Rather
than siting on the sidelines in bear markets, investors can actually
thrive and make profits. That's because stocks fall faster than they
rise as fear is much stronger than greed.
Just
this morning, 2 out of 3 of my REITs hit their 52week high. My paper
gain for REITs on average is about 16.8% in a span of only about 8months
and less.
| Buy Price | Current Price | Paper Gain | % Paper Gain | |
| Cambridge Industrial Trust | 0.655 | 0.810 | 0.155 | 15.50% |
| Starhill Global REIT | 0.745 | 0.950 | 0.205 | 20.50% |
| Suntec REIT | 1.775 | 1.920 | 0.145 | 14.50% |
No
doubt there's some fear in me that my REITs prices will/may dip in a
bear market however, I'll still be receiving dividends so that's
comforting for me to know. Also, REITs have actual physical assets and
so any REITs that are undervalued (below NAV) are worth investing in.
It's similar to how you will buy a house in an economic recession at a
discount because you are confident its price will rise again when the
economy recovers.
Many
people shun away from the stock market when the economy is down but I
feel that if others can profit from it, then why can't I do likewise?
"Short
selling"/"Put Options" is what people do during bear markets. A general
rule is to short stocks that are already going down. Get onto a moving
train, it's a lot more profitable.
Other
than short selling, it takes courage to buy when everyone else is
panic-selling. That's when stocks become undervalued & you get a good
discount to what a stock is really worth.
I'm
excited for the next bear market as I would like to see how I
fare/respond to the market. Making mistakes are a great way to learn.
The fear of making mistakes often prevents people from learning what
could possibly be one of their best lessons in life. Embrace
mistakes. Growing up in a rigid educational system in Singapore where
mistakes are often frown upon, it's hard to break away from that mental
notion but once you break free from those "chains", you're free to
"fly".
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