2 Investment Actions for Volatile Markets

To say that the Singapore stock market has been volatile lately might be an understatement.

In August alone, the market barometer, the Straits Times Index (SGX: ^STI), has fluctuated from an intraday high of 3214 points to an intraday low of 2808 – that’s a gap of more than 10% within a month.

In volatile climates like these, how we react to stock price movements may make a difference in how our investment results pan out over time. Here are two things you can do to help you stay ahead.

Action No. 1: Keeping a journal

I have previously talked about keeping an investing journal in a previous article here and how it can help you diagnose your own discomforts in acting against the crowd.

If you’ve gotten the hang of that, let’s move to the next action.

Action No. 2: Be selectively greedy

Having the stomach to buy during downturns can be a great step forward for you as an investor. But, we shouldn’t take this an invitation to pile into every company in sight. We should be selective about our choice of companies.

Imagine a scenario where a person enters a supermarket without a shopping list but with a lot of cash on hand. He or she may be tempted into buying bargain-bin items which they don’t actually need.

The same could apply for buying stocks during a downturn. If we enter into the stock market without our shopping list, we may be susceptible to picking up stocks which we might not need for our portfolio.

As such, it might be important for us to prepare a watch-list before we decide to wade into the stock market.

A Fool’s take

Awareness of your own behaviour and tendencies is the first step to understanding how to get better at investing. If you can achieve that, then moderating your own greed during downturns would be the next step.

In doing both, we can then move one step closer to our quest in becoming a better investor.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.