Adjust the stock portfolio in crisis
In war, we often hear the words “The war is not over. Do not count the corpses of the soldiers " Which means "As long as the time has not expired, we still have hope. Even if for just one minute. In investing, too if we are still investing Do not underestimate the thought that we have successfully made a lot of money. Because of an investment portfolio with huge profits. Maybe falling so strongly that the profits have fallen or become a loss. On the other hand, if we still lose Does not mean We have suffered an investment failure. Because investment is a long-term activity That we must study and learn and develop investment strategies for life.
In being a long-term investor the return we receive from investment at some point it is good or very good. But sometimes it is bad or terrible. Such as during the economic crisis That we may lose at the level of 40-50% of the investment portfolio value. And may cause the profits that we used to make disappear Do not be discouraged. Because this is something that always happens all the time. And it has happened to "expert" or global investors as well. What we should do (Instead of sitting discouraged or discouraged from investing) is that we should review what lessons we received and how do we adjust our investment strategy?
A good long-term investment portfolio Could happen Because some stocks that are large can produce outstanding results for a long time. This will help the overall return of the portfolio grow or counter the dire situation of the market. That means we need to look at the business model of the stocks we are investing in as meeting the long-term investment theme of the world. Or of the country? For example, we are entering an aging society. We may also consider investing in healthcare-related stocks or investing in equity investments. That regardless of the economic situation We just need to eat and use.
The next lesson is that we must keep an eye on the risk of investing in our stocks, that is, there must be a risk assessment of every stock we invest in. How high is the risk? Business fundamentals and the ability to compete in the long term has changed or not? In addition to the risks of the business We may have to consider the risks of altering a company's account. Because in the long run the factor that makes the stock a winner in the market is the company's performance.
So, in a crisis Stocks to survive and ready to make a comeback are stocks that have a strong competitive advantage. A growing company and the stock price are not too expensive and will be the stocks that can break through the stock market the best in any situation
So how do we find these stocks? This article provides an alternative investment in times of crisis to be shared.
For investors investing with an emphasis on security as already mentioned in times of crisis, we must look for a secure stock or defensive stock. Which are stocks that do not fluctuate according to economic conditions, such as stocks in the food and utilities That whether the economy is good or not These are also required items. Causing the company to have a relatively continuous income with the volatility of the share price of this group This makes these stocks relatively low risk. When compared with other stocks with more noticeable. As a result, we cannot expect a very high return in the form of capital gain. Strategy for investing in this group Therefore suitable when the market tends to be a downtrend and we don't know how deep the market will go.
In addition, stocks to consider when investing in a crisis are those listed on the SET50 that offer a substantial price drop and can pay dividends. By calculated as a dividend yield or dividend yield that is higher than 5%. Considering the stocks in both SETHD (SET High Dividend) and SET50, they are the largest stocks with high dividends. We choose to invest in stocks in SET50 because they are large companies with good financial status and stability that should have a long hemp line. And able to overcome this crisis the more the price comes down Even more as an opportunity to accumulate purchases. This means that we invest in a large stock at a discount. And when we consider the return on investment as well, it is because companies that can pay continual dividends. Is a company that can generate consistent profits. We may look back at the historical history of this group of companies, how many times they have been through a crisis. And can the company come back every time? Stocks that go through heat through cold Come in every crisis Should be a shelter for us once again
You can see the list of stocks in SETHD and SET50 as follows:
The last segment I would like to introduce is Super Stocks, which will grow 10 times in the next decade. Which if investors are interested in this group of stocks Will have to do hard homework That the stock will grow 10 times over the next 10 years This means that we will get a compounded return of 25.89% per year. (Must be calculated with a financial calculator or financial calculator, put present value or PV = 1, future value or FV = 10, period is 10 years, the compounded rate of return will be calculated at 25.89%) Stocks that can grow Comes from the growing performance It is often a small company that is growing. Has a high profitability. It has a remarkable growth in sales and profits. And is expected to continue to maintain high profitability in the future. And is expected to continue to maintain high profitability in the future. When we want to find stocks that yield at least 25.89% per year, we need to look for stocks with at least 25.89% annualized earnings.
Therefore, investors who are interested in investing in Super Stock must have the ability to analyze business fundamentals. The business model of the enterprise, whether it will create continuous growth or not. It also must have the ability to analyze the financial statements of the entity as well. Especially in this crisis Let investors look for stocks that are in big investment trends or Mega-Trend (such as e-commerce technology or health care) and their published earnings compared to before the crisis were not significantly reduced, stable or even increased. Which shows the strength of the business.
One caution when investing in these stocks is price chasing because when there is great demand. The price will be higher by default. As a result, investors may buy stocks at prices higher than fundamentals. In addition, investors who prefer to invest in stocks grow. It is expected that future earnings will grow at a very high rate. However, if the company is not able to profit at the high rate expected by the market. The price of these stocks may have a more severe drop than other stocks.
In conclusion, in every crisis, there is always an opportunity. People who are successful in long-term investments are those who learn from their mistakes. Having an education and always prepare Will be able to seize the opportunity in times of crisis Let's just not give up on the investment.
By Nipapun Poonsateansup CFP®, ACC and Independent Financial Planner Writer and speaker