It is nothing but an illusion of wealth when the Bull charged ahead!
A short moment of happiness of hitting All Time High; and then the mood in the market changed so fast! Bear coming? LOL!
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At present, I am more worried about health safety for myself and my family than losing money in the market. I am numb to losing money liao. Losses are expected from time to time. Money can always make back later but health, once lost, cannot.
ReplyDeleteTake care. Good luck and good wishes to everyone on their health and safety.
Hi Uncle8888,
ReplyDeleteI'll be surprise if STI drops more than -15% from post-CB peak of 3232. :P
Investors & traders roughly know what to expect this time around. ;)
Hi temperament,
ReplyDeleteMany young Singaporean investors have given up on SGX and moved on to U.S market. This is evidence of recent deviation.
STI is more correlated with HSI. Both countries' stock markets are highly dependent on banking and property companies.
For those still accumulating wealth, a boring but consistent method is the Permanent Portfolio.
ReplyDeleteThis is how it has performed over the last 16 years.
CAGR of 7.3%. Maximum drawdown of -12.6% during GFC that took 10 months to recover from the bottom.
Not a get rich quick scheme; it will take you there given enough time. :P
And what is it exactly?
Equal parts of Cash, Total US stocks, Long-term US treasuries, Gold.
Rebalanced once a year e.g. on your birthday. That's it.
PS: CPF should seriously consider implementing this for SA.
Hmm Permanent Portfolio? If not remembered wrongly, the "Guru" who started teaching on Permanent Portfolio gave up already as lesser bei kambing coming for slaughter?
DeleteHmm you mean the "singapore permanent portfolio"? That one has 2 issues ... use of S'pore equities is too narrow & concentrated ... & use of S'pore 30-yr bond itself is too illiquid for rebalancing & frankly S'pore govt bonds don't go up enough when SHTF to counteract drop in equities.
DeleteThe S'pore permanent portfolio suffered more than the US one from the Fed Taper Tantrum & the Oil Crash, as well as the start of the Trade War. Maybe that's why the guru gave up in Apr 2018.
Its CAGR from Jan 2012 till Apr 2018 as maintained by the guru was 2%.
The CAGR of the original permanent portfolio for the same period was 4% ... yes boring & mediocre.
That's why it's more suitable for a very long-term locked-up vehicle like SA where people cannot become sianz & fomo into other strategies every few months or few years. LOL.
CAGR for SPY or VT definitely beats permanent portfolio hands down over the long-term.
ReplyDeleteProblem is that 9 out of 10 people will be screaming and/or selling at the lows after -55% during GFC or -35% during Covid.
Permanent portfolio (or other diversified allocations) aims to protect investors from their own worst enemy, while at the same time deliver above-inflation returns.
If PAP implements pure equities for SA, be prepared for 1M@HongLim and change of govt after each bear market.
Values of all assets classes are "illusionary" - equity, gold, properties, bitcoins, even cash (a "millionaire" in the 1990s will not be the equivalent of a "millionaire" of the old days if he holds his wealth in cash throughout). Thought about illusion, properties (now considered a sure win investment by some) can even be worse than equity (bear in mind the use of "leverage" in property). My properties lost almost 7 figure in value in the property crash induced by AFC in 1997. Fortunately the property market recovered and moved up.
ReplyDeleteNo asset class & investment is safe. AFC, GFC & COVID 20 also taught that diversification is not the cure all silver bullet against investment loss. It just reduces the pain.