I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

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Tuesday, 6 September 2011

Cash is King. It is back!

Just For Thinking ....

We have been seeing some people have already cut their losses or cut short their profits to stay cash in hand. They believe that in the current market condition. Cash is King. It is back in fashion.

We have to fully understand that Cash is King only when we can get back into the market to scoop up enough quantity of under valued stocks when market has fallen beyond recognition. But, seriously do we have the ability to recognize that market has fallen beyond recognition. I admit that I can't so I choose not to cut losses to lock in negative returns in my portfolio.

We will never recover from locked in negative returns in our portfolio by holding cash in hand. This cash must be invested back into enough under valued stocks for recovery. It is only when we have succeeded in getting into enough under valued stocks near market low; then only Cash is King.
Posted by Createwealth8888 at 19:37
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8 comments:

  1. Anonymous6 September 2011 at 20:48:00 GMT+8

    Well, if we have no more firing power $$$, we can hedge. How about holding 5 lots instead of 8 or 10 lots?
    On the other hand, if you have reserve firing power, you are actually hedged already.
    That's why we always must keep some reserve ammunition for the next war. We all should know the next war can come upon us very suddenly. And also we must be prepared for war after war, after war...........

    ReplyDelete
  2. Kappo6 September 2011 at 21:37:00 GMT+8

    Uncle.... I am still sitting tight... may need super glue to glue me to seat.....

    ReplyDelete
  3. AK716 September 2011 at 23:33:00 GMT+8

    Read?

    Should we be staying invested or in cash?

    ReplyDelete
  4. coconut7 September 2011 at 10:58:00 GMT+8

    hi temperament i disagree. i like to use all my firing power in a war. be it a strong or weak enemy. same for trading and investing.

    i make sure i win this present war before i think of the next war.

    ReplyDelete
  5. coconut7 September 2011 at 11:06:00 GMT+8

    so i agree with CW, but cash is also king in the present market condition if you are a trader. in fact you would have more cash than you have if you can go short, so long as you have a sure way of getting back into your long position when market recover.

    ReplyDelete
  6. Kyith7 September 2011 at 11:30:00 GMT+8

    i suspect there is alot of experience investors gonna missed the boat again.

    ReplyDelete
  7. Anonymous7 September 2011 at 13:39:00 GMT+8

    Hi coconut,
    The best way to win a war is not a single bullet is fired and the enemy agrees to defect to your side.(Maybe DBS take over OCBC as rumoured and you own OCBC shares).

    The next is total annihilation of enemy by nuclear weapons. But then the conquered prize may be worthless already.(Average down until company was suspended-like some S-Chips.

    ReplyDelete
  8. coconut7 September 2011 at 15:29:00 GMT+8

    haha temperament, cash is not the only amilition you use in trading. stocks and commodities are also your weapon.

    in a bear market, if you don't own stock, you can borrow from others to sell short. same principle for futures market.

    so if the current market is still going down, i'll stay short until the market turn, that will be another battle ground.

    ReplyDelete

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