SKPres : broken the critical RM1.35 level. Will we be seeing it below RM1?



VS : peaked around RM2.50, and turned downtrending. Averaging it every 50cents down ... assuming we bought at RM2.50, we would have bought more at RM2 and also RM1.50. The average is not RM2.

use RM10k for each level : 4000 units x RM2.50 = RM10k, 5000units x RM2.00 = RM10k, 6670units x RM1.50 = RM10k and so on ... sell if up every 50cents too. By the time we hit 50cents level again, we would have used up our RM50k. Will VS see high again ...one day? We shall watch.

I would suggest to place more funds at lower level. Example RM5k at RM2.50, RM10k at RM2, RM15k for the RM1.50 ... RM20k for RM1 ... RM25k for 50cents level, totaling RM75k. Assuming we still have RM25k cash-in-hang ... we go all out at 25cents for the last RM25k. That is called sailing-level.

Note : I m just using VS as example ... we can always use whatever GOOD stocks that we like to do the dollar-avareging and it is a no-brainer. A matter of discipline and we have to make sure ... the company is strong enough to continue to grow despite recession, after crisis and such.

For the 'less risk takers' , dollar-averaging might work well with Maybank or PBBank.

The levels we placed to buy in consistent-manner do not matter much too. What the most important thing is the company is strong in fundamentals and will recover ...one day. Cheap today, could be cheaper in future. Stock prices up today, may continue to go up ... example : QL or Harta


Let's use the new high QL as example. What is the best time to buy QL? As we are not analyst and assuming we do not even know QL is very rich in valuations, we only started to buy ...say at RM6. We have to stagger our buying.

But, I prefer this 'be patient and wait' strategy (any stocks going up will be downtrending again one day ... check SKPres and VS above).

Assuming it peaked at RM10 after months later.

We do not start to buy QL when it is downtrending. We slash the price into half.

Start to buy only when it priced at RM5 (half of the peak RM10 level).

Use first portion : RM5k for RM5.

Then .... use RM10k for RM4, RM15k for RM3, RM20k for RM2 ... and so on.

What are the issues we have to face? Well, we DO NOT know if it ever go to THAT low. Meaning to say, assuming we bought at RM5 ... and it bottom out after hitting RM4.20 (not RM4 for our next buying level) ...and start a new uptrend (where to sell??) to run up to RM7 level again.

So ... because we could never know where it will peak from here, a good uptrend could go on for months or even years ... and when it is downtrending, we DO NOT know where the low would be, so it is hard to allocate the amount of funds we have for each stock.

 Take VS as example : As it peaked at RM2.50 ... slashed half = RM1.75, right? We would have bought our first portion at RM1.75 .... I would suggest RM10k allocation here. VS closed at RM1.55 yesterday, so we are in RMXYZ paperloss ... heck, don't look at the short-term fluctuations .. we are in looooong-term investing, remember?

Slashing RM1.75 into half would be severe ... at around 88cents, nice number. So we shall use RM20k (double of the first portion) ... and with that, we shall reserve more funds at lower level ... 88 divide 2 = 44cents ... that would be about the next level to utilize out third portion ...say, RM30k.

Obviously, we don't know if VS ever reach 22cents level (say, during crash ... anything is possible, ya) ... so, we buy VS with RM40k for our last fund (totally RM100k). By the time it reaches 22cents, market would be in severe conditions and it might even go lower than 22cents but we have sailang-ed. We only wait for recovery.

All the above ... seems to be a no-brainer but we do have many issues to tackle. Assuming we only have RM100k fund, would you put all eggs in one QL basket? Or buying into VS?

Point for all to ponder ... as I m still wondering too ... how to allocate my funds during crash.

Logically speaking, we only start to buy during crash ... but can we wait or start buying VS now at RM1.75? oppss ... if u have not bought into VS, you may get it cheaper now at RM1.55.

Fix our funds to FOCUS into very few stocks that we like to buy ... and average-down and be a long-term investor. Then ... you will out-perform most of traders who go-in-out ...

That is what I m going to do.

TEH