2020 - Year of the Bear Market
Bear Market declared
This week marks the official start of the bear market, with the DJIA declining more than 20% from the recent peak in Feb 2020. S&P500 also reached a low of 2480. S&P500 has suffered a drop of 27% from the recent peak. Seems like Mr Market has also caught the bear virus.
With the bear market underway, when should one enter the market? When will the market bottom? Should i cut losses now?
A lot of questions in my mind now. Maybe it would be good to take a look at the 2008 Great Financial Crisis and see if one could get from insights from it.
Great Financial Crisis (GFC) in 2008
(Note: the below information are from Wikipedia)
During the GFC, the bear market was declared on 27 June 2008. It was also the US Election year in 2008. The market bottom occurred on 9 March 2009. That's about 8 to 9 months (3 Quarters) from the first day of the bear market. The cumulative decline from the market peak to the bottom was around 54%.
My Plan
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This week marks the official start of the bear market, with the DJIA declining more than 20% from the recent peak in Feb 2020. S&P500 also reached a low of 2480. S&P500 has suffered a drop of 27% from the recent peak. Seems like Mr Market has also caught the bear virus.
With the bear market underway, when should one enter the market? When will the market bottom? Should i cut losses now?
A lot of questions in my mind now. Maybe it would be good to take a look at the 2008 Great Financial Crisis and see if one could get from insights from it.
Great Financial Crisis (GFC) in 2008
(Note: the below information are from Wikipedia)
During the GFC, the bear market was declared on 27 June 2008. It was also the US Election year in 2008. The market bottom occurred on 9 March 2009. That's about 8 to 9 months (3 Quarters) from the first day of the bear market. The cumulative decline from the market peak to the bottom was around 54%.
2020 Bear Market
The market is around 27% down from the peak. If assuming the situation is really bad, there could possibly be further declines in weeks or months to come. I do not know when will market bottom but if it ever gets to a 50% decline from the peak, i think we should be near the bottom. Just my guess, please take it with a pinch of salt.
As to when will market bottom, I am no fortune teller and honestly don't know. It depends how quickly the coronavirus could be contained in the next few weeks in some of the larger countries, and also if there's any other developments negatively affecting the market sentiment. One could look at the GFC information as reference perhaps.
My Plan
I am looking to buy and accumulate more stocks and ETFs in the coming months. For me, I would accumulate my buys at every 10% decline from peak, say at 30%,40%, 50%.
Some of the local SG stocks (DBS - fallen by more than 30% from 52 week high of 28.64, OCBC - fallen by around 28% from 52 week high of 12.19, UOB - fallen by 30% from 52 week high of 27.97) look quite attractive now.
Some of the local SG stocks (DBS - fallen by more than 30% from 52 week high of 28.64, OCBC - fallen by around 28% from 52 week high of 12.19, UOB - fallen by 30% from 52 week high of 27.97) look quite attractive now.
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