Seriously, i am quite worried about the financial markets. With FOMC meeting just around the corner, the stress levels is extremely high. Although market sentiments have forecast a possible rate cut of 0.25% or more, one can never be sure how the investors would react to this news.
Again, i find myself in a situation not knowing what i should be doing with the current portfolio. It is therefore extremely important to have a investment strategy in place; a strategy which will have to take place no matter what happens during distress situations.
My strategy is to hold and do nothing, i.e. bite the bullet and ride through the unknown. Should anything goes wrong to the portfolio, a cut-loss measure (when there is a 20% drop in unrealised profit) will be activated. After factoring the time delay, i would at least have locked-in 75% of my profit (less painful).
By the way, cutting loss does not mean to get out totally, but to re-invest in other funds. The important thing here is to stay invested so as not to lose out in opportunity costs. If the market goes my way, i will re-strategise to shift more funds into china to ride the uptrend.
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