Recap: Steps To Take During Market Correction

As an investor, we should strive to be better than ourselves.

This Coronavirus situation gave me an opportunity to relook at steps to take during market correction.

I had written 2 evergreen post in 2018 (post 1, post 2) where wrote about the situations and the possible actions to take during market correction. 

Nevertheless, the current situation allowed me to take a closer look at the steps. 

Basically, I have further broken down into a 4 step process: SELL, FOCUS, CONCENTRATE, PHASES.

This 4 steps basically meant that:

We should SELL our weak companies to increase our cash holdings. Then we should only FOCUS on companies in our portfolio and not our watchlist, unless those are more attractive (meaning margin of safety exceeded those companies on your portfolio). The idea is to reduce the number of holdings in your portfolio and increase your cash pile in order to CONCENTRATE on purchasing those companies in your portfolio that will recover the fastest when economy recovers. Finally if you have a huge warchest, purchase in at least 2 PHASES.

Nevertheless if you are, like me with little cash, you can consider to be 100% vested.

Some of you may question if I believe the bottom is near, thus I stated to be 100% vested? The answer is No.

This is because, I am looking individually at those companies in my portfolio.

As explained by a member of my Fundamental Scorecard Telegram Group stated, "to buy or accumulate on the company because it share price has reach your target price and you feel that you have a significant margin of safety". That is why I will consider to be 100% vested.

In addition for those that are timing the market, its time to act. If you continue to shift the goal post, the goal will never be scored. 

These information were shared with members of my Fundamental Scorecard Telegram group. If you are interested, feel free to join us. 

We talk about everything under the sun about investing with a focus on US, HK (slightly lesser) and SG companies.