Financial Freedom SG

The market has been hit by another crisis of confidence. The multiple whammies of the costs of the oil spillage, uncertainty in Europe over the government debt, an increase in tensions between North and South Korea plus the troubles in Japan and the resignation of the Prime Minister there.

Then you have the Israelis making a gaffe and increasing the tension in the Middle East and between them and their once close ally of Turkey.

The question on the minds of people is whether a double dip recession is finally going to rear its head?

Warren Buffett wouldn’t care. So should you?

He knows that he cannot predict market directions or recessions, but he has quite a good judgment of which companies is worth investing in.

In the Great Panic of 2007-2009 and the Asian Financial Crisis, one key lesson I have learnt is to take profit. So I had sold off gains made during the previous Asian Financial Crisis in 2003 before it full run up and divested it. Also sold off a position in Breadtalk and banked in the profits for that in anticipation of future spending next year for my masters course.

The gains for the previous sell off is sitting in the CPF ordinary account as the first $20,000 buffer so that I can continue investing the surplus that comes into the account after paying off the housing loan. The $20,000 also acts as my buffer against unemployment or retrenchment as it can last me at least 20 months.

So for me, I couldn’t care less if the Dow is below 10,000 points. In fact I am happy if the S&P500 is also below as I can buy more units using dollar cost averaging each month.

The only time to hope it is up is when it is time to sell.

What to do now? Look for opportunity to buy and build up your savings so you have more dough to take advantage.