Stay on your investment objective

For long term investor, they should focus on what are going to happen in next three or five years, rather than next few days. Investor may try to buy low and sell high during volatile market, but this is not an easy way . Long term investor should stay on their investment objective to buy and hold.

Review your portfolio

During financial crisis, cash is king. Liquidity risk will spread over the world. So it is important to screen your portfolio for liquidity risk and switch the holding to a cash cow. For example, during the oil price war, a small US shale oil producer may run out of cash and bankrupt. The best way it to switch it to an oil giant (like Exxon, Chevron) or cash cow (like Apple). If the company go bankrupt, there will be an endgame.

Search for “too big to fail”

During financial crisis, some giant company suffer most but they are too big to fail . In 2008, US government rescued the banking industry. After several years, most bank have recovered and provide great return for investor. Giant player in oil and aviation industry may be the best candidate for this financial crisis. Switching part of portfolio into those giant company may provide great return in long term.

Diversification

Just don’t put all eggs in one basket. Diversification can help to reduce the risk of portfolio.

Keep healthy both physical and mental

A healthy body and mind are essential for making right investment decision. Yes, it is painful as the portfolio tumble everyday. If long term investor feel frustrated, just leave the market for a while to calm down and relax. Someday greed will be back and market will reach a new high.

Investment Disclaimers