Markets have been stubbornly high, but surely, it has to come down.
The thing to do now is wait.
Source https://www.morganstanley.com/ideas/thoughts-on-the-market-wilson
Markets have been stubbornly high, but surely, it has to come down.
The thing to do now is wait.
Source https://www.morganstanley.com/ideas/thoughts-on-the-market-wilson
Heh heh heh...
ReplyDeleteHow deep to come down? And how long to wait?
This Mike Wilson has told Morgan Stanley clients to wait since 19 Oct.
"CRUCIAL QUOTE
"With so many uncertainties over the next month, we think another 10% correction from Monday's highs is the most likely outcome in the near term before this bull market can resume, at least at the index level," a team of Morgan Stanley equity strategists, led by Michael Wilson, said Monday.
"In no particular order, we would highlight lack of a fiscal stimulus deal, election outcome/timing of final results and second wave of the virus as the primary headwinds to higher prices in the near term.""
Unfortunately for Wilson & his clients, November 2020 was one of the best months for US markets in the last 30 years. The best for Dow since 1987.
Here's a thought:
1. Be truthful to yourself & decide how much pain you can take --- decide on an asset allocation ... how much to put into risky assets like stocks.
2. Risky assets like stocks should be invested with $$$$ that you're confident you won't touch for at least 5 years.
3. Split the amount that you're going to allocate to stocks into 3 portions.
4. Invest the first 1/3 portion now.
5. Start DCA-ing the rest from next month. This DCA of the remaining 2/3 should complete within a year or so.
6. If there's a -10% drop within the next 12 months, lump sum invest 1/2 of the remaining amount.
7. If the major index drops further to over -20%, then just lump sum invest the remaining amount.
8. Not forgetting that you also have other asset allocations into less risky assets such as emergency funds, fixed income, CPF, etc.
Well said dude! Always stay invested but I would think this may be the time to take off some profits.
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