By: musicwhiz The recent global stock market meltdown and the persistent and pervasive bad news in the media has made many of my peers and relatives worried and frazzled. Reading about retirees losing their life savings and people losing life fortunes to the stock market isn't exactly uplifting news - it all points to dark and dreary days coming up and probably a lot more pain and suffering for the man on the street. However, thinking about things in perspective, having such a deep recession may actually be a good thing (I will elaborate further) and that it may not affect me as much as I previously believed. These are some of my thoughts on how to stay positive and how to weather the economic storm. In terms of my portfolio, assuming a worst case scenario whereby I lose ALL my money (erm, touch wood !) in "high-risk" and new companies such as Ezra, Swiber and Pacific Andes/China Fishery (high gearing); it will be about a 60% permanent capital loss in my portfolio. In case readers want to leave stinging, sarcastic comments again, let me remind that this is the WORST case envisaged scenario as I view these companies as the highest risk of all the companies I own. FSL Trust is likely to survive (in one way or another) unless very extreme adverse events such as invoking of market disruption clause becomes common, issuance of massive amounts of additional shares due to DRIP or the bankruptcy of one of the lessees. Boustead has a huge cash hoard which should tide it through the hard times - being a 180 year-old company which has seen countless recessions and even one Great Depression also help in coping with the current crisis ! Tat Hong has similarly been through recessions and so far has emerged stronger and is a force to be reckoned with in Asia and the World; thus not too much worries about them going under. So, as mentioned, assuming the WORST, it will take me approximately 2 years to save and earn back all the capital which I had lost. I normally save 40% of my take-home salary but this recession has caused me to increase this to 50%. Assuming I still get a decent bonus this year and no bonus next year, I should be able to partially cover all debilitating losses in the event of collapse of one of my companies. Since I am still young (early-30's), I think 2 years is a short time frame to be able to earn back what I've lost. In the meantime, I will be:- Read more..