Hahaha I think there are also a group of people in the FD thread lurking around preparing the war Crest when times come. Those people have large funds moving around diff platforms which can liquid within short time and pour into the market.
Those who learned during 2009 saved their hard earned money and waited patiently...
I know a group of teachers who bought their landed terraces during the recession years - then price dropped from 1+mio to around 700k. These are now worth 2.5m... this strategy of buying assets when prices are depressed would work very well. However, it is hard to execute. I recalled their conversations about servicing the mortgage as they would be stretching on their monthly salary to purchase the house. As teachers, they had pretty much an iron rice bowl but it was still a difficult decision to make.
By the same token, many talk about buying stocks when prices plunge and trying to catch a bottom - and I know of many who had that thinking but during the lehman brothers collapse, many just found it difficult to dip in - and when they did, it was post crisis.
We are always wired to get the best price, catch the bottom... and when it comes, our loss aversion mentality takes over. After prices bottom out, we would then be given to fear of missing out and by which time, it was too late.
As such, I think one really needs to set a game plan now - have discipline to buy into the market everytime it dips 10% after the market crosses below a certain threshold that one is monitoring. Trust me - this requires discipline in execution and if one does not have a clear game plan now, they will most likely miss the boat when it comes.
On holding cash to capitalize on this, I think it exacts a very high opportunity cost - and the longer one holds, the more one loses to inflation and opportunity to compound. Maybe one should consider parking it into short term liquid instruments or if one is more adventurous or engage a fund manager to manage it. Selection of the right fund manager is another issue but placing with the right manager may well be a way to optimise spare cash.
