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Thursday, October 30, 2008
How Low Can The Bourse Go
The global economy turmoil has cause most of the stocks breaking few year low. And the low keep going lower. Then a lot of people started asking me, "Do you think it is time to buy stocks now?" Well, I do not know. In fact, no one will know how low can these stocks get. During the pessimistic environment, those financial advisor or economist will reduce or downgrade certain companies. It always happen this way. When it is good, they will say that there is possibility of reaching higher and higher, until it burst. Then during economy turmoil or bearish environment, they will say, the low will get lower. The only thing we can do to avoid losses is to accumulate the stocks of prospective companies and to average down when it gets lower. Only we ourselves know how risky we want our investment to be and judge the situation with full of wisdom. Remember...... "Price is what you pay. Value is what you get." by Warren Buffett? This quote is to remind us that we are to judge how much we are willing to pay for the share of a company and how we see the value in it. Remember, opportunity always come and knock on our doors. If we think we cannot lose, then it is best to stay away from the stocks until we are comfortable. Else, we can start to accumulate, and when it rallies.......we sell on strength. Even if it does not rally, we can hold and keep for long term, provided the investment is not based on speculation. Or we can set a cut-loss point if it is speculation type of investment. Always remember.......we will not know how low it can go before it moves up.