for STI and world markets. DJ could swing more than 600 points intra-day from positive to negative. Well, that is really the characteristic of "Mr Market", it swings like a pendulum.

Again, many of my friends are asking me if I am selling my stock as the market seems very volatile and 'risky" ( for them ), but my answer to them is the same, "No", I am not selling but just do some "portfolio reshuffling " on some of my holdings ( which I will update more in my next Dividend and Portfolio Update).  In view of such "crazy market ", some might be thinking of getting out of the market and holding 100% in cash. I am not so sure if this is a wise move, of course, if one could avoid the "40 days with biggest losses" from the market, he/she could really achieve an "extraordinary" result, but in reality, can we really do that? A big question mark.



Missing the Best and Worst Days (from IFA.com)

"University of Michigan Professor H. Nejat Seyhun analyzed 7,802 trading days for the 31 years from 1963 to 1993 and concluded that just 90 days generated 95% of all the years’ market gains — an average of just three days per year.1

The expected return of markets is positive and essentially constant. Therefore, investors who are out of the market for any period of time can expect to lose money relative to a simple low-cost and tax-efficient buy-and-hold strategy."

These are the two pictures I like the most to describe the "characteristic" of Mr Market:



"Psychological create 90% of the market "



image credit to jasonzweig.com


"Don't count your chickens before they hatch", but I am too free that counting the dividend to be collected in next quarter before the result even being announced. Hahaha...:D
This is the only motivation for me in such a choppy market where I think most of us also seeing our portfolio in RED.


This quarterly received dividend will make me continue to stay in the market, of course with some "war chest " ready to take advantage if the market continues to fall or in "fire sale " like what my friend "B" described in his latest blog post :

"The Great Singapore Sale Stock Market Is Here Again"



One shouldn’t make a “sudden or panic” move, investing in stocks rewards you in the long term and these day-to-day changes in the market shouldn’t affect you. Stretch your investing horizon and understand that “volatility “ is just merely a characteristic of Mr Market. Let the magic of “compounding” take effect in the long run.


Cheers !!





Comments

  1. Yes, indeed. I agree with all you say here. It surprises me when, presently, I hear income investors freaking out and talking about going into cash etc. It's time to be calm, switch off the noise and pick up some value.

    ReplyDelete
    Replies
    1. Hi SingaporeDividendCollector,
      Thanks for the comments , yes , " Price is what you pay , Value is what you get" , value only emerge when there is drastic drop in price ... especially during crisis , that's the time where we could really buy "value stocks"..
      Cheers !! :D

      Delete

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