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Recessions: Cycles & How to Invest?

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  1. #11
    Quote Originally Posted by pin:
    But bonds generate cash flow.
    Not this one - you pay to hold it.

    https://www.wsj.com/articles/germany...ds-11566385847

  2. #12

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    For equities I would skew towards U.S. equities. Even though the market is still at a high, the U.S. market has less risk factors compared to other major economies, more room to maneuver, and being the reserve currency doesn't hurt. Just don't rebalance your portfolio in one go.


  3. #13

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    This is not necessarily true. Especially to those that invested post 2012 where stock prices took off to their now unprecedented levels - I don't think value nor income have grown in line with the market.

    I would recommend holding cash if you are aggressive and can afford to get out of your current positions. Timing the market is key though this is much harder to do when you are an insignificant fraction of a fraction in the markets. It's all about luck really.


  4. #14

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    So far we have timing, time in, bonds, utilities and luck.

    No classic dollar cost averaging or buying while on discount?


  5. #15

    Speaking of buying on discount - there is no discount on MTR corp - up 10% over the past year.
    Tear gas, riot police, triad attacks - and still customers come back for more.

    https://www.bloomberg.com/quote/66:HK?in_source=blens

    shri likes this.

  6. #16

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    When I used to trade, I had the motto and trades under US $10k were a waste with the fees. And then it's difficult to trade and diversify equities when your trade amounts need to be high, unless you are bankrolling a lot of cash.

    The stocks left over from the 2008 crisis are doing well mostly, although many have been converted to penny stocks or delisted, then your broker charges you a fee for handling worthless stocks.

    Is it a good thing to tie up your cash in equities? If the market has a correction you need to take a loss before you can move that money into something else, such as real estate, business investment, etc.

    Yes there are bonds, mutual funds, ETFs and REITs, but I never got into those.


  7. #17

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    Cash it all in, travel the world and have fun.

    (And be careful who you take financial advice from)

    shri, bak875, huja and 3 others like this.

  8. #18

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    Quote Originally Posted by shri:
    No classic dollar cost averaging or buying while on discount?
    Wouldn't HK REITs be "buying while on discount" right now? They dropped by over 20% over the last 2 months, and now offer on average a yield of 6%.
    stanleystanley likes this.

  9. #19
    Quote Originally Posted by john_1122:
    Wouldn't HK REITs be "buying while on discount" right now? They dropped by over 20% over the last 2 months, and now offer on average a yield of 6%.
    Those yields are trailing yields (i.e. what they paid out over the last 12 months). Due to the current turmoil and resulting loss of business (especially for hotels and high end retail), rents are falling/likely to fall. Since REITs pay out most of their (adjusted) net profits, it wouldn't be unreasonable to expect that, as a group, HK REITs will lower their dividends in the near term.

    You could make a similar case about the large property developers and landlords - selling on very high discounts to NAV and attractive trailing yields, but with the expectation that the value of their assets has likely fallen in recent months. One difference between the property companies and the REITs is the the property companies have traditionally distributed a smaller percentage of their earnings as dividends to their investors – meaning it is less likely that they will need to cut dividends if rental yields and development margins fall. Of course, "less likely" doesn't mean "won't."

    Obvious disclaimer: I have no idea what's going to happen in the future.
    Viktri, shri and stanleystanley like this.

  10. #20

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    Worth a read before you attempt to catch falling knives. ( Defined here: https://www.investopedia.com/terms/f...fe.asp?noembed )

    The seasonally adjusted headline IHS Markit Hong Kong
    Purchasing Manager’s Index™ (PMI™) sank to 40.8 in August,
    down from 43.8 in July, signalling the steepest deterioration in
    the health of the private sector since February 2009. The PMI has
    now posted below the 50.0 no-change mark for 17 months in
    succession.

    The headline PMI is a composite single-figure indicator of
    economic performance derived from indicators for new orders,
    output, employment, suppliers’ delivery times and stocks
    of purchases. Any figure greater than 50.0 indicates overall
    improvement of the economy.
    https://www.markiteconomics.com/Publ...b7b72664ba8672
    traineeinvestor likes this.