Saturday, January 16, 2016

My Strategy In This Bear Market

As you should know, the bear has arrived. Everyone is explaining about their own differentiated views and directions. Thus, it is starting to get a bit confusing.



So I guess its time to review how I should approach this Bear Market and this post will be a reminder.

My mission is to "Buy Quality Companies With High Margin Of Safety That Can Withstand This Short Term Volatility And Sustain Paying High Dividend"

1. Do up a Watchlist of Stocks with expected Entry/Re-entry Price

During this period, every single stock will be on discount. Everyday as a value investor, you will be tempted to enter the market. But remember your cash is limited. So you will have to do up a watchlist of stocks and each stock should have a entry price.

2 - Blue Chips vs Dividend vs Value vs Others

If you look at my portfolio, you can break the stock into 4 categories - Blue Chips, Dividend, Value and Others.

I realised my Blue Chips and Dividend Stocks have been hit very badly during this period, while Value Stocks have withstand the Bear Market the best. Others have performed relatively alright too.

So based on the above view, I will stop all my Blue Chips and Dividend Paying Stocks purchases, and concentrate on buying Value Stocks (Stocks that pass the Triple S Scorecard).

I will also stop buying Others because I want to concentrate on Quality Companies that pass the Triple S Scorecard. Furthermore, Stocks in "Others" may lack in some areas that miss out on being Quality.

3 - Buy when value emerges in Blue Chips

Blue Chips tend to recover the fastest, so there is no ignoring of the Blue Chips.

I will re-enter to buy the Blue Chips when STI hits below 2500. My view is that 2500 should be quite a low point for STI and value should emerges then (no technical analysis done... just my gut feel).

4 - Clear dead wood/Others to recover some cash.

I still have some "dead wood" in this portfolio that I am looking to sell off to recover back some liquidity to buy more stocks.

This is just my reminder to myself of my approach to this bear market. If you are starting to be confused as well, you should try to come up with your own approach for this bear market.

If you are interested in my Triple S Scorecard, contact me through my blog or message me on my T.U.B Investing Facebook Page.

I will also be producing an online course, if interested, contact us for more details if you are interested.


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2 comments:

  1. Good strategy. But I think entry prices should not be cast in stone.

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    Replies
    1. However, you must have an entry price. But once your entry price is reached, you have to reassess the situation then again.

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