In this high volatile market, many investors would have been thrown out by market waves. Market has a insidious sting to fool investors most of the time. In this transitional period between bull and bear market struggle, it is very difficult to decide to keep your finger there or take your hand totally out of the investment market.
Last week, we have witnessed one of the fool tricks the market played against investors. When President Trump announced USD 50 billion Tariff against China, market tumbled panicking with the fear of China retaliate back. The fear was the triggering of the trade war between the two global giant economies. When reality comes few days ago, China did finally fought back by listing commodities import from US costing USD 60 billion worth. Investors expect market would tumble even more, but US markets turned north instead.
After then, gaining his wild confidence, President Trump announced plan to further list USD 100 billion tariff against Chinese import, US markets tumbled immediately again. But Asian markets did not response accordingly. Hong Kong market has even surged strongly for 1.11% gain during market close in that day.
Market has its nature of unpredictability and fooling market forecasters all the time. It’s like its nature and ambition to make investors lose money so that they will be kept away earning passive income. As a reason, anyone who comes in as a gambler thinking it’s easy to earn money in the stock money would have their own lessons now. This also includes those involving with mutual fund.
Greatest Cost in Investment Process
I used to shy away from market when I saw market volatile was strong and expected market to go down. I planned to come back when market touched bottom after the big bear circle. However, the big bear did not come after waited for quite some times. Market turned out with a strong bull instead. And I missed out that big bull. Later on I realized there was so called “opportunity cost”, the largest cost of all investors who stay away from market just to avoid volatility.
Developing a risk management strategy is the only key if anyone wants to profit from investment. Market volatility will always there whenever and wherever it may be. The best time to develop and test out your risk strategy is during high volatile period like it is now.
Developing Investing Strategy
Investing now has to see to it that when market rises, you have a way to take profit. When market tumbles, you will also have a way to protect your capital and harvest the profit from the market swing if possible. In other words, you should invest in such a way that you expect market tumbles any time, if not, however you will also benefit when market rises. In this way, market turns either way, you will be happy.
Definitely this is not a time to aim for high profit, but a time to develop our investment skill. The skill of sailing through the investment storm. If we can survive sailing through this big bear if it comes, we would surely be successfully when market turns around from the bottom after the big bear ride.
I hope you will be there with me enjoying this roller coaster ride, not only surviving but even profiting big from it. Though earning big is not our present aim, but who knows, it might turn out to be a blessing in disguised?
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