Markets falling? No problem, throw in more money!
Lost money in the stock market over the past 6 months? It’s ok, you just need to put in more money!
(This is Tip #6 in the Surviving The Recession Financially series)
Even Warren Buffett has said it - equities will outperform any other sort of investments in the next 10 years, starting today. What is needed, really is for us to stomach that loss (or that fear of loss) and invest in the market in a consistent, logical manner.
Easier said than done, of course, since many of us likely has had our gains totally wiped out in the past months (or even gone way negative).
Re-evaluate your Portfolio
Start by re-evaluating your investment portfolios and taking a little more risk if possible. If you have investments in bonds or other fixed income instruments, you might consider shifting some of these to equities. Similarly, this is also a good time to liquidate other forms of investments that may have held its value thus far and reinvest it into equities.
Personally, I am moving my entire wine investment portfolio to the stock market. Of course, this investment advice might not apply to your specific needs, so it is just a guideline.
Singapore as a whole is expected to recover from this downturn quite strongly, and can even do it as early as this year!
Invest Regularly!
Of course, with the market bouncing with every small news, it’s like a roller coaster ride. How do you ensure you buy at the best price?
The short answer is, you can’t ensure that, but the objective here is not to time the market and buy at the best price (and beat the market performance). Indeed, the simple act of surviving the market reaps you very decent returns! Hence, you should start off with disciplined, regular investing.
Invest every month, if you can. If not, make it every quarter, or every half a year. Buy no matter what the price. By doing this, you ensure dollar-cost averaging, which helps you buy more when the price is low, and buy less when the price is high.
Are you looking to invest today? You should be!
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