Friday, February 9, 2018

Steps To Take In A Market Correction

I am not sure how you are feeling about this market correction, but I do feel pretty excited because I felt there will be more opportunities coming and I cannot wait for it.

Nevertheless, I came out with a few thoughts on my own to keep myself in check.

So here I goes:

1. Keep Calm and A Clear Mind

Some people will feel scare, some will feel despair, some, like me, will feel excited. Regardless, I believe we should still try to keep calm and a clear mind. Focus on the necessary information and block out the “noises”.

2. Reduce Your Watchlist and Focus on Your Portfolio

I removed all unnecessary counters in my watchlist. After all, I have been told too many times that my portfolio is too diversified. Thus, just focusing on my portfolio will be using up a lot of my time.

3. Focus on Individual Company and Not The Market

If you focus too much on the market movement, such as STI, you will probably be too affected by the unnecessary “noises”. The first thing that you do should be to re-evaluate each counter in your portfolio and understand if its’ fundamental still stands.

4. Pace Yourself, Funds Are Limited

I know the whole market is dropping. But you cannot buy everything. Furthermore, you do not know how long this correction will last. Pace yourself because you only have limited funds.

5. Buy Strong Fundamental Companies

I don’t think I can emphasize more on this point. If you speculated or do not know anything about the company, I will say good luck to you. At the end of the day, understand why you purchase the company in the first place or why you intend to purchase the company now. At least make sure its balance sheet is strong or at least its business is positive cash-flow generating.

If you really do not know how to find or select fundamental companies, you can always write to me as well as many other experienced people out there.

Finally, I am going to put myself out there and tell you to subscribe to Fundamental Scorecard Website if you still don’t know where to start. I still believe our scorecards will be able to value add to your investing journey.

Good luck!

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