Back in 2008 when we were in the thick of the Global Financial Crisis (GFC), the Straits Times Index (STI) lost about 50% (dropping from 3,482 points to 1,750 points).
My Singapore equity portfolio was down 17.8% in 2008. This was not unlike last year (2015) when my portfolio for Singapore stocks was down about 19%. I am seeing a bit of history repeating now.
History told us that the STI gained back some losses in May 2009 to 2,238 points, a jump of 28% from end 2008. Currently, it was at 2,882 points as of last year (2015), another jump of 28%. If one did not panicked in 2008, you would have done all right by staying invested.
What would I do in 2016?
I would probably hold onto my Singapore equity and not to sell off everything. Most stocks owned are STI component stocks and STI ETF. I do not trade on margin and I shy away from small-cap and Catalist stocks. I do not own China stocks also. These were volatile and I do not do research on these stocks.
I would not be putting fresh funds into new investments this year, conserving my cash balances to ride out 2016. There is still too much uncertainty in the global economies.
What I would do is to constantly review my entire portfolio of investments throughout the year and see whether there is a need to re-balance the investment mix. I may take some losses to clean up my balance sheet. But all these require one to be calm in this difficult period.
Copyright © 2016, limkimtong for Living Investment
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