Gameplan for Downturn

[First post on 21 May 2022, updated on 17 Jun 2022]

Plan for purchase during downturn

1) Index Buying: Additional Stake at 12% lower

    1st Stake: When S27 (S&P 500 ETF) hits $383, use SRS to buy. 

    2nd Stake: Buy when VWRA reaches $85

    3rd Stake: Buy when VWRA reaches $75

Point 1 stopped. I changed strategy to wait for S&P 500 to either (1) wait for 33% YTD drop first or (2) for market to bottom. How to know market has bottomed. One way is to see higher bottom in S&P 500. This approach will miss the market low, but it prevents me from buying too soon and has lower psychological pressure down the road. 

US stocks

2) Google: Additional Stake at 15% lower

    1st Stake: $2,300 - Bought

    2nd Stake: Buy when $2,000

    3rd Stake: Buy when $1,700

3) Interactive Brokers: Additional Stake at 15% lower

    1st Stake: $58 - Bought

    2nd Stake: Buy when $49

    3rd Stake: Buy when $42

4) Meta: Additional Stake at 15% lower

     1st Stake: Buy when $185 -- Bought

     2nd Stake: Buy when $157

     3rd Stake: Buy when $134

Thinking as at 17 Jun 2022

As interest rate and inflation rise, US economy should slow. As Fed interest rate rise and economy showing evidence of slowing, stock prices face more downward pressure and earnings may slow or drop.

I think that the market has not bottomed yet. Of course, I may be wrong.

My current allocation is around 50% stock; 50% non-stocks. So, if market has bottomed, I will enjoy some uplift. If market dive, I have cash to deploy into market.

In the meantime, I will buy SSB (Singapore Saving Bonds) in batches. As one can always redeem the full principle of SSB, its value will not decline like traded bonds, as interest rate rises. 

Others

REITS -- if risk-free interest rate rises to 3.5%-4%, will reits like MIT, MLT retain current prices? I think their share prices are likely to drop more, so that they can offer significant spread between dividend yield and risk-free interest. Will look at these reits when they can offer 6% yield.

O&G -- I bought some CNOOC, (smaller) Rex Intl and Occidental Petroluem. These are bought as hedges for the high inflation. Will know in the future if these purchases are correct or not.

ARA Hosp Trust -- Bought a small position recently. It's a recovery and inflation hedging play. Its share price is around the same as 2021's; there should be more demand for hotel stays in 2022 summer based on reports. In addition, prices for hotel stays should rise as inflation rises.