This Is The Fastest Bear !! 2020
|image credit to Bloomberg.com via seekingalpha.com|
We have experienced the fastest and furious " Bear" ever in market history. It only took less than 20 days for Dow Jones Index to reach the bear market ( i.e corrected more than 20% from the peak).
This is the situation we never experience even in GFC 2008/09. We have seen some of the REITs dropped in double digits % continuously in a few days and we can see that most of the REITs are having 50% sales now.
Asian markets ( except Nikkei ) i.e STI and HSI are both in GFC level in term of the long term mean valuation, as well as FTSE100 and DAX.
Finally, S&P500 and DJ also dropped below mean level, but still far from the level achieved in GFC in 2008/09. We will need another -21% to reach -1SD. Bear in mind that it has also corrected more than -30% from the peak.
How about S-REIT
FTSE ST REIT Index also at -2SD now but is still not at the level achieved in 2008/09 during the GFC where it was caused by " subprime " and hit the property sector badly.
At this moment, we can see that the worst affected REITs are mostly second liner and REITs which are having foreign assets in Europe and the US.
Is It Good Time To Invest Now?
I don't have a crystal ball to tell but if you have "holding power" and are using the "spare cash" to invest right now. I think the odds are on your side and the probability to win the market in the next 2 years is high. Provided you have also choosing the right and fundamentally strong companies which you think would survive eventually in this Covid-19 Crisis.
Below is one of my favourite chart :
|image credit to Bloomberg.com via topforeignerstock.com|
Except 1929/30/31 where global economy was having Great Depression, chances of market rebounded strongly after -30% dropped are very high.
As I mentioned before, although the market is in crisis level in terms of valuation now, the battle with Covid-19 is not going to be easy and ended soon. We still need to wait patiently for the market to recover and reverting to mean and the market may continue to drop for a while right after you pressed the buy button since nobody knows when will be the "bottom". I still stage my buying in phase at this moment.
Quote Of The Day :
"The best values today are often found in the stocks that were once hot and have since gone cold" by Benjamin Graham