Saturday, 18 May 2013

Bull market is here!! Buy before its too late!!

Dow Jones and S&P 500 have broken historical high. STI has broke the key resistance of 3,300 and staying healthily above 3,400, displaying substantial volume.

Suffice to say, we are in a bull market now!

There is a flush of IPO hitting the market all of a sudden. MGCCT, Croesus, Asia Pay TV Trust, Soilbuild, the upcoming UOE hospitality assets spin-off and SPH REIT. My friends have been checking with each other on their stock earnings; my aunt is lamenting that she did not enter aggressively and is experiencing the itch to invest.

On the contrary, I chose to stay on the sideline and not join the fray. My peers' jaw dropped when they heard. "What? You are not buying now?! Market is on a roll!!" is the most often-heard response.

Why is that so?

I prefer to purchase stocks when the market is at a lull; when there is not much activity and volume is low. This means that I can take my time to analyse fundamentally solid companies, and collect them slowly. The keyword here is 'collect': buy on the dips, buy slowly and stealthily. When market is hot, it denies me to buy good stocks at low price, as it would have been bid up by aggressive buyers..

However, I do set aside a small portion of my dry powder to 'tikam' in the IPO market, for quick staging purpose. This allows me to earn some coffee money and keep me occupied with some actions. The strict rule is to sell for quick profit on the first day, and never look back.

I will wait patiently for a market correction (hopefully > 15%) to arrive before I purchase more stocks. My action plan is to carve my opportunity fund into several portions to buy into market correction. A 15% fall will trigger the first 30% tranche; the next 20% will activate the next 30% tranche etc.  I will not liquidate my positions yet, as some of them are dividends play meant for long term cashflow, and I do believe that the bulls still have some leg to run.

Meanwhile, stay calm, remain composed and enjoy the ride up!

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