Series of Thoughts on Recession
Recession/Stagflation is Coming!
First and foremost, I believe I was wrong when I stated that there is no recession.
But what exactly is a recession? How do you know a recession is on its way? Negative growth for 2 quarters?
Do you understand what a recession is?
Have you tried applying for jobs for more than a year and still have no work, and you need the government to step in to ensure that there is at least 1 job that is sponsored by them and only pays S$2k for 1 year?
I DID. In addition, I had to pay my tuition loan at that time ON MY OWN.
So really, I don't think many of you understand recession at this point.
Ever Been Thru the Cycle where Oil went from $4 to $20?
Yes, clearly someone did, and the message was relayed to me. I was advised to SELL EVERYTHING.
The war is mostly to blame for the rise in oil prices. Even after the war is over, oil prices will remain high due to sanctions. This will lead to ongoing inflationary pressures and, eventually, higher interest rates.
But selling everything is probably not something I will do. Because I can't (not because I'm bagholding) and I can't keep cash for long. So I will stay vested.
However, if someone asked me what to do, I will say:
- Hold on to your convicted companies. Sell the ones you have doubts.
- Cash is still king.
- If you need to invest, have a plan or go in at tranches.
- Don't sell everything.
Furthermore, I feel that market cycles have accelerated since the epidemic. It will only appear when no one is looking. Not with everyone yelling Recession.
If you thought you had felt hopeless, you ain't feeling anything.
It wasn't the market that made me felt hopeless, but it was in reality where my daughter was hospitalized last month that I felt it.
It was especially real when I was bringing her to the hospital.
Long story short, she has since recovered. But I never wanted to feel that again.
So if you were feeling hopeless now, I will suggest you to just hold on because everything will be over before you know it.
RRP balance climbed to an all-time high of $2.045 trillion
A LOT OF MONEY IS STILL ON THE SIDELINE. When there are no other options, these funds will return to the market. Let us simply wait.
The 21.8k Experiment
Oh, on a side note, that experiment failed. I will probably be closing the facility at the end of the year.
Basically what I want to say is - everything will eventually passed and things will be better soon.
It is similar to stepping in quicksand. Once you step into it, you will strive to crawl out because if you give up, you will sink.
(Scientifically, you will just be stuck!)
Stay vested. Stay Safe.
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Stay tuned for the next write up!.