Bear Market Survival Tips

Bear Market Survival Tips

I was hoping never to write this article because if you are here reading this, it could only means a few things.

  • We are in a bear market
  • You are in a long position with a possibility of being overleveraging
  • You don’t have a system that prepares you for this scenario

Whatever the reason you are here, I think it is quite certain that we are experience a market that is downward cha-cha.

Disclaimer: It is anybody’s guess where the market is going to be. This should not be taken as a buy/sell/hold recommendation. Please consider your own context or approach a financial advisor for advise.

Bear Market Survival Tips
Bear Market Survival Tips

Despite the fear, bear markets are nothing new. To put everyone on the same page, a bear market occurs when major stock indexes like the S&P 500 fall 20% or more from their most recent peak. They’ve occurred 12 times since 1946, which is on average once every 8 years. Most pullbacks above 20% have been associated with recessions. Hence, with the perfect long storm, politicians all over the world are most concerned about recessions.

On average, a bear market is around 9.5months. This would mean most of us will live to tell the tale assuming we are not shaken out of our position (mentally or by margin calls).

As I get more and more about how to invest in a bear market, I hope this article will be able to share with you some bear market survival tips to prepare yourself for the weeks to come.

Bear market survival tips

#1: Avoid making impulsive decisions

This makes the top of the list. Emotionally, people don’t like to be wrong (whether temporary or in the long run). Hence, when they see their portfolio in the red, many people have the temptation to “reset” their portfolio. This is detrimental to your wealth management journey and it is just a “quick fix” of escaping the mental strain.

Stay calm is the key in bear and highly volatile markets. If your time horizon is decades away, the best thing to do is to invest as if nothing has changed. Let me give you an example of a $1000 investment in the S&P 500 between 1/1/2009 and 12/31/2018 (the last market crash).

  • If you stayed invested the entire time, you’d have $2,775.
  • If you missed the 10 best-performing days during that period, your account value would be $1,722.
  • If you missed the 30 best-performing days in this 10-year period, you’d be left with $918.

I can’t emphasize how important it is to stay invested.

#2: Build your positions regularly over time

With dollar-cost-averaging (DCA), no thinking is really required. However, I recognized that it may not be easy. I saw friends who were excited about the recent bear market and have dollar cost average down the last few months.

However, they are all now NOT adding into new positions as the market is still going down. DCA is somewhat easy to say but not easy to execute consistently unless there is a system that is set up. Personally, I have averaged down on the China Market previously and it is still a bleeding position (Check out my latest SRS positions).

Time will tell. That being said, stay tune for my upcoming article: The pros and cons of dollar cost averaging.

#3: Change your strategy, diversify or play defensive

As a wealth manager, I realized risk management is something that I constantly address. If you’re still active in the markets and it is not working anymore, it might be time go passive with a lazy portfolio. If you find yourself taking too much risk, you might want to seek a more defensive portfolio.

Your current life stage might not allow you to take too much risk as compared to before. It is vital to re-assess your situation, your goals, your risk tolerance and discuss with a professional on your options.

#4: Go contrarian (Not recommended)

If you are a trader, you know better than to go against the trend. Consider taking a buy put options position to bet against a stock or ETF, this allows you to have a limited downside (as you are a buyer of the put option) and able to participate in the downward trending market.

WARNING: I have to emphasize that buying options is speculative. They may expire and be worthless if you do not have a game plan. If you are wondering what this is, do not do it. 

Final Thoughts

Stay strong. This may be the pivoting moment in your investment journey. There are so many resources you can turn to nowadays to prepare for a bear market. You can consider what Warren Buffett is doing amidst the noises.

Definitely reach out if you need help. I will be more than happy to have a conversation with you.

Otherwise, please watch out for my next article: The Pros and Cons of Dollar Cost Averaging. [Update: The article is out!]

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

My SRS Portfolio March 2022

My SRS Portfolio and Thoughts [March 2022]

My SRS Portfolio March 2021
My SRS Portfolio March 2022

What an epic start to 2022. In just one quarter we are now in the amidst of the Perfect Long Storm, Russian-Ukraine Tension and Will Smith slapping Chris Rock. Maybe the saving grace is that we will be able to travel to Malaysia (with more freedom) from 1st April.

