Invested another S$30,000 into the markets

I’m glad I took a breather from investing since last Fri afternoon and over the weekend. It gave me time to re-assess my strategy and do a reconciliation of the flurry of investments I made over just a few days. I also did a cash count to check how much I had left versus how much I had invested.

I realised a few important things:

1. I invested more cash than I thought because I over-accelerated my investing rate especially on last Fri.
2. I had more cash on hand and hence left over than I thought because I didn’t fully account for the cash injection from the big day of my wife back in Dec 2019.
3. This bear market is a ferocious one with steep day to day declines and fake big rebounds. Which gives me little time to recover my cash balance after investing by using my salary income since it’s only paid on a monthly basis.

As the markets fell again today, I invested another S$30,000 into the markets from my 2nd batch of S$100,000. This time round, I opened the price gaps between each round of investing to capture more of the downward price movement in the markets. By doing this, I also slow down my investing rate to give the markets more time to drop before I enter.

It’s a learning process for me as I have never dealt with such a severe bear market before. I feel like this is one of those wealth-building opportunities that happen once every decade. The last time such an opportunity appeared was during the Global Financial Crisis of 2007/2008.

If you had the income and cash savings to invest into the markets at that point in time and survive the onslaught, your wealth would have taken a leap forward after the markets recovered. And the position size matters in that you would have to be earning decent income with a significant level of cash savings to make this work.

Otherwise, even if you get the timing right, insufficient income and cash savings would limit the gains you can make from such an opportunity. This means it would have to be a combination of the right factors and circumstances for you to capitalise on it. And the opportunity doesn’t come by often at once every decade. Means you have to wait 10 years for the next opportunity if you miss one.

I’m nervous and afraid not because I fear the markets accelerating its fall into a crash. My biggest worry is that I fail to take advantage of the opportunity that I have been given. The right factors and circumstances have combined into this moment for us. I have no idea how long it would take for us to be in this position again since our jobs can be so unstable and our family expenses will increase if we decide to have another kid.

My wife and I are earning decent income and we still have our jobs for now. The baby is 4.5 months old and we live in a 2 bedroom private property. The mortgage is manageable and we will most probably decouple by the end of the year. So I can buy the bigger 3 to 4 bedroom private property in my own name at lower prices if the property market falls significantly then.

Property prices are a lot stickier downwards and usually fall later than stock prices. People are much less willing to sell properties at lower prices than stocks. Which works for me because I need time to build up my CPF-OA anyway. My wife has been using her CPF-OA to pay for our monthly mortgage along with a cash top up from me.

I have not been using my CPF-OA to pay for our monthly mortgage for a few years now. And I have not made any transfers into my CPF-SA as well. All to build it up for a bigger 3 to 4 bedroom private property purchase in my own name for my family. My CPF-OA should reach more than S$100,000 by the end of the year and that should be enough for a portion of the downpayment.

I’m waiting for my wife’s salary to be credited next week to top up my cash balance. I’m hoping for a positive remuneration outcome next week so that I can get a higher salary and decent bonus to recharge my cash balance. I have to keep reminding myself to be patient and play the long game. And I recover my cash balance slightly every month so I need to stretch this out.