What can you do in the Financial Crisis?

People in doubt during the financial crisis. What we can do? If I am a holder/invest the: -

a) Shares

I will identify the cut loss lever but buy back at low level. How to identify it? Example, if A share drop 15% or 20 % from my purchase price. I will sell.

After sell I will wait the price drop until below 6 times PE ratio only buy back. My formula is A-20% (sell). But timing must control. If the share in one day or 3 day drop more than 20% must immediately sell and never buy back. If want to buy back must wait after a month or after study the fundamental value. If there is no changes, it can be consider buy back but usually this share has the financial or cash flow problem. So, be careful is primary factor.

If government announced rescue the market. I only wait after 6 months or one year only buy back. If government announced enforce the new rule or enforce every financial company given the latest financial data. Immediate after 3 months I will buy back.

b) Various Currency/Note

I will convert all foreign currency into local note. Because I need to survive in the country instead of plan any investment.

c) Unit Trust

I will convert the pure shares unit trust to 50% saving and 50% shares investment unit trust.

d) Fixed Deposit

I will take FD to settle the loan outstanding or turn into saving account because planning to buy more unit trust as above c).

e) Loan

No new loan application due to higher interest.


The above as reference to middle range rich people because rich people life style is totally difference.

Write by Kacaubusy on 13/8/2007.