Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Tuesday, March 22, 2011

My Strategy: Sell into strength

Well, I really hate to do this but I'm actually selling into strength some of stocks with good fundamentals. The price action of some of these counters is so appalling it makes me feel nausea and wanna puke.

I'm taking my chips off the table and cashing in whatever winnings offered for next month or so. Observation for past 2 months has convinced me that we're past the peak in most market sectors and there are limited upside for most of the stocks (yesterday's winners are not much fun to buy into). When stock market does not reward your investment in such volatility, why not look into other financial instruments..? When you buy into a stock and days after days, prices don't move up, you know it's not the time to park your money in stocks. There's only one instrument I can think of- CASH..! And plenty of it, at 60 - 70 % cash holdings..!

For those counters which are experiencing huge loses, why average down in a downtrend and throw good money into losers...? Conserve your cash, preserve your capital (even at 3 % FD) and take a peek at the stock market in a year or two. Meanwhile, you might want to consider taking some position or doing placements with OCBC and Citibank that pays yields of more than 5 % pa. They have an instrument called Dual Currency Investment (DCI) which is very easy to play along. And remember don't park your money in unit trust-- it literally sucks (yr money) when market plunges..

1 comment:

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