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I happened to see my buddy unicorn78's comments that he wanted to get some reits/divy counters but is not sure if now is a good time to get in. I gave that question a fair amount of thought because I've asked myself that question a few times too. So, instead of sharing with him alone, I thought it'll be good once I posted my views, the other more experienced market practitioners can share theirs in the comments.
As we learn more and read more about the market, I've no doubt that you'll definitely come across conflicting advice. One camp would say you should never average down your losses just to get out as it is more risky, the other would say you should buy more as the price gets lower to get a lower average price. Frankly, I've done both before. For longcheer, I averaged down as the price gets down until finally I can't take the losses anymore and cut off that gangrene in my portfolio at a huge loss. For HSBC, I average down and bought even more as the price falls, reducing a huge potential loss and it is now sitting around at breakeven level.
I think advice is one thing but the more important point in making the advice work for you is wisdom. You need to know when the advice is suitable. I believe all the advice works, given the correct condition. Thus, the hardest part is to know when to use which advice. So, that is my disclaimer for all my blog articles.
Here's what I will consider when answering the question of whether this is a good time to buy reits/divy counters:
1. For dividend yielding counters, I would want to look at yield of course. Once it hits a certain percentage, I would nibble a little. I never buy the exact number of shares I want in the first try, always in bullets. I've learnt enough in the market that there's no point timing the exact bottom - it's an exercise in futility. Follow snr bro's advice - buy slowly sell slowly. Depending on market condition (check TA), I'll break down the total batches in 2-3. Once I got in the first batch, I'll be a lot more stingy when entering the second batch, always preferring to look for the right TA set up before entering again, so you can say that my first batch is a test batch. Don't ever worry about transaction cost when buying in batches. I'll treat it as an insurance cost to prevent more capital loss than the minimum $25 paid for brokerage. Read more...[caption id="attachment_2473" align="alignright" width="150" caption="Photo by Ravenelle"][/caption]
I happened to see my buddy unicorn78's comments that he wanted to get some reits/divy counters but is not sure if now is a good time to get in. I gave that question a fair amount of thought because I've asked myself that question a few times too. So, instead of sharing with him alone, I thought it'll be good once I posted my views, the other more experienced market practitioners can share theirs in the comments.
As we learn more and read more about the market, I've no doubt that you'll definitely come across conflicting advice. One camp would say you should never average down your losses just to get out as it is more risky, the other would say you should buy more as the price gets lower to get a lower average price. Frankly, I've done both before. For longcheer, I averaged down as the price gets down until finally I can't take the losses anymore and cut off that gangrene in my portfolio at a huge loss. For HSBC, I average down and bought even more as the price falls, reducing a huge potential loss and it is now sitting around at breakeven level.
I think advice is one thing but the more important point in making the advice work for you is wisdom. You need to know when the advice is suitable. I believe all the advice works, given the correct condition. Thus, the hardest part is to know when to use which advice. So, that is my disclaimer for all my blog articles.
Here's what I will consider when answering the question of whether this is a good time to buy reits/divy counters:
1. For dividend yielding counters, I would want to look at yield of course. Once it hits a certain percentage, I would nibble a little. I never buy the exact number of shares I want in the first try, always in bullets. I've learnt enough in the market that there's no point timing the exact bottom - it's an exercise in futility. Follow snr bro's advice - buy slowly sell slowly. Depending on market condition (check TA), I'll break down the total batches in 2-3. Once I got in the first batch, I'll be a lot more stingy when entering the second batch, always preferring to look for the right TA set up before entering again, so you can say that my first batch is a test batch. Don't ever worry about transaction cost when buying in batches. I'll treat it as an insurance cost to prevent more capital loss than the minimum $25 paid for brokerage. Read more...
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I happened to see my buddy unicorn78's comments that he wanted to get some reits/divy counters but is not sure if now is a good time to get in. I gave that question a fair amount of thought because I've asked myself that question a few times too. So, instead of sharing with him alone, I thought it'll be good once I posted my views, the other more experienced market practitioners can share theirs in the comments.
As we learn more and read more about the market, I've no doubt that you'll definitely come across conflicting advice. One camp would say you should never average down your losses just to get out as it is more risky, the other would say you should buy more as the price gets lower to get a lower average price. Frankly, I've done both before. For longcheer, I averaged down as the price gets down until finally I can't take the losses anymore and cut off that gangrene in my portfolio at a huge loss. For HSBC, I average down and bought even more as the price falls, reducing a huge potential loss and it is now sitting around at breakeven level.
I think advice is one thing but the more important point in making the advice work for you is wisdom. You need to know when the advice is suitable. I believe all the advice works, given the correct condition. Thus, the hardest part is to know when to use which advice. So, that is my disclaimer for all my blog articles.
Here's what I will consider when answering the question of whether this is a good time to buy reits/divy counters:
1. For dividend yielding counters, I would want to look at yield of course. Once it hits a certain percentage, I would nibble a little. I never buy the exact number of shares I want in the first try, always in bullets. I've learnt enough in the market that there's no point timing the exact bottom - it's an exercise in futility. Follow snr bro's advice - buy slowly sell slowly. Depending on market condition (check TA), I'll break down the total batches in 2-3. Once I got in the first batch, I'll be a lot more stingy when entering the second batch, always preferring to look for the right TA set up before entering again, so you can say that my first batch is a test batch. Don't ever worry about transaction cost when buying in batches. I'll treat it as an insurance cost to prevent more capital loss than the minimum $25 paid for brokerage. Read more...
