Sunday, April 9, 2017

Accepting what the market gives you

I am on investing note platform. Recently, investing note has a few post noting the possibility of market correction, and taking steps to prepare for the possible correction (e.g. buying low beta stocks at 52 weeks low, holding more cash).

Personally, I don't know if a correction is near. The market current seems more optimistic than in the past few 12 months. But, this was the market that fell from its high of STI 3,500 in 2015. Will more optimism lead to correction? No idea. I do note that the world economy is in a better shape now compared to last year, and the stock market reflected this.

Instead of preparing for correction, I will try to accept of what the market gives me and act accordingly.

If the market rises a lot and benefit me, so be it. As the market rises, more stocks may reach my target prices and I will start to reduce my position in them. In addition, I will be unable to find stocks meeting my criteria to replace the sold position. This lead to me holding more cash, if the market rise.

If the market corrects later and erase my gains, so be it. As the market fall, I may find new stocks meeting my criteria or average down on my stock holdings and hence increase my stock position. Currently, including CPF, I am around 60% in stocks. Thus I have ample funds if I am to buy more stocks.

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