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What to do if recession hits

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Old 10-03-2019, 09:31 PM   #1
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What to do if recession hits

I read that most investors have a "warchest" ready in the event/hope of a market crash.

1. How big is your "warchest" in proportion to your total portfolio?
2. How should we invest this lumpsum? If say the market drop by 20%, will you activate all at once? Or "DCA"? Or continue waiting?

Sorry if this question has been answered before.
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Old 10-03-2019, 09:33 PM   #2
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Convert all your investment cash accounts into margin accounts.

When recession hit, and when you are sure it's the bottom, dump in ALL your cash at hand, your CPF-OA account monies, as well as go borrow as much as you can (use your margin facility to the maximum) into the stocks.
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Old 10-03-2019, 10:26 PM   #3
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1. It's really big!
2. All-in at the bottom is the best.
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Old 10-03-2019, 10:48 PM   #4
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60% cash 40% stock
Waiting damn Long already still no crash
Above inclusive of me invested 5% a few months back when market was near previous bottom
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Old 10-03-2019, 11:01 PM   #5
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1. It's really big!
2. All-in at the bottom is the best.
How to know if it's bottom?
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Old 10-03-2019, 11:41 PM   #6
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I read that most investors have a "warchest" ready in the event/hope of a market crash.

1. How big is your "warchest" in proportion to your total portfolio?
2. How should we invest this lumpsum? If say the market drop by 20%, will you activate all at once? Or "DCA"? Or continue waiting?

Sorry if this question has been answered before.
This warchest thing is ********. just to keep people reading their blogs and hoping to make money some days.

If someone know how to buy at the bottom then he should know how to sell at the top. Keep warchest for what?
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Old 11-03-2019, 12:11 AM   #7
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How to know if it's bottom?
Precisely. Nobody knows where the bottom is.
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Old 11-03-2019, 01:44 AM   #8
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Talk very easy, buy high is very easy to do. We are famous for this. Remember soon after the financial crisis started, bank stocks started falling, we spent don't now how many tens of billions bying bank stocks. Talking about catching falling knife, the stocks went down even more until like bankrupt.
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Old 11-03-2019, 06:16 AM   #9
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I donít keep a war-chest. Two reasons:

1) I wouldnít know when to invest it. Like people have said upthread, how do you know when the bottom is?
2) While itís not invested, youíre missing out on gains from the market going up, and youíll probably end up capitulating and buying when things have already gone up instead of buying before things go up.

Youíre better off just regularly dollar-cost-averaging in, and staying invested in a mix of stocks and bonds.
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Old 11-03-2019, 07:20 AM   #10
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During the ex financial crisis, and I started to scoop Lehman bro bank at bottom, fortunately its went bottomed before my entire funds all in.
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Old 11-03-2019, 09:08 AM   #11
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Convert all your investment cash accounts into margin accounts.

When recession hit, and when you are sure it's the bottom, dump in ALL your cash at hand, your CPF-OA account monies, as well as go borrow as much as you can (use your margin facility to the maximum) into the stocks.
Wow.. Go Big or Go Home!
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Old 11-03-2019, 09:09 AM   #12
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It also depends what you view as 'war chest'. Some view SSB holdings are part of war chest, and some don't. I feel that SSB holdings are part of warchest as they still easily accessible.
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Old 11-03-2019, 09:30 AM   #13
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I don’t keep a war-chest. Two reasons:

1) I wouldn’t know when to invest it. Like people have said upthread, how do you know when the bottom is?
2) While it’s not invested, you’re missing out on gains from the market going up, and you’ll probably end up capitulating and buying when things have already gone up instead of buying before things go up.

You’re better off just regularly dollar-cost-averaging in, and staying invested in a mix of stocks and bonds.
Your second point, I have a counter point to it: So you are saying people will capitulate and end up buying at the top, but if people stay invested and you have a long drawn bear market, the same people could capitulate and sell at the bottom.

We have had a straight up going market aberration for last 10 years, so people are trained to BTFD and think it is a sure shot win. It is a bit like the Australian property market, people thought it is only one way and up. Now it is disbelief that property prices can fall too. I see the same thing happen to US stock investors. Won't say same thing for other region stocks, because they didn't even participate much in the upmove.
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Old 11-03-2019, 11:56 AM   #14
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inherently, bond investment is the warchest
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Old 11-03-2019, 02:39 PM   #15
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Your second point, I have a counter point to it: So you are saying people will capitulate and end up buying at the top, but if people stay invested and you have a long drawn bear market, the same people could capitulate and sell at the bottom.

We have had a straight up going market aberration for last 10 years, so people are trained to BTFD and think it is a sure shot win. It is a bit like the Australian property market, people thought it is only one way and up. Now it is disbelief that property prices can fall too. I see the same thing happen to US stock investors. Won't say same thing for other region stocks, because they didn't even participate much in the upmove.
talking abt aus property mkt, sg property mkt ppl also think it will only go up
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