Why A Stock Market Crash Can Be A Wonderful Thing For Singaporeans

Unless you have been living in a cave, you should know that stock prices have been falling drastically since the start of the year and is expected to continue even further.

Many people are frantically trying to sell off whatever shares they have left amid the global recession and prices are slashed more than your annual year-end sale.

Despite this, there are a growing group of knowledgeable investors who are waiting patiently for the perfect opportunity to invest. Want to know the reason why?

Here are 3 reasons why more Singaporeans will start investing in 2016…

1.) Inflation is real; and scary

If you think that the word inflation is a term used by economist just to scare you, think again. Unless your salary has been increasing by 5% per year, your purchasing power is dropping. To illustrate the effects of inflation, assuming you have $1000 in the bank (assuming negligible interest rates) after 10 years you would have approximately $675 left taking into account a 4% inflation.

That’s nearly half your wealth vanishing without you even knowing!

On the other hand, investors can rejoice because as companies raise the prices of their goods and service means higher revenues for them. Therefore, the stock market index will almost always go up in the long run.

 

2.) The 2016 recession a double edged sword

Imagine walking into a Prada outlet and the manager of the shop announces that they are having a 50% sale for 1 day only. Items would be selling out like hot cakes!

That was exactly what happened during the great financial crisis in 2007-2009

When stock prices were down by 50%, many people were selling off stocks to cut losses. But value investors were secretly buying up the shares and made a hefty profit when the market returned to its peak.

 

3.) World’s greatest investor Warren Buffet Made His Billions by investing… even during the economic crisis
In 2008, Warren Buffett declared that he was buying up stocks during the global credit crisis. As a result, he has made billions from it.
I quote: “be fearful when others are greedy, and be greedy when others are fearful.”
Here’s a screenshot of Warren Buffett’s net worth ever since he started value investing at the age of 14.

Is Value Investing for You?

There are 2 types of people in this world.

People who are able to spot such golden opportunities but do not take action at all. They watch other people grab at the opportunity and regret at the end of the day and they miss opportunity after opportunity.
 

CALVIN COMMENTS:

A LOOK AT SIFU WARREN BUFFET PERFORMANCE SHOWS THAT THE LONGER YOU INVEST IN VALUE STOCKS THE GREATER THE MULTIPLCATION LONGER TERM

 

WARREN HAS ONLY 5K AT AGE 14. BY AGE 20 HE HAS ONLY 20K.

 

10 YEARS LATER BY AGE 30 WARREN BECAME A MILLIONAIRE.

 

AT AGE 59 WARREN HAD 3.8 BILLIONS AFTER 45 YEARS IN THE MARKET

BUT FROM AGE 59 TO AGE 66 HIS NET WORTH JUMPED TO 17 BILLIONS

THEN FROM AGE 66 TO 72 HIS NET WORTH JUMPED FROM 17 BILLIONS TO 36 BILLIONS (MORE THAN DOUBLE IN 6 SHORT YEARS)

AND FROM AGE 72 TO 83 HIS NET WORTH JUMPED FROM 36 BILLIONS TO 58.5 BILLIONS

SO COMPOUNDING INTEREST IS THE 8TH WONDER OF THE WORLD

SO LEARN TO INVEST IN VALUE SHARES LONGER TERM. THE LONGER THE BETTER AS OPPOSED TO SHORT TERM PUNTING

 

WARM REGARDS

 

CALVIN TAN, SINGAPORE

AND THINK LONGER TERM NOW WHILE PRICES ARE GOING DOWN TO BARGAIN BASEMENT LEVELS.

THIS IS THE TIME TO SLOWLY BUY UP ALL VALUE STOCKS OVERSOLD

 

LIKE BUYING PUBLIC BANK AT 80 SEN IN 1997/8

LIKE BUYING NESTLE AT RM11.60 IN 1997/8

THOSE WHO PANIC SOLD PUBLIC BANK AT 80 SEN OR NESTLE AT RM11.60 WILL MISS IT FOR EVER.

 

SO THOSE WHO SOLD DOWN VALUE SHARES IN THESE TIMES OF PANIC WILL LIVE TO REGRET FOR EVER.