Sunday 7 February 2021

Why having a plan when investing is important!

Hi Guys, welcome back to another episode of SingaporeanTalksMoney! The recent run up of stocks have been phenomenal judging by the environment we are in and unemployment numbers.

"Be Fearful When Others Are Greedy" Warren Buffett

Warren Buffett once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.” Since the price is what you pay, and value is what you get, paying too high a price can decimate returns. Judging by the current prices, particularly tech and stocks that have build momentum due to future predictions, many are really at a very high price. People are still debating if they should enter now as they feel that the stock market might just go even higher in 2021.

Increase cash holdings

With the soaring prices, some people have chose to take profits to keep some cash on the side in case of any market crash, to take the opportunity to scoop shares up at a more reasonable prices. I think that’s a really good approach and

Even with the market at all-time high I would still continue with my regular savings plan to continue to stay invested in the market and at the same time maybe save a bit more. I understand that having a higher income would allow me to invest more and that we should focus on increasing our income instead of trying to pinch and save but judging by the environment currently it is not easy to find another job and I would think that on my side I would be trying to cut down on expenses.

What if the market crashes in 2021?

Well this question is on everyone’s mind. For me I would be disappointed because all my gains from 2020 would be reduced and even though my previous portfolio was also at a loss of about -2000 to 3000 getting it up to a profit of currently $7000 was amazing for me. I would definitely like you to remain that way of having at least a profit and staying in the green for my portfolio.

Investing in the stock market is all about managing your emotions I’m glad that I’m not swayed by my emotions easily, at times definitely I will think about the time when I should have bought more or when I should have sold off my holdings.

Declining Prices

In the past few weeks/days, prices have been dropping as Gamestop and AMC goes up, some have said that it could be the hedge funds selling off stock holding to cover their losses and investor selling off to support WallStreetBets by making purchases of Gamestop through selling of their current stock holdings. No matter what, it has been a sea of red for my current stock holdings. Presently, things have kinda stabilised and recovered in a sense but GME and WallStreetBets will definitely go down in history.

Having a plan

If you are anticipating a market downturn, it is very important to have a plan in place so that you can action on it immediately if anything were to happen. For me, my plan is the same which is to continue with my regular savings plan. My plan kind of sounds boring because it is very consistent but I hope that in the long term you prove to be what makes me profitable because I follow a very disciplined investing style. After experiencing the crash in March 2020 I realised that what you say right now might be different from what your actions will be and so having a plan in place will enable you to put into action.

I did not have a plan back then and did not buy any stocks except from my regular savings plan. I do regret not having a plan and in 2021 and moving forward I hope I have spare cash on the side to be able to deploy it when needed.

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  1. I think you are trying to increase your income in the form of doing blogging and Youtube at the same time, however, apart from blogging and doing youtube, I believe that there are many different ways and it is not limited to having a job

    1. Hi FinanciallyFree, that's right, I am actually also trying to build up my YouTube channel and at the same time push out the content on the blog as well. Definitely, there are a lot of many other ways to earn an extra income, the possibilities are endless. For now, I am trying out these 2 possibilities. Thanks for dropping by!

    2. Yes, I am a huge advocate of increasing our income when we are young, and I am also looking at blogging and youtubing for an increase in income, however I not been doing any of it as I am doing more of reselling online right now, just looked through your youtube channel and I definitely see a lot of value that your channel is bringing, hope to learn more from you!

    3. Definitely, reselling is a huge thing today as consumer have many digital platforms to source for items and with some things being limited edition, value can be adjusted per supply and demand. Wishing you all the best! Thanks for the kind words:)

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