I hate China market !!!!
This was what one of my followers from Singapore told me. I am not surprised not upset considering the slew of negative news (more to come) hitting the headlines.
From making profits to suffering losses of 20-50% of their portfolio, I can well relate and understand the sentiments as an investor!
Ok, let's put aside the emotions for a while and try to see things objectively ! Nobody can say for certain that the market is going to continue soar days after days, weeks after weeks ! On hindsight, now that many are feeling "paralyzed" either too scared to sell or already sold and still feeling soar about the losses may know that there were actually signs as early as last year from the Chinese government !
To buy or not to buy ? This remains the question of many as I am still receiving emails and PMs to look at certain stocks ! I can't promise I can answer all of your questions but I will try my best.
Apart from analysing the China Tech stocks, as an investor , it is important that we learn to spread our eggs into different baskets. So, there is geographic risks - ie, diversifying your portfolio into different countries. Well for me, I have stocks in SG, HK, CN, US and others.
Within the countries, you can further split them up into sectors such as consumer staples, healthcare, tech , etc. Now, if you put 100% of your eggs into tech stocks and when the market goes against you, then it is inevitable that your losses would be much higher than others. On the contrary, you also would be laughing yourself to the bank should the market goes to your favor.
Nobody can tell you for sure that the market has bottomed regardless of how sophisticated their indicators are. Not forgetting the market operates based on the collective emotions of these traders/investors. The general sentiment amongst the Chinese equity market is one of FEAR as many retail investors are speculators , some are not sure what they are buying and choose to follow blindly their leaders !
So, if you have 10,000 capital now, should you allocate into 5 parts of 2000 each and average down these tech stocks individually or geographically is a question that ONLY you can answer. Are you someone who likes to do research, analyse their financial performance or prefer the professionals to handle everything and you only be responsible to do the buying. If it is the latter, then choosing an ETF may be a better option. Again, within ETFs market, there are homework that you need to do as well in terms of market cap, performance history, expense ratio, etc.
No markets in the world goes up nor down indefinitely. There will come a time the market will stop bleeding and small players may come in to nibble. After some time, more will join the bandwagon before it starts to take off. This consolidation phase can take weeks, months or years and that is crucial as it determine what is your investment timeline. Are you after your profits within a year , 5 or 10 years. Each period will then determine your strategies and the type of assets class to choose from.
I hope this is helpful in some ways. Let's not knock down the good companies because some bad ones are being hit hard now. Be extra cautious now and patient.
From making profits to suffering losses of 20-50% of their portfolio, I can well relate and understand the sentiments as an investor!
Ok, let's put aside the emotions for a while and try to see things objectively ! Nobody can say for certain that the market is going to continue soar days after days, weeks after weeks ! On hindsight, now that many are feeling "paralyzed" either too scared to sell or already sold and still feeling soar about the losses may know that there were actually signs as early as last year from the Chinese government !
To buy or not to buy ? This remains the question of many as I am still receiving emails and PMs to look at certain stocks ! I can't promise I can answer all of your questions but I will try my best.
Apart from analysing the China Tech stocks, as an investor , it is important that we learn to spread our eggs into different baskets. So, there is geographic risks - ie, diversifying your portfolio into different countries. Well for me, I have stocks in SG, HK, CN, US and others.
Within the countries, you can further split them up into sectors such as consumer staples, healthcare, tech , etc. Now, if you put 100% of your eggs into tech stocks and when the market goes against you, then it is inevitable that your losses would be much higher than others. On the contrary, you also would be laughing yourself to the bank should the market goes to your favor.
Nobody can tell you for sure that the market has bottomed regardless of how sophisticated their indicators are. Not forgetting the market operates based on the collective emotions of these traders/investors. The general sentiment amongst the Chinese equity market is one of FEAR as many retail investors are speculators , some are not sure what they are buying and choose to follow blindly their leaders !
So, if you have 10,000 capital now, should you allocate into 5 parts of 2000 each and average down these tech stocks individually or geographically is a question that ONLY you can answer. Are you someone who likes to do research, analyse their financial performance or prefer the professionals to handle everything and you only be responsible to do the buying. If it is the latter, then choosing an ETF may be a better option. Again, within ETFs market, there are homework that you need to do as well in terms of market cap, performance history, expense ratio, etc.
No markets in the world goes up nor down indefinitely. There will come a time the market will stop bleeding and small players may come in to nibble. After some time, more will join the bandwagon before it starts to take off. This consolidation phase can take weeks, months or years and that is crucial as it determine what is your investment timeline. Are you after your profits within a year , 5 or 10 years. Each period will then determine your strategies and the type of assets class to choose from.
I hope this is helpful in some ways. Let's not knock down the good companies because some bad ones are being hit hard now. Be extra cautious now and patient.
Comment:
I will take a nibble as the closing candle is a bullish one and I would prefer to average down than to wait for the real bottom for which it is hard to predict.
Comment:
added some last night