If you’re a long investor into equities, particularly the US stock market, these are really, really painful times (nod to Jay Pow). Since the start of this year, I’ve been nibbling into US equities, which on hindsight is the time to EXIT the market, at least based on what savvy investors and smart money seem to be doing.
The Russian invasion of Ukraine triggered some more dip buying, which continued till May. I flipped some stocks and made some returns on Tesla and Apple. But by and large, I’ve been just pilling into the S&P 500 (Endowus Infinity US 500 fund, VOO and SPLG) and QQQ (and QQQM) as well as VT – world total stock market ETF.
In June, the market hit a low after the first 75 basis point Fed rate hike. That seemed like a good time to enter, but I stayed away. Spooked by bears that the market could collapse further, I decided stay out and parked my savings into bonds and endowment plans.
In July, after the market’s positive reaction to cooler CPI data, I re-entered again with commission-free broker Webull thinking the worse was over. There was a nice relief rally and some speculative bets paid off.
But, after Jackson Hole and the new lows we’ve seen this end of September, it just seems like I’ve been played by every trap and fake move the stock market has thrown along the way. While I thought I could swing trade my way into some success, I’ve instead found myself sitting on way too many losers.
The market seems to be on the brink of a 50% decline, just as what chest-thumping hedge fund bears Jeremy Grantham, Michael Burry and Scott Minerd have predicted.
The thing is I often subscribe to what the bullish retail influencers like Loo Cheng Chuan, Adam Khoo and Stock Moe have been saying, and buying and buying.
So here’s my takeaways:
- Stay the F pessimistic. It’s ok to listen to these Youtubers, but don’t buy into any optimism. I have lost faith in any V-shape recovery. I don’t think there’ll be a bull run until the Fed pivots (and God knows when). And they’ve already put out projections of a heightened rate environment for a longer term. It looks like it could be an even more agonizing time going forward.
- If you’re swing trading, I’ll say: Don’t predict the market. The patterns from the past don’t seem to repeat itself. Have a game plan to exit if you’re wrong. Use stop losses if necessary.
- Invest only what you can afford to lose.
- Use Webull
I personally don’t know if I want to continue averaging down. But if prices look too tempting, who knows? Given how fearful investors are based on the CNN Business Fear & Greed Index, I actually think it’s okay continue nibbling/DCA but have a long investment horizon and prepare for more pain.
That said, equities are still a very small part of my portfolio. It’s agonizing losses, but it doesn’t affect my already very frugal lifestyle.
So, if you’re looking to buy this market downturn, I’d strongly recommend Webull as a broker. It’s a great platform – super easy to use. And best of all: It’s commission-free! Though some trades reflect a US$0.02 trading activity and SEC fee charge.
The best thing is that you can get US$130 worth of TSLA stock, if you use my signup link. But here’s the catch:
- You need to deposit S$2,000 into the account and,
- execute at least 1 stock or ETF purchase with a value of US$100.
- Only US and HK stock markets are available
The offer is till Oct 14th. I’ve got my US$120 worth of MSFT stock so I can vouch for this campaign. Pls use my signup link for the fractional TSLA: https://tinyurl.com/muu26e7p
For traders, I think Webull is a dream come true because it’s so economical. And if you’re just a long investor who occasional dabble with speculating, better still. Just be prepared for a tough ride.