Everyone loves a sale. It is during a sale period that you can shop for things at a bargain. There are sale periods in the financial markets as well, but there is a huge difference; Department stores will tell you when the sale starts and how long it will last, but financial markets will never tell you such things.
The most recent sale period was during the market downturn in early February. As above, there was no announcement that share prices were going to take a dip, and also in my post here I had stated that we do not know how long this was going to last.
Looking back, the question asked was did we miss the sale during those few days? For me, it would be yes, for I had only bought into one REIT during that period, and before I could deploy my resources, things were going back to normal.
However, we could learn something from this episode and better prepare ourselves for the next sale. Like an avid shopper, we could draw up a wishlist or shortlist of sorts.
Prepare a Shortlist
In my ebook, I had mentioned about preparing a shortlist of the financial instruments available for your Bedokian Portfolio1. The shortlist contains counters that you are interested in, but it is not at the right time to enter. Also, it could be a list of your existing counters in your portfolio with a new target price of entry.
It is entirely up to you on how much information and parameters to put in the shortlist, but it is important to keep it updated. You could pluck off the figures from Google or Yahoo finance for a first glance, and if you want to go deeper, read them off the last quarterly or annual report available from the companies’ websites.
Such a shortlist serves as a useful quick reference in a sale period, so that you could make a fast decision of whether to buy in or not.
1 – The Bedokian Portfolio, p94-95