As we started the New Year 2018, something surprising in the market has emerged. As we start the second month of the new year, on February, another market surprise has also emerged. Investors were greeted with a major long overdue 10% correction from the US markets.
These few days, all Asians who have the influence of the lunar calendar are entering another New Year celebration. Both China, Hong Kong, Taiwan, Korea and others are having stock market close for public holidays.
For the Chinese, during this festival, we often greet each other “Gong Xi Fat Cai” which means congratulation to you because you have made it big for your financial gain. It is an ironic greeting for Asian stock players, we all know that markets have just dragged everyone into the deep red sea recently. Most investors are still hiding in their closet shivering with fear. However, almost all global markets have already resumed their North Pole travel journeys.
Markets Slowly Recovery
After that big drops, Market did not reverse with strong rebound. It shows worldwide investors were badly bruised by the sudden market drop. This is also a good lesson given by Mr Market that investors should not chase after vertical market surge. After this correction, maniac’s frenzies will have been sheaved off. Market would return to more normal slow trend. In this way, this bull can be healthier and run a little bit longer. Perhaps, this year, 2018 is not a year for recession to kick in yet. It is still a safe year for investment.
Those who have invested fully without any risk strategy installed, you would have been shaken off. And would probably still be staying by the side licking your wounds. Those who have installed with risk management construct, you would still be in the market as soon as the market resumed bullishness. When market returns to its previous height, you will see how different it would be with risk management construct and those without it.
After this market correction, I hope we all would have learned how important to construct a portfolio with risk management strategy instead of fully invested.
At this moment, I would recommend every investors to fully invested, take the ride to the top and later on, you can construct your risk portfolio. US markets are more stable now and have steadily rising. Hopefully after Chinese New Year break, there will still be opportunity for late comers to join the party.
Gong Xi Huat Cai, if not from the previous year but at least for the following year!
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