As I have mentioned in previous article, the conflict between Iran and the US may not bring down the market. The reason for my prediction was the inability for Iran to fight back with enough strength that will threaten the US market with fear. In that article, I pointed out that investor should avoid aiming for the perfect timing to enter market at its deepest retrieve. We should try to enter as little as 10% regardless of market condition.
There was nothing happening on Monday. The US markets remained calm and undisturbed. So, I told my Platinum Group members that if Iran does not react by Monday or Tuesday, market investors will forget all about the event.
Market False Alarm
By Tuesday night (US hours), Iran fired a score of rockets into the US military base in Iraq. US Futures indexes ran wild and global market indexes were all spinning like crazy. Gold and Oil Futures indexes shot up through the roof, equity Futures indexes dip down to hell. At that time, I wondered how many mutual fund investors have taken the trigger to enter the market as what I have advised little by little. This kind of initiative is taken to avoid aiming for the perfect timing and shot at the bottom after market indexes go down a few days later.
Well, I walked as what I have preached. I have placed orders for all my portfolio little by little. However, at the end of the day, all US equity markets closed at their day heights. It’s disappointing to me then, I have bought all funds at their heights, instead of their low’s!
The US market behaved in such a way was because the US President has given hint to calm the market. He has decided not to go all out for war against Iran. He realized that Iran was just firing missiles to air out their unhappiness as those missiles did not hurt any US custodies. And the US military did return some “peaceful” missiles that did not harm any Iran’s army as well. That ends the whole short-lived war show!
For the next following days, the US continues to roll out positive economic reports. With the Chinese news reported that they are sending their team members to sign the first phase trade truce agreement in the US as the background, the US equity indexes continue to climb higher and higher. All of them created new historical heights. It was just as crazy as it could be!
Waiting or Jump into Risk
For those of you who are still waiting for perfect timing, you may feel glad that you did not enter market in such an awful timing. However, your investment weapon now is most probably still empty.
At the end of the week, all my new entries that entered the US and emerging markets reported blue even they have entered market at their heights. Initially I thought I went into the market at the worst timing. When you thought the market prices were too high, as the saying goes, high market prices can even go higher. This is what the reality turned out to be.
As I have shared with my Platinum group, my recommended investment risk target for 2020 is between 60% to 80% of total capital. I was able to enter only about 20% at this moment. As of now, I am still hoping market will come crashing down in the next few trading days. If not, I will have no worry. Because my 20% “weaponized” capital will start working for me if global markets continue to fly.
The most important lesson I have learned here is that the 10% principle I shared last week really works well. I am now in such situation that I have a portion of my capital ready to work for me, but I am also hoping for market to come crashing down by next week or so.
One of my financial course trainers said, in the field of investment business, just hope for market to turn out as you wish without doing anything is the worst thing you could ever do. Because most of the time, it wouldn’t come true according to your wishes. Most of the time, whenever investor wish market will go well because he has fully invested, then market crashes badly. Whenever investor waits for market to crash so that he can invest at the bottom, market crash seems never come.
So, the best thing we can do is to invest a little and wish market will crash coming down, rather than invest all and wish market will go up smoothly all the time. Do you see my point?
Happy investing but invest safely!
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The view and opinion expressed are personal views of the author and are subject to change based on market and other conditions. This write up does not constitute sole advice for investment decision. Investors are advised to do further reading and research to conclude individual decision.