Thursday, 6 February 2020

My Plan for this Virus Crisis

We are now in the midst of the Wuhan virus outbreak with the spread showing no sign of abatement. Neither has a cure or vaccine been found yet. 

To make matter worse, another outbreak of H5N1 bird flu has been reported in Hunan, China. 

Naturally these led to a bearish trend among the stock markets worldwide. 

I'm sure most people already has a plan in mind on how to tackle this crisis with reference to their investments.

Some will stay on the side line and try to catch the bottom.

Some will accumulate, citing the famous adage: Be greedy when others are fearful.

Some will attempt to short the market. 

So what's my plan for this?

It is quite simple actually. It's a hybrid of the first two strategies.

1) I am spending most of my time on the side line trying to accumulate more funds while watching the news and market closely.

2) Whenever a counter in my watchlist hits my initial target price, I will do a quick re-analysis and buy a small batch.

2a) Key to this is buy in batches. Because the market can turn in any direction any time. So if the share price of the counter drops further to a certain percentage, I will buy in again pending another quick look through.

2b) If a cure or vaccine is found for the virus, the market would almost certainly rebound sharply.

Then I can buy on the rebound also. However the key to buy on the rebound is that one must be nimble. So it is imperative to watch the news closely.

Now this is something that I can't say for sure that I will have the time to do it.

Hence with point 2a above, at least I would not have missed out totally on good opportunities. 

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