The worst thing one can do is to sabotage their own financial plans by engaging in the senseless behaviour of panic selling and panic buying. The recent financial turmoil arising from the subprime crisis in the US has unnerved many investors. Just months ago, many investors were still looking at increasing their investments for fear of missing out on the attractive returns that were being dangled by the various well performing stock markets. Why is it that we find it so much easier to invest our money when markets have headed up significantly and find it so difficult to invest our money when markets are depressed and downside is limited? Much research had gone into analysing such investor behaviours and it largely boils down to panic buying and panic selling. When markets are on an uptrend, the good news abound and money appears to be readily available on the tables for anyone willing to reach out for it. Investors are afraid of losing out on pocketing the potential profits with each d
The financial meltdown arising from subprime losses may have been the first event in a multi year economy downturn. Property prices are down, foreclosures are up, banks are getting more selective in their loans and stock markets have been on a downward trend. Is the bear market already upon us? In the near short term, it is highly probable that stock markets are going to continue their downward trend though some bounces will occur when oversold levels are perceived. Is it time to exit the market and hold cash instead? Cash is king but such downturns are the best investment opportunities for those with spare cash on hand. Pick up stocks with solid fundamentals. During the last downturn, the market darlings were companies with strong balance sheets or a large cash pile to back them up. Blue chips that regularly paid out dividends were also highly preferred because of the stability they accorded. It even spawned unit trusts such as First State Dividend Advantage and SGAM Singapore Dividen