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Preparing for the stock market crash
08 Jan 2021 (108 views)

Mr. Tan,
What are your preparation in case there is a stock market crash?

I have taken the following steps.

1.  About 30% of my assets are held in cash. I can use the cash to buy stock if the prices come down to a lower level after the crash

2. Most of my stocks are invested for long term value - i.e. low price earning ratio with high dividend yield. I have also invested in the stock with past savings and do not use any leverage. The crash will not affect me.

A small proportion (about 25%) of my stock are more speculative. I monitor them closely. I should be able to sell them in the event of a crash, at a loss. The impact will be small.

I believe that many stocks are at an insanely high level and are subject to the risk of a severe crash. We do not know when the crash will occur, but it can come at any time.

Tan Kin Lian
 


Preparing for the stock market crash
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Mr. Tan,
What are your preparation in case there is a stock market crash?

I have taken the following steps.

1.  About 30% of my assets are held in cash. I can use the cash to buy stock if the prices come down to a lower level after the crash

2. Most of my stocks are invested for long term value - i.e. low price earning ratio with high dividend yield. I have also invested in the stock with past savings and do not use any leverage. The crash will not affect me.

A small proportion (about 25%) of my stock are more speculative. I monitor them closely. I should be able to sell them in the event of a crash, at a loss. The impact will be small.

I believe that many stocks are at an insanely high level and are subject to the risk of a severe crash. We do not know when the crash will occur, but it can come at any time.

Tan Kin Lian