In any case, this is the SRS update for March 2022. If you are new to SRS, I would encourage you to start from my most read SRS article, 5 Things You Need To Know About SRS to begin.

Disclaimer: This is not and should not be taken as a buy/sell recommendation.

My Thoughts And Consideration

My SRS Portfolio and Thoughts [March 2022]
My SRS Portfolio and Thoughts [March 2022]
The most glaring underperformance continues to be my exposure into Chinese Technology Stocks (SGX:HST). The price is already 41% down since the last time I entered. The question I get asked frequently is how will China do moving ahead.

According to Political Bureau of the Communist Party of China (CPC) Central Committee meeting on Dec 2021, the focus on 2022 will be prioritize stability while pursuing progress. This is a great difference from their focus of strengthening antimonopoly rules in 2021. I believe this might be a turning point and am considering a Dollar Cost Averaging into SGX:HST. This is after a capital injection into the SRS for tax purpose.

Final Thoughts

I reemphasize again that this is not and should not be taken as a buy/sell recommendation. Wishing you all the best!

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

There were only two things certain in life Death and Taxes

Individual Income Tax Season 2022

It is the time of the year again. Last year, I wrote about whether an individual is required to pay taxes and my opinion of effective income tax in Singapore. This year, I will simply comment on the latest happenings and what you should take note of.

Disclaimer: Please refer to IRAS Website whenever in doubt.

There were only two things certain in life Death and Taxes
There were only two things certain in life Death and Taxes

Year Of Assessment 2022

The filing for YOA2022 have started on 1st March 2022. We will have until 18 April 2022 (*very important date*) to e-File our income taxes.

How To Reduce My Income Taxes Effective Income Tax Rates
How To Reduce My Income Taxes Effective Income Tax Rates (From YA 2017 to YA 2023)

Income tax rates will remain the same until YA2023. Thereafter, there will be changes for people earning > $320,000 as highlighted in the Budget 2022.

This year, it is stated that 7 out of 10 taxpayers in Singapore will not be required to file a tax return as there have been initiatives to simplify tax filings. This includes No-Filing Services (NFS) and Auto-inclusion Schemes. Partnerships whose revenue of up to $200K will only need a 2 line statement as compared to 4 line previously.

It is worth noting that you can make changes to your income or reliefs by making an amendment on the IRAS portal 30 days from date of tax bill. Any excess taxes can be refunded by PayNow.

Final Thoughts

Think about your Netflix subscription and you are buying their library of movies. I consider individual income tax as a subscription that I pay to stay in my country. I’m paying for my safety, the public goods and mainly the comfort to live in Singapore even if the perfect storm is coming.

I like the progressive income taxes system in Singapore but I’m like most of you, it is not fun paying taxes.

I wish you the best in your financial journey. Hope to hear from some of you. I will be arranging for a CPF webinar in the weeks ahead. Please leave a comment below if you wish to be updated on the details of the webinar.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Is it worth it to travel to Germany during COVID season

Is it worth it to travel to Germany during COVID season?

Travelling is not the same after COVID19. There are new terms such as VTL, PCR and 2G ruling. However, that’s not the most frustrating and most worrying thing.

It is that these rules can change overnight.

For those of you who are concerned about the cost of travelling and if it will be worth it, I will be writing on a sole account on my trip to Germany and the cost of it. I will also share my frustrations and what you should take note for your trip if you wish to do so.

Disclaimer: COVID19 rules change often. Please get the most updated information from official sources and let this blog be a guide for your safe travels to Germany.

Is it worth it to travel to Germany during COVID season
Is it worth it to travel to Germany during COVID season

Booking of Flights

The booking of flight was the easiest part. When we were booking our flights, we were quite worried when we couldn’t find a VTL (Vaccinated Travel Lane) from Singapore to Germany. Fear not, this is because VTL is only applicable from Germany to Singapore. The flight from Singapore to Germany will not have a VTL status as shown below.

SIA Tickets Singapore to Germany Cost COVID
SIA Tickets Singapore to Germany Cost COVID
SIA Tickets Germany to Singapore Cost VTL
SIA Tickets Germany to Singapore Cost VTL

Noticed that there is a box in blue (from Frankfurt to Singapore) that shows Vaccinated Travel Lane (VTL). If you do not wish to be quarantined when you are back, pick the VTL (Vaccinated Travel Lanes). There will be VTL and non-VTL flights so choose properly. Hope this put to rest some of the doubts that some of you might have.

