I did a stress test on my portfolio based on my perceived worst case scenario that may happen. The plunge may not be worse than 2008/2009 in super low interest rate of 0.05% and higher inflation rate of 5% environment. The stock market is more likely to be supported as investors simply can't hide themselves too long in Cash.
If you poll or observe the people around you; there are still too many people sitting on lots of cash waiting for opportunity to enter the stock market. They will soon rush in to absorb any selling pressure for yield stocks.
These people know that Cash is not King until you are able to enter the stock market to the ride with the next bull up ; otherwise your Cash is rotting in the bank or money market.
Unlike in 2008/2009, this time I will have more fire powers to rebound with the next Bull so I must sharpen my mind and open my eyes wider to spot the next market gems.
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Hi CW8888,
ReplyDeleteI got the same result as you. But I reached my conclusion based on STI chart and elliot wave. Basically, the stock market will always have a higher low in order to move up higher.
Zac
Hi CW,
ReplyDeleteHighly agreed. Cash is not king if you let it rot in the banks. Opportunities must be taken when they appear.
Calvin
http://www.investinpassiveincome.com