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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Sunday, 15 March 2020

CONVID -19 vs GFC : Is the nightmare just begins???


Posted by Createwealth8888 at 13:38
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2 comments:

  1. Spur15 March 2020 at 14:28:00 GMT+8

    I'll be surprised if there isn't going to be at least 1 (or 2) dead cat bounces in the next few months.

    During GFC, there were 3 10++% bounces in the S&P before the final March 2009 bottom.

    However I doubt the total drawdown this time will be as bad as GFC .... as this is due to exogenous event & not a structural event like the extreme malinvestments in Japan property in the 1980s, Asian properties in the 1990s, tech in the late 1990s, US/Europe housing in the mid-2000s.

    Moreover STI in 2020 is very much lower valuation compared to 2007 (near 11 now compared to near 20 previously). It is the US markets that are very high valuations today, even after their 20% drop to-date.

    The main concern people have now is that this exogenous event will turn into structural event --- the trillions of dollars of US & European barely-investment grade corporate bonds begin downgraded into junk status, and all those CLOs (collateralised loan obligations) floating around.

    This may happen if major economies are unable to contain the virus within 3 months & companies' cash holdings all dry up & lenders / govt unable or unwilling to bend over.

    I believe there will be extreme political influence over the ratings agencies NOT to mass downgrade a lot of these borderline IG debts .... together with massive pumping of helicopter money from global central banks to keep credit & lending & debt rollovers from freezing up.

    Hence I still nibble (or rather munch) some stuff --- hey, never let a big correction go to waste!!, but still keeping a bigger portion of my stomach empty for any future big or bigger drops. :P

    ReplyDelete
    Replies
    1. AppShadow17 March 2020 at 00:03:00 GMT+8

      I agree on the 2020 STI valuation was much lower. That said, I see weakness in the banks who makes up 40% of STI. SIA/SATS would continue to drop.The developers and reits wouldn't do well. For me who DCA STI monthly and have 15 years before any drawdown required, a 12 month bear market suits to ave out the prices. Of course, that will just be meeting the market returns. Have been munching on some individual counters and have choked quite badly. Take care

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