There are only two airlines namely Lufthansa and Singapore Airlines are serving this route for now.

In our case, We flew by SIA to Frankfurt during December 2021 and it costs $1007 both ways.

Travel Insurance

Travel insurance isn’t compulsory during the period of time when we were travelling to Germany but we purchased it anyway. There were 3 decent insurance companies that covers for COVID-19 situations that you can consider. These companies are namely AIG, AXA and NTUC. I won’t go into the details. Please note that some countries require proof of insurance before entering.

AIG COVID19 Coverage Travel Guard
AIG COVID19 Coverage Travel Guard

Personally, I selected AIG Travel Guard for my trip there. It cost $137 for a ten days trip to Germany.

Vaccination Proof

This is probably the most important item you will need for a trip. Go to Notarise to download and print a copy of your vaccination proof. (I have also save a copy of the vaccination proof in my phone just in case).

Notarise Vaccination Certification
Notarise Vaccination Certification

Germany treats COVID19 very serious. Every single retailer and restaurant will definitely check your vaccination status. You have to be fully vaccinated (with Germany approved vaccines) with 6 months of validity. You can consider this like a “passport / Trace Together” to be checked before entering any facilities.

FFP2 Mask

FFP masks are “filtering face piece”. It is a European standard for mask efficiency, ranging from one, the lowest grade, to three, the highest. Some hotels or tourist attractions will need you to wear a FFP2 graded mask before you can be allowed in.

It is very similar to America’s N95 or China KN95.

Is it worth it to travel to Germany FFP2 mask
Is it worth it to travel to Germany FFP2 mask

I wasn’t sure how strict Germany will be so I bought the FFP2 mask from Shoppe that bore the wording FFP2 on the mask. I bought 10 FF2 masks for 10 days. However, 2 of them was faulty. Luckily, it is generally quite easy to buy a mask in Germany. The box I bought cost $16 for 20 pieces.

German Rail Pass

This is the least complicated of them all. You just have to check if buying single train tickets are worth it or buying a rail pass.

Is it worth it to travel to Germany Rail Pass
Is it worth it to travel to Germany Rail Pass

If you are travelling inter cities, you might be thinking if it is worth it to get a German Rail Pass. A German Rail Pass is like an “unlimited” travel pass that you can use to get yourself around. The German Rail Pass allows you to travel on Deutsche Bahn trains (U Bahns are not part of the DB series). It will get you to most places. It is generally worth it if you plan to travel to more than 3 cities (with a combination of Frankfurt, Cologne, Munich, Heidelberg, Stuttgart, Hamburg, Berlin). It is quite flexible and you can choose if you want it for 3,4,5,7,10,15 days consecutive or selected travel dates version.

I paid $325 (for myself) for a 10 days consecutive German Rail Pass Twin Pass. Simply print a copy of Rail Pass before going to Germany.

Travelling In Germany

That’s all the heavy lifting you need to do before going to Germany.

At the time of travel (Dec2021), we did not need to do any COVID-19 test to go to Germany (Check the latest here). It would be good to familarise yourself with the 3G, 2G and 2G plus rules in Germany. In most cases, you will see 2G more often, this means that you have to be fully vaccinated or recovered from COVID-19. In most cases of Singaporeans, you will be fully vaccinated already. Simply show your vaccination proof and your passport to be allowed in.

You will also need to wear a mask when you are indoors (trains, shopping center).

The restaurants do not practice safe distancing (which was strange to us). It tends to be a squeezy at times. On the bright side, the food portion is huge and affordable. Order as you deem fit.

Is it worth it to travel to Germany Food Cost
Is it worth it to travel to Germany Food Cost

VTL Preparation into Singapore

This worried us the most as we needed to do a Pre-Departure test before coming back to Singapore. When we first booked the air ticket, the requirement was to do a PCR test which cost around 70Euros.

Germany To Singapore Pre Departure COVID Test VTL
Germany To Singapore Pre Departure COVID Test VTL

However, when we re-checked the website, we realised that PCR OR ART was allowed for Germany (Category II). Although apprehensive, we decide to wing it and take the ART which cost 8.5Euros instead. Talk above massive savings!

We did our test at Zentrum. You should be able to find a COVID test center quite easily in Germany. Please remember to go to a center which will be able to provide you a test certificate showing negative results. In our case, the results came after 1 hour (phew).

You will then need to do a E-Health Declaration and book a PCR test upon arrival in Singapore (SGD$125).

Back To Singapore

We were very fortunate to be the batch that require us to go for 7 days of ART test. On the on the third and seventh days, the tests will have to be done under supervision at a combined test centre. After being tested negative, we can proceed out to do our daily activities.

Fortunately, it wasn’t very expensive. 5 days of test kits cost around $25 in total and the 2 days of ART supervision cost $30. In total, this is an extra $55 that we didn’t see coming.

Conclusion

The whole trip costed around $3000 per person. Transport costed the most as airticket and the rail pass was the most hefty item. Accommodation was the second on the list. I found the hotel rates pretty similar as compared to before COVID so book according to your requirement.

I find that budgeting around SGD$100 for daily meals (with beer) is quite reasonable. You probably will have some extra to get some presents.

If you are planning to do skiing, it is not the cheapest activity but it will definitely be worth it.

There is a “new norm” COVID related expense at 6.3%. These includes my FFP2 mask, the PCR test and various ART test.

Is it worth it to travel to Germany Total Cost

Is it worth it to travel to Germany Total CostSomebody asked me if given the choice again, will I travel to Germany?

The answer is a resounding yes. Germany is a country that treat COVID seriously. The streets are generally safe and people are friendlier than Singaporeans (I will use myself as a basis point). It is nice to try different food and walk in a different street once in a while. Overall, I enjoyed myself very much and look forward to your experience overseas.

Lastly, take note that COVID rules have changed before and are very likely to change again in future. Please check the latest requirements and let this article serves as a general guide.

Safe travels.

Is it worth it to travel to Germany 2021
Is it worth it to travel to Germany 2021

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Chinese New Year Hong Bao Rates 2022

Chinese New Year Hong Bao Rates 2022

6 more days and Chinese New Year will begin. Chinese New Year has been muted for 2 years now ever since COVID-19 took us by storm. I believe many lives have been changed especially when it comes to wealth management.

What about Hong Bao rates? Has it really change as compared to pre-COVID-19 season?

Chinese New Year Hong Bao Rates 2022
Chinese New Year Hong Bao Rates 2022

Bearing in the mind the usual rules of not giving in odd numbers or any number ending with $4 (means death in Chinese), I asked my entire Wealthdojo community on how much they will think would be an average hongbao rate to give or receive.

The Most Acceptable HongBao Range for Non-Family Members

I did not poll for family member rates as it depends on your relationship with your family. I expect many factors (both emotional and logical) for you to set the rate.

Getting a hongbao rate for non-family member is simpler and that’s what we aim to find out.

Chinese New Year Hong Bao Rates 2022 Poll
Chinese New Year Hong Bao Rates 2022 Poll

As you can see, the majority of the community felt that $8 to $18 is a fair range of hongbao rate to give or receive. Personally, I believe most people would be giving the $8 for auspicious reasons.

For the 4% who don’t mind giving $38, let’s be friends =)

Jokes aside, there is a new trend for giving hongbao that might be a conversation starter this Chinese New Year.

Chinese New Year E-Hongbao

China is the one that first started the E-Hongbao tradition (I’m not sure if we can call it tradition anymore). The Hongbao that you will be giving or receiving will be in the form of QR code for you to scan. You can even give or receive a personalised Chinese New Year message.

Several banks have started to offer this service. DBS is one bank of the many that is providing this service. It is just a click of the button to create a “virtual hongbao”.

Chinese New Year Hong Bao Rates 2022 DBS eGift
Chinese New Year Hong Bao Rates 2022 DBS eGift

If you still prefer the physical hongbao, you can collect the QR gift card from any DBS/POSB branches.

Chinese New Year Hong Bao Rates 2022 DBS QR Gift Card
Chinese New Year Hong Bao Rates 2022 DBS QR Gift Card

Hopefully, this creates some fun and novelty this Chinese New Year.

Final Thoughts

This is not a sponsored post by DBS. I simply used DBS as an example because it came up top in my Google search. Feel free to use your preferred bank for this service (if they have).

Wishing everyone a Happy Chinese New Year. Look forward to more sharing on personal finance such as CPF in this blog.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.