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.

I did my last bit of investing today morning in the Singapore market just to catch the fall then. Mostly to buy the dip on the individual stocks, equity and REIT ETFs in my portfolio. I thought the market would continue to fall in the afternoon but it started to go back up.

And my last batch of limit positions couldn’t go through so I just let them expire for the day. No point chasing an uptrend. When the European markets opened in the evening with such a strong start, I figured it’s probably a rebound so I can stay out from manual investing for the rest of the day.

I had already made funds transfers into my robo-advisor accounts last night that should be invested when the London and New York markets open today evening and night respectively. This is just in case the developed markets continued to fall. But when it rebounds, it’s still fine because these are not large amounts of funds transfers.

Not a bad thing to have what I call a rebound day. Nothing significant has changed with the virus situation and global economy. But just that buyers are piling back in to buy the dip and push up the prices. This is the time for me to stop any manual investing and funds transfers into my robo-advisor accounts.

Take a breather, calm myself down and remind myself to be patient. Most importantly, this is when I reassess how my strategy is working and whether there needs to be any changes. Not in the overall approach but in the way I execute it. Because it’s difficult to have clarity when things are moving so quickly in the markets. It’s easy to fall into the trap of being too aggressive or too passive.

I have been asked about the size of my investment cash after writing about investing my 1st batch of S$100,000 into the markets. I have always said on my blog that I keep a large cash balance but I admit that I haven’t been forthcoming with its size.

If you are a regular reader of my blog, it’s possible to piece together the size of my cash balance. Not because I intentionally drop hints on it but I do write often about my asset portfolio, asset allocation and net worth.

My wife and I have been working for a decade since 2010. We have been investing in bits and pieces from the beginning. Seen some bear markets but mostly bull markets. Went through a few crises but nothing as scary as the Global Financial Crisis of 2007/2008.

In these 10 years, we have learnt these lessons about ourselves. Just a few simple ones that have served us well as time passes:

1. We are bad at individual stock picking. So terrible that we are still averaging down on the shitty stocks in our portfolio in the hope that we can sell them off in the future at higher prices. And hopefully break even.
2. We are good at buying ETFs. They can be purchased automatically using monthly investment plans and regular funds transfers into robo-advisor accounts. Manual purchases happen when there’s big downward price movements.
3. We are good at finding stable and decent-paying jobs relative to hours spent at work and overall work environment. Career navigation is where we spent the most of our time on because we know this is going to have a far more significant impact on our lives. In terms of everything from personal finances, investing to family planning.
4. I’m good at strategising plans and bad at executing them. My wife is good at executing plans and bad at strategising them. Together, we are able to take high risks and make opportunistic moves. We find what works for us and we just keep going at it until we improve. And we learn from everyone around us that we are close to.

We understand that timing is crucial to building wealth. In the Global Financial Crisis of 2007/2008, the markets went into free fall and prices dropped by so much over a period of several months. We were students then and had no cash to invest.

In the subsequent crises since starting work as graduates in 2010, we had some cash savings but nothing significant. As our careers progressed and salaries went up, our cash balances increased gradually over time. In the last crisis of 2016, our pay was decent and we had a big cash balance. But we were too passive with our investing. We bought the dip but didn’t deploy our cash funds sufficiently.

It has mostly been a waiting game since. For a big fall in the markets to coincide with an even stronger earning power and bigger cash balance. With a more aggressive strategy on cash deployment. It’s taken us 10 years of making dumb mistakes to get to this point. I’m 34 and my wife is 32 this year. We still don’t have much life experience in any way. But we are good at learning and improving together.

So here we are at this point in time. We have 3 batches of S$100,000 to invest, one batch for each of the three phases i.e. S$300,000 of investment cash. We have already used up the 1st batch of S$100,000 so we have S$200,000 of investment cash left. And we have an additional S$200,000 of spending cash to keep ourselves afloat for 2 years if we end up losing our jobs in a long drawn-out recession.

No point investing at the right time in a bear market but having to cash out our investments at depressed prices because we have no monthly income to meet our household spending and regular investment plans. We have to get to the bull market for the investments to pay off.

If both of us can keep our jobs, we will invest that last portion of S$200,000 into the markets in the final phase. Because we won’t need the spending cash to survive since our monthly salary income is more than enough to maintain the household spending and regular investment plans.

If one of us lose our jobs, we will invest only S$100,000 instead. Because our monthly salary income will only just be enough to maintain the household spending and regular investment plans. And we may have to draw down on our spending cash to survive.

I stayed up late tonight to write this post because it’s been an eventful day and night of investing. In the past 2 weeks, I have invested about S$30,000 into the markets. And I was getting myself ready to increase the amount to be invested if the markets continued to drop. I didn’t think this would happen so quickly.

Just 2 days after writing my last post, there was another significant fall in the markets. Even bigger than the previous one. I had already planned for this so I invested another S$70,000 into the markets. Which concludes Phase 1 Round 2 for me as my 1st batch of S$100,000 has been utilised. Through manual investments of mostly ETFs and some stocks as well as funds transfers into my robo-advisor accounts.

The speed of the fall in the markets did catch me by surprise because I thought it will take a few weeks for such a significant drop to happen. I was only planning to invest another S$40,000 into the markets. But decided to go ahead with the additional S$30,000 because the falling price levels kept triggering my investment actions.

It’s not a bad thing for me when the markets are accelerating their falls. Because the job cuts have yet to happen. Which means as long as I can stay employed, my cash position can continue to be replenished. So I can continue to invest every month without worrying about drawing down the cash balance by too much over time.

Speaking of job cuts, I heard news in the pipeline that contract staff in my bank are having their contracts shortened from 1 year to 6 months. And some of their contracts are not being renewed. This always happens in every recession at a bank. Contract staff are usually the first to go. This is why I don’t go for contract roles even if they pay more than permanent roles.

I have a more long term view of my career in mind. Because I still believe only staff in permanent roles will end up getting the professional and personal development necessary to progress up the ranks. To get that bigger payoff in salary and bonus at a later stage. I just have to accept that I might lose out at the start and try to catch up & even exceed eventually.

Anyway, my 1st batch of S$100,000 has been invested into the markets. My cash allocation in the asset portfolio has gone down from 50% to 40%. While my equities allocation has gone up from 10% to 20%. It’s now a more evenly distributed asset portfolio, which better positions me for Stage 2 Round 1.

From here, I will be tapping into my 2nd batch of S$100,000 to be invested into the markets. I don’t think the speed of utilisation for this 2nd batch will be as quick as the 1st batch. At some point, the markets are going to hit a resistance level. When the deteriorating financial markets actually have to wait for the real economy to get worse to catch up. Before it continues to fall.

Or the real economy actually improves over time and things are not as bad as they seem. At which point the financial markets will rebound since they have been over sold. It’s difficult to make a call at this time but I have to be patient. With every month I stay employed, my job provides me with enough salary income to take another shot at the markets. And everything becomes clearer with time so I just have to wait and stick to my strategy.