October brings back images of stock market crashes, the falling of the sky and other doomsday scenarios on the scale of apocalypses. It is not surprising that weak employment data last Friday in the US has made equity markets jumpy.
Currently, I’m adopting a nimble strategy of being overweight in cash and eyeing the bluest of blue chips for medium to long term growth and not over-committing to having up to 80-90% of my investible capital in equities (as I used to in the past) as I’ve learnt the value of having some portion of your investible capital in cash and cash equivalents because the world changes too fast. Even quick punts can net one returns exceeding 2 x fixed deposits.
What is your current strategy in the light of October volatility?
Share with Panzer in the comments page.
Be well and prosper.
musicwhiz says:
Hi Panzer,
Quite simple – I buy and hold and allow volatility to open up opportunities for me to invest in good companies for the long-term. Otherwise, I choose to ignore Mr. Market.
For me, I do not engage in punts as I believe the probability of losing money (to commissions, no less) outweighs the chance of making a gain. Plus, it’s not worth the stress….
Cheers,
Musicwhiz
Vincent says:
I have not really done any action to my portfolio since Oct 2008, just RSP to some unit trust and STI ETF because of the fear in the market, and followed by the sudden surge. I now have 40%-60% equity-cash, plan to change it to 70%-30%. So, if this October is proven to be another major correction, I might start to buy some Sg bluechip, STI ETF, and unit trust. Let us know your action too
.
.-= Vincent´s last blog ..Guilty and Sorry =-.
panzer says:
Hi Vincent
I’m pretty much sidelined for the time being. Still about 25% equities and 75% cash/cash equivalents. Oct is still the time only to buy the very bluest of blue chips.
Be well and prosper.
panzer says:
Hi Musicwhiz
Value investing is a classic, if one is willing to invest to learn about the underlying business and company, in the long-term the upside from dividends and growth will have the potential to set you nearer towards financial freedom
Be well and prosper.
Wi$e says:
Hi Panzer,
I am actually hopeful some correction as in my opinion, market is over valued for time being. The current property rush is de javu. Fundamentally economy has not improved, US unemployment rate is still high, Europe is weak, China and Asian is not really power house yet, even in Spore there are talks Job Credit is to continue.
I am watching my list everyday. Invest wisely.
Panzer says:
Hi Wi$e
I tend to agree. There is still a long road to recovery, so it is not a given that the stock market will continue rising in a straight line.
Be well and prosper!
.-= Panzer´s last blog ..HLF Golden 55 Plus Fixed Deposit Rates =-.
Jo says:
I think the market is manupulated too much. Too many traders. Obviously the market is still not recovering well but look at the stock market and especially the property market. Too much greed.
Holding 95% cash and 5% shares.
Panzer says:
Hi Jo
I think so too. With economic fundamentals so weak, it’s mostly trading activity and liquidity that is fueling the rally.
Be well and prosper.
.-= Panzer´s last blog ..HLF Golden 55 Plus Fixed Deposit Rates =-.