Monday, August 20, 2012

Problem Of Being Not Invested

I just went to the Bank recently to create a new fixed deposit account for amount I received recently from some third-party organizaion. I did not want to invest this sum as the market has gone up a bit recently. I was quite surprised that the rate is 0.15% for 6 months and 0.25% for 12 months. I thought to myself what would have happen if I am totally in cash in the kast few years or have gotten out due to the volatility in 2010 and 2011???? What much would I have lost without being keeping myself invested??? By keeping myself invested, I would still be better than if I had been in cash even if the market got to go down by 20-30% in the next few months. The current environment simply do not reward but instead penalise heavily those who stay 100% in cash.


  1. If the market sure to go down by 20-30% in the next few months, i sure will sell all my stock holdings now.
    i really mean all.

    To buy is easy.
    You can buy at any time of the market
    To sell is not so easy.
    Who can tell what the market is going to do next-
    the next moment, day, week, month, year, or years?
    > then 25% drop in the market is technically considered a "Bear market".

    1. wow temperament!

      i'm exactly opposite of you. i have no problem at all selling stocks, if i don't have, short lor. but i have real big fear buying stocks.

      we make a good team what say you haha.

    2. Hi Coconut, you are here too!
      Ha! Ha!
      i know what you mean.
      But we are most probably talking about different time frame of "trading in the market' or time frame of investment.
      i think whether shot or long, i will have the "same fear".
      In fact a shorting-buy is more dangerous then a long-buy.
      Don't you think so ?
      Especially if you are covered with a "stop loss" for shorting-buy.

    3. "Especially if you are not covered with a "stop loss" for "shorting-buy"
      Sorry correction for the mistake above post

    4. i'm here cos of you what haha.

    5. No problem as long as the BLOG's Host welcome us.
      Ha! Ha!

  2. @diyinvestor88, I have different opinion. If all your stock dive 20 to 30% what will happen to your investment? Think of the opportunity where prices are 20 - 30% lower and when you have the $$ to buy in.

    Just a comment.


    1. do not disagree with you to sell if you are sure that stock will dive 20% to 30%. However, the caveat is nothing will be 100% of anything in investing. Even the experts actually do not know. Given the uncertainty of the future, selling out everything and timing your return is very difficult, at least for me. For me, since the bulk of my stocks actually pay dividends even in the Global Financial Crisis, I will be reluctant to cash out unless I conclude that a stock I hold has turn sour in outlook. You are free to differ and I will respect that too.

    2. In the stock market, it is all about uncertainty and probability; risks and returns. Nothing is certain!