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Just prior to the market crash at the end of July 2011, my client asked me whether should he start buying into branded and big name companies once the market crashes. I told him be careful of that as one wouldn’t want to catch a falling knife. Indeed, during the financial crisis many people who invested right at the bottom of the crisis found to their horror that they not only they did not make money but lost significant amount of money.

Just for curiosity, I created a paper portfolio of US$100,000 to invest equally in 5 big branded companies namely Goldman Sachs, AIG, Citigroup, JP Morgan and Bank of America. The inception of the portfolio was on 30 Dec 2008. As at 12 August 2011 closing prices, the portfolio is worth only US$88,140.16 after taking into account of dividends. Dividends are however not reinvested as this is the …