Thoughts On The Recent Market Correction

 

Mr Market recently went on a correction spree and the market was filled with way too much red in the last week or so. That got me thinking, how do people react when such things happen? Do we panic and go into a selling frenzy? Or should we take a step back and try to think rationally about the initial reasons that we bought into a certain company in the first place.

Reading the thoughts of other finance bloggers and users on apps like InvestingNote really puts some things into perspective. I think it is only human to panic and feel some emotion when something that you are vested in takes a hit/plunge. But going beyond that, the fundementals of the company and the track record of its management should provide us with some assurances to tide us over this period of volatility. I am definitely not immune to being scared and have a support system of people I trust that I can turn to for their opinions and absorb alternative viewpoints so that the final decision made is as informed as possible.

Going forward into the month, I am planning on creating a worksheet for couples (married or not) to approach the topic of money and finance in Singapore's context. If you have anything you want to see in this, please holler at me or drop me a comment and I will take your suggestion into consideration.

Share with me your thoughts as we enter the last two months of 2020!

SG FI Dad, out.

Importance Of A War Chest

 

War chest is a probably slang in investing terms for cash reserves set aside or built up over time to take advantage of certain opportunities that present themselves. As a novice investor (not experienced yet lah, still got some ways to go), I think that my inexperience has led to an oversight in this area and we need to build up this capacity moving forward.

I must stress that this is my opinion, and I believe that cash has an equally important role to play in anyone's portfolio. It allows an individual  to plan out how to tackle certain situations that arise in the markets and really put your money to good use given the right opportunity for you.

In our current situation, we have used some of our available cash to apply for some of the recent preferential offerings that happened such as Frasers Centerpoint Trust. We think the FCT presents a good opportunity and good management as we move forward in this crisis. Hopefully, this moves pays off in the long run. We also hope to find more opportunities in the near future to expand our portfolio and make our money work harder.

Share with me your thoughts of having cash in your portfolio.

If you are a little kiam siap like me, check out this link to get $5 for free potentially!

SG FI Dad, out.

A Personal Reflection on Covid-19

I recently read a couple of articles/posts here and here detailing how some high income earners have been badly hit by Covid-19 and the subsequent retrenchment/organisational restructuring. My well wishes goes out to those who were interviewed in the TODAY article as well as anyone who maybe facing the crunch now during this pandemic. 

It is unfortunate that the aviation and travel industry are so badly hit during a black swan event, such as Covid-19. Travel restrictions have really put a dent in demand with SIA even having more than 80% of its fleet in idle at one point of time. When the demand for one's skills/expertise is reduced, it is inevitable that the organisation/business will have to restructure in order to stay viable.

This situation has really put into perspective the importance of having an emergency fund and keeping expenses manageable. One of the pilots that TODAY interviewed was earning above $14,000 but was struggling to make ends meet when there was a company-wide pay cut to $6,000. To a middle-income earner like myself, I could not comprehend their struggles initially. However, it is always important to take on the lens of those affected. Imagine yourself earning that much, it is easy to feel that you can take on the world and whatever expenses you deem fit. One may start chasing status symbols like luxury cars and goods and you might want to experience the best there is to offer. The constant need to look good and appear like you are doing well will eventually take a toll on the individual and his/her resources.

The simple solution is really to limit one's expenses and not make social affirmation one's priority. Everyone is on their own journey and there are not hard and fast rules on how someone should/should not spend their money. But contingencies should always be in place such as emergency funds, a equity portfolio and upgrading/diversifying of skills. However, situational and cultural factors are not so easy to overcome. 

I am grateful that I have had the chance to take courses throughout this period to expand my horizons and diversify my skillset. I am always looking out for courses that might be interesting and to learn something new maybe even from a different industry.

That's it for my tiny reflection. Share with me your thoughts on how one can overcome such situations and what you have done to future-proof your skills.

SG FI Dad, out.