how to invest when recession comes and
market crashes hi CFLieu from CFLieu
channel now it's really horrifying when
you just start to learn about investing
and shortly after that there's this talk
of recession coming everything starts to
fall in value nammed market seems like
crumbling down you see when you learn
when you first start about learning how
to invest or what you learn about what
to invest or how to invest is of very
little importance because you see until
when you really start to put down your
own money in the market in the stock
market or in the property market that is
where really the rubber meets the road
now you can be an professor in
investment in theory but being invested
during the recession time is the main
reason causing you to doubt your own
investing decision plus you start
second-guessing yourself and basically
whatever value investing knowledge that
you have you have learned from all the
concerts or from all the seminars you
can basically just throw them out do we
know don't be the guy that beats
everything about mountain biking but
never actually ride a bike after all
when everything is easy everyone can be
a genius anyone can be an expert
everyone can say how they can invest or
how to invest to make a quick profit hey
I would bet that even if you put a
monkey in charge of any unit trust fund
that monkey can make easy profit when
the market is bullish the oil prices is
all-time high there's this high GDP
growth and as these good jobs prospects
take it from someone who started
investing in 2008-2009 when the US
subprime mortgage crisis actually hits
it cost everything to go down and it has
this reverberating impact across the
stock market across the property market
around the world and suffering 50%
losses like I've shown you over here in
one of mine spots holdings back then it
really gives me a unique perspective of
how to really invest in the market and
stay invested even though everything
that you know of is down in value and
unique insights how they behave not only
in the down cycle but also in the up
cycle now many stock market guru or
property market guru tell you story if
there's no such thing as market downturn
or recession as if they have the power
to defy the forces of the market such as
this everything comes because I
when it comes to investment and there's
a lot of human emotion involved in this
up-and-down cycle see today I'll be very
afraid
if something something that investor
does not come before up and down cycle
does not have its inherent downside risk
and it claims only have upside is not
any downside because that means it could
be a Ponzi scam
now this only so many things that they
can really sparked a massive and prolong
panic sell-off in the market in the year
2020 context this an alarming spread of
this illness which causes death as soon
as a month time and it originated from
one of the second biggest economy in the
world at this point of time but let me
explain in compact and layman from how
this market panic on sound down causes a
domino effect across businesses economy
and also consumer spending China has
become indispensable an important role
player in the supply chain across the
globe whatever you and I are using right
now the whole thing could be an American
brand on your European brand or Japanese
brand but those brands had these
products made in China or the components
or the raw material that comes into this
product you and I are using actually
oedema in China and this is the problem
over here when this pandemic really
drives the halt in production across
factories in China since January
February 2020 period just this very
serious of shortage of parts that goes
into a lot of this more than the product
that we are using and in the case that
you think well a lot of these non China
companies an American company go to
China just because of the cheap labor
benefit now you couldn't be more wrong
take this from Apple CEO at this time
Tim Cook and he famously said in an
interview you say that Apple had the
iPhone made in China not because the
labor day is cheap Tim Cook say China
stopped being the low labor cost country
many years ago now the reason is because
they come to China from a supply point
of view the amount of skill and the
amount of the skill that they require in
one location is available in China but
not available in the US so in case you
still think China is a low labor cost
country you are outdated now this
explains why China has become an
integral part in global supply chain
their supply and this a chain so as you
know once the chain is broken the supply
doesn't move there's a lot more
complexity in this for example you may
be
skiing we all can if some of these parts
are available can they just like seek
for replacement crap from other
suppliers in from another country now
sure right when you go to supermarket
and you want you're used to using
compact toilet paper
can you buy scotch toilet paper you
can't after all you just need to get
your butt wipe right as the saying goes
that's not metal is the white cap or a
black cap as long as the cat catches the
mice it's a good cap so when the
manufacturing of these products on raw
materials shuts down businesses which
depend on this pattern or raw material
have to stop production imagine you
can't really buy an iPhone if the iPhone
does not have a screen now because
businesses have no complete product to
sell
which means consumer has nothing to buy
and then dispute over to these
businesses not meeting the expected
revenue numbers investor become very
pessimistic and they dump the shares in
these companies which causes the stock
price to dip and as this happens more
and more people notice this there is no
spoor becomes like a plunge it's a
matter of meeting or missing the revenue
expectation is the expectation are
always already priced into the market
according to efficient market hypothesis
massive bull or bear market is caused by
something that happened out of what is
planned or expected no matter the size
you know what I noticed nobody panics
when things come according to plan
even if the plan is horrifying or a
truckload of soldiers will be blowing up
nobody panics because it's all part of
the plan but when I say that one party's
not in case you are not financially in
kind this is what I mean by efficient
market hypothesis now business become
less less profitable this uncertain
outlook and prospect and end of the day
they might have to cut salary or even
with retrenches people and then
people have less money to spend to buy
products and services services just like
aspirational purchase like your leg like
LV bags you know branded cars and all
that because they are in a tight
financial situation for simply because
they cannot leave their house due to
quarantine they avoid from traveling for
business or vacations and then you see a
company or like Asia or even sectors
like aviation
really impacted now to make things worse
people with good or bad debt are late on
your loan repayment they could even go
into a default let's say if you miss
your loan repayment for three months
straight now property investor who are
highly leveraged finance are stuck in
the time of recession so much for
investing in property is always a good
deal they made the situation get worse
during recession you see things like
bankruptcy and also foreclosures even
the banking sector when it comes to
economic recession the sector with the
most money in the system are actually
not spared because their profits are
impacted by increasing non-performance
loads then this becomes like a full
cycle a perfect storm if you may now
there's so many uncertainty when
recession hits but this one thing is
certain
nobody can be certain how long is going
to last or how severe it could become
not a single human know in advance how
quickly this can blow over and how much
can it gets before it recovers and then
you see government's try to intervened
by boosting up the economy from to
prevent economy from falling into a
recession via all these stimulus
packages creating money out of the tin
air to throw into the economy or they
could do text right temporarily reduce
taxes or waive it for a certain period
of time these are all artificial
measures not to say this shouldn't be
done but I think the law of nature and
the law of supply and demand actually
holds more power over how the market
reacts in recession
now here's oh I've told you this now are
basically economics 101 without having
to study economics these are the
information you need to succeed in a
practical world no need to actually take
any subjects or degree in economics or
learn from any economics professor now
when we are discussing this we really
cannot run away from discussion from the
law of supply and demand which is simply
considering the investment assets like
stocks or you as a property and no
different than your grocery items just
like a toilet paper surgical mass the
law of supply and demand states when
there's a lack of demand this is people
do not want that thing or fear of that
jeopardizing their livelihood or
finances prices fall to our level where
it's too cheap to ignore and then people
start we banging that again therefore we
can say the demand is that in the prices
rises again to a reasonable level so in
other words it is it is a constant of
war and Internet interacting factors of
M of the ever-changing human
expectations emotions self-interest and
sentiments
the exciting or scary part is all these
elements do not work in isolation at one
end of the spectrum you have excitement
or euphoria which drives the prices of
an asset up to an insanely high levels
overriding any fundamentals we have seen
that in real estate property market in
Malaysia in 2010 to 2013 and then this
the other end of the spectrum you have
fear and horror with depress the price
so fast that you don't even have time to
blink ignoring any common or logical
sense
but unlike grocery items where we know
what it is we can see grocery item which
we can see few and understand how to use
it in investment is one big area in our
life where there are so many unknowns
naturally we are afraid of the unknowns
so in this video and in this entire CFD
channel is actually dedