Ultimate Stock Tips

Don't Panic in a Bear Market. Falling share prices are Normal.

Publish date: Sat, 16 Jul 2022, 11:59 PM
Unique content created once in a blue moon to increase the quality of articles of klse.i3investor.com. (used to be weekly)

The panic selling continued this week. USA's consumer price index increased 9.1%. Everyone is expecting a recession in the USA end of this year, or the start of next year. 

Mr. Market will continue to be a ferocious bear, clawing investors' profits away. 

Currently, foreign funds, local institutions & retail investors are cowering in fear, staying sidelines by seeking shelter in cash, while cutting off exposure to equities/stocks and waiting for a cheaper entry. 

Are you afraid as well?  

Will TOPGLOV fall to 80sen? Will INARI tumble to RM2? Will HIBISCS continue its plunge to RM0.75?

Whether share prices drop or rise, the important thing is to plan ahead of the potential event. 

Say you bought INARI at RM3.50, and now suffer a paper loss of about -26%. 

What if INARI falls to RM2? (due to semiconductor demand downturn or worsening market conditions) 

Can you take a bigger loss of about -43% & hold on? ​Do you have the financial ability to hold for a few years? 
What if INARI rises back to RM3? Would you then regret a potential lesser loss of -14% in future if you had cut-loss now?
Such preparations are required to be thoroughly figured out. Once it's done, you won't panic too much.

Bear markets come and go. It could be long & painful, like 2 years in 1997-1998!  Or short & sweet like the few months in 2020.

Don't Panic in a Bear Market. 

Make Plans accordingly. 

I shall stay invested & view the bearish Mr. Market as a good chance to buy shares of my preferred companies at lower prices for the longer term. When the economic outlook of Mr. Market changes from worrisome negative outlook to a more hopeful one, perhaps in many months from now, investors of all classes would return with buying spree, and share prices will recover.

Disclaimer: This article is not tailored financial advice, but mere general stock sharing / observations. Please do further due diligence. The author disclaims all liabilities from readers.

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