On 4 December 2018, Dow Jones crashed 800 points due to concerns over the intriguing trade wars between United States and China. The devastating decline in Dow Jones wiped off billion of dollars from the stock market as investors ran for their lives. Evidently, the spectre of a recession looms large, casting a dark shadow on Wall Street as investors are not convinced of the trade tariffs ceasefire.
The latest stock market rout came as Dow Jones emerged from a black October in 2018 which saw Dow Jones plummeted from 26,800 to 24,400. The massive decline of Dow Jones must have freaked out investors new to the game. But then again, it is important to note that Dow Jones had one of the longest bull runs in stock market history, surging from 7,000 points in 2009 to a high of 26,600 in January 2018.
Obviously, what goes up must come down. Investors must brace themselves for such corrections and avoid making rash moves that could result in losses. Indeed, it turns out that 2018 is a year of revelation as Dow Jones had experienced serious bouts of corrections.
On 5 February 2018, US Dow Jones plunged nearly 1,200 points, the biggest single-day decline on record. The sell-off in the US market came after a smaller decline of 666 points on the previous Friday. As expected, Asia stock markets suffered similar carnage. Straits Times Index was down 121 points on mid-day 6 February 2018. Then in June, Dow Jones suffered yet another setback as it saw more than 1000 points being eroded within the span of two weeks.
Is this the start of a bear cycle or just a healthy correction? The nightmare performance of Dow Jones had given investors plenty of sleepless nights. Many analysts had been forecasting the trend of the stock market. A good number of them predicted that a stock market crash is imminent. But the matter of fact is that nobody can predict the future. If someone tell you that he believes that the stock market will rise or fall, don’t believe him.
What is your strategy?
In Singapore, the stock market often takes the cue from Dow Jones. Many leading blue chips like SingTel, Singapore Airlines, Genting Singapore, etc had retreated to new lows for the past one year. In life, there is no good or bad stocks but right or wrong strategies. Should investors enter the stock market now in view of the increasing fear in the market?
Whether it is a healthy pull-back or a devastating stock market crash, it is important to have an investing strategy. Far too many people [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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