Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
If the market enters a bear market, don’t rush to sell off stocks. (Rawpixel pic) Many things are uncertain in life, but one certainty is that the stock market will always experience corrections, pullbacks and bear markets.
So, she doesn't want us to sell our equity in what may or may not be a crash; this is surely a bad move. But, she wants us either at the start of or fully into a market crash to become involved in her 4 choices. So, bond prices would likely already be much higher.......flight to safety, eh? And the other choices, not for this house. Are her choices only related to choices in Malaysia ???
Who is Anna? She's has a working brain, for sure; but I'm a bit confused about here investment advice and any form of qualifications for this area of money, eh???
@johnN Do you agree with these positions she proposes??? If so, please explain; so that I might further understand why this post from this young business women from Malaysia is here. Are her recommendations global in nature or only the Malaysia markets???
Hi sir @_catch22 happynew yr. My friend forward me the article....thought she made some good points if u expect a crash.... I don't fully agree w her views though. Probably need 80 /20 for us for at least another 15 20 yrs...if she changed the formats tand include ustrasuries in point two/three her article may be better...will email my friend and will ask
Catch, I don't see anything wrong with the post. In fact some good advice I think. Probably the same advice there as here in the US.
She ties her suggestions together with closing statements. Basically giving diversification options.
As always, the best way to protect your assets in a market decline is to diversify your portfolio... More tempered growth in China does not mean other economies in Asia or elsewhere will falter.
Headline: 4 Brilliant Ways To Survive a Stock Market Market Crash
Unless the author has a known penchant for satire (unlikely) the 4 suggestions don’t match the title:
1. Buy some bond ETFs
2. Put money in money market accounts
3. Open a high-yield savings account
4. Invest in annuities
As @LewisBraham has mentioned in the past, writers of articles do not generally determine its title. Title selection, as I understand it, is determined by someone whose goal is to elicit maximum “reads” or “clicks.” So let’s be slow to criticize the writer for the hyperbolic title.
“Brilliant” these suggestions are not. They’re mostly pretty basic “Investing 101” options that anyone who’s invested at all for 3-5 years ought to have come into contact with and be somewhat familiar. Sometimes I think we ought to develop a profile here (perhaps in pyramid form) labeling investor knowledge levels 1-3: (1) Beginner, (2) Intermediate (3) Advanced. Those submitting articles like this might in a few words explain which level of investor the article is aimed at (Beginner).
Consider the reference to a stock market crash. Novice investors often think in black & white terms wherein “crash” is viewed as the diametric opposite of “a good market”. I agree with @Catch22 that there’s little, if any, discussion of when to make the decision to divest of equities, the degree to which that should be done, and when to know it’s time to move back into equities. Further, each suggestion (particularly annuities) opens a whole new can of worms which would require further discussion. In this case (annuities) a “level 3” concept is being tossed out casually in an article aimed more at “level 1” investors without adequate analysis.
First and foremost I feel one should invest based upon their risk tolerance and income needs. For me, my all weather asset allocation is my ticket that allows me to stay invested through the ups and downs that come with stock market investing. Below is how I govern.
My all weather asset allocation of 20% cash, 40% income and 40% equity affords me everything necessary to meet my needs now being retired and in the distribution phase of investing. The benefit of this asset allocation is that it provides sufficient income, maximizes diversification, minimizes volatility, and provides long-term returns.
The 20% held in cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback. In addition, cash helps stabilize a portfolio during stock market volatility. Example of investments held in this area are cash, money market mutual funds and CD's.
The 40% held in the income area provides me ample income generation to meet my income needs in retirement. It is a well diversified area that incorporates a good number of income generating type funds. Some examples of investments held in this area are ISFAX, PONAX & PGBAX.
The 40% held in the equity area provides me some dividend income along with some growth, that equities generally provide, that offsets the effects of inflation over time. Some examples of investments held in this area are NEWFX, SVAAX, SPECX.
Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way principal grows over time. For the past rolling five years, as I write, my average total return has been about 6.5% with an average income yield of about 4.3%. Under normal conditions I would have withdrawn no more than 3.25% of the portfolio's average value leaving the rest for investment purposes. Since I retired about five years ago my principal has grown along with my income stream using this format.
Comments
So, bond prices would likely already be much higher.......flight to safety, eh? And the other choices, not for this house.
Are her choices only related to choices in Malaysia ???
Who is Anna? She's has a working brain, for sure; but I'm a bit confused about here investment advice and any form of qualifications for this area of money, eh???
@johnN Do you agree with these positions she proposes??? If so, please explain; so that I might further understand why this post from this young business women from Malaysia is here. Are her recommendations global in nature or only the Malaysia markets???
Thank you.
Catch
She ties her suggestions together with closing statements. Basically giving diversification options.
Unless the author has a known penchant for satire (unlikely) the 4 suggestions don’t match the title:
1. Buy some bond ETFs
2. Put money in money market accounts
3. Open a high-yield savings account
4. Invest in annuities
As @LewisBraham has mentioned in the past, writers of articles do not generally determine its title. Title selection, as I understand it, is determined by someone whose goal is to elicit maximum “reads” or “clicks.” So let’s be slow to criticize the writer for the hyperbolic title.
“Brilliant” these suggestions are not. They’re mostly pretty basic “Investing 101” options that anyone who’s invested at all for 3-5 years ought to have come into contact with and be somewhat familiar. Sometimes I think we ought to develop a profile here (perhaps in pyramid form) labeling investor knowledge levels 1-3: (1) Beginner, (2) Intermediate (3) Advanced. Those submitting articles like this might in a few words explain which level of investor the article is aimed at (Beginner).
Consider the reference to a stock market crash. Novice investors often think in black & white terms wherein “crash” is viewed as the diametric opposite of “a good market”. I agree with @Catch22 that there’s little, if any, discussion of when to make the decision to divest of equities, the degree to which that should be done, and when to know it’s time to move back into equities. Further, each suggestion (particularly annuities) opens a whole new can of worms which would require further discussion. In this case (annuities) a “level 3” concept is being tossed out casually in an article aimed more at “level 1” investors without adequate analysis.
My all weather asset allocation of 20% cash, 40% income and 40% equity affords me everything necessary to meet my needs now being retired and in the distribution phase of investing. The benefit of this asset allocation is that it provides sufficient income, maximizes diversification, minimizes volatility, and provides long-term returns.
The 20% held in cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback. In addition, cash helps stabilize a portfolio during stock market volatility. Example of investments held in this area are cash, money market mutual funds and CD's.
The 40% held in the income area provides me ample income generation to meet my income needs in retirement. It is a well diversified area that incorporates a good number of income generating type funds. Some examples of investments held in this area are ISFAX, PONAX & PGBAX.
The 40% held in the equity area provides me some dividend income along with some growth, that equities generally provide, that offsets the effects of inflation over time. Some examples of investments held in this area are NEWFX, SVAAX, SPECX.
Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way principal grows over time. For the past rolling five years, as I write, my average total return has been about 6.5% with an average income yield of about 4.3%. Under normal conditions I would have withdrawn no more than 3.25% of the portfolio's average value leaving the rest for investment purposes. Since I retired about five years ago my principal has grown along with my income stream using this format.