Ever since more confirmed nCOV cases started surfacing up globally last week, the equity markets have generally taken a beating due to uncertainty of the near future, especially stocks relating to tourism. Medical and medical supplies related stocks are up on the contrary, which was expected. Panic selling in the market, further depressing prices.
My portfolio has taken a hit as well, shaving off 7.7% of its value from the start of the new year. We don’t see this nearing the end as yet, and prices will expect to continue to fall further. However, I am still sleeping well at night. Why?
The current dips in the market have little to do with the company’s fundamentals, but more of external macroeconomic factors. As long as you are vested in high quality companies, the current situation is a passing one, and I believe it is not the real bear market or recession.
In fact, the dips that we are seeing today present buying opportunities for the long-term investors. This is one of the times where you should actually be increasingly vested, rather than bailing out. Prices are getting cheaper. Bargains are to be sought.
As markets head downwards, the masses as a norm heads towards panic-stricken mode. The savvy investors however, start to prep entering the markets by tapping onto their warchest. Similarly, I am getting increasingly thrilled or euphoric as the chart terms it as prices head down.
I thought the above chart was interesting. Every action that we take as well as other factors could be mapped on the domain of level of control versus the importance of each factor in reaching long-term investment goals. By understanding this, you could probably spend more efforts in the areas where there is higher impact as well as allowing you to chart your way.
It isn’t all gloom and doom in a market down. In fact, this is the time where the savvy would be beaming with joy and seize the day. Time to look out for some market pickings!