This week’s articles and my reflections on them are detailed below. And as usual, any feedback would be warmly welcomed. (To understand the genesis behind this weekly series, click here.)
Navigating A Volatile/Bearish Stock Market
As I am typing out these words, the Straits Times Index is hovering at around 2,990, and likely to end up higher than the previous week. Simply amazing, considering the local index dropped a massive 127 points on Monday, just four days ago.
Many were anticipating the worst, fearing/looking forward (depending on how much you had vested) to a big bear. This has somewhat subsided, after the massive rebound in the past few days.
Did your emotions go through the same roller-coaster ride along with the market? If so, you might make use this mini-episode to evaluate whether you had too little or too much exposure in stocks. Reading these articles by fellow bloggers should also help you to be less greedy/fearful.
11 Of My Thoughts Of The Stock Market Now That Its Down 17% (InvestmentMoats)
Stock Market Is Crashing – Should You Sell, Hold Or Even Buy? (BigFatPurse)
What To Do In This Market (Tree of Prosperity)
The Stock Market Sale – One Man’s Perspective (Turtle Investor)
Market Correction = Shares On Sale? (A Pen Quotes)
Investment Psychology
5 Investment Biases You Should Know (ValueEdge)
I shall admit here that I am personally very affected by an anchoring bias. When I purchase a stock at a certain price, I always take reference from that price.
Even when fundamentals improve, I find myself reluctant to average up as the price I bought at was “cheaper”. And when fundamentals deteriorate, I also find myself reluctant to sell as I expect “prices to revert”.
On hindsight (another bias), expecting “prices to revert” caused me to hold on to some of my oil stocks for far too long. Aaargh…
Neglect Of Prior Base Rates Effect (Tacomob)
Over here, Tacomob talks about the recency bias that we are all subjected to.
Yes, the market is falling, stock prices are falling down. And we are being bombarded with there negative news by the mainstream media. But what should we really do to benefit ourselves in the long run?
We always forget that time in the market matters more than timing the market. Don’t let recent news cloud facts that you know.
Interviews
Since there’s quite a few interviews this week and to avoid you reading just my (rather lengthy) reflections, here’s my general take on interviews:
It’s one of the most efficient way to find out the philosophy of that person and pick out their nuggets of wisdom.
Part-time Job Packs Potential For New Horizons – Me & My Money (The Sunday Times)
Giraffe’s Coffee With Budget Babe: Money Management, Investing & Eye Roll (Giraffe Value)
Others
Cars In Singapore: How To Get The Best Deal (SingaporeMM)
I am really expecting COE prices to dip significantly (below $50,000) over the next few months and I am expecting quite a few of my peers to be interested in buying a car. This article could be some good reading if you want to convince yourself to buy a second hand car.
And not just any second hand car. A second-hand “boring” Japanese make with less than two years left on the COE. That also makes it easier for one to buy a car without having to take a loan. Yes, full cash upfront, like what SingaporeMM says!
Thanks for the link!
I have a question for the Mrs and you. I recall the Mrs used to work in marketing. I have some marketing friends who know what marketing is actually about (quote: ‘it’s all bullshit’) but still buy into it eg spending lots of money on fashion, or still paying for expensive things when they know that the mark up is ridiculous. What I would call falling knowingly into the marketing hype.
The Mrs is of course, very frugal, and I’m wondering how her marketing job has shaped her frugality. Did it show her that marketing is nonsense, or was she disillusioned by the marketing job, or any other insights? Would be a delightful read. Thanks 🙂