If you believe the current correction is no different from the 2011Fiscal Cliff and 2013 Taper Tantrum corrections, and this 2009 bull market has legs for another push up to STI 3800 next year and beyond, you would respond and act accordingly during the next weeks.
Buy the freaking dip?
If you believe that trends don’t go on forever and this 2009 bull market cycle is coming to a close, then you would be preparing for the start of the next bull market cycle like in 1998, 2003, 2009.
Load up when there’s maximum doom and gloom?
Wait a minute!
Don’t they look similar?
Not on your life!
What’s the difference then?
The bleeding heart calls it warchest.
The fisherman calls it pillow stock strategy.
I call it cash as ballast. (I like the imagery of me in my little sailing boat braving the rough seas)
If you just started out your investing journey during the last 1 to 2 years, don’t worry if you don’t understand.
You’ll figure this out for yourself when discover what it feels like to see the STI double only for your portfolio to break-even…. (next cycle, you swear to yourself never to make the same mistake twice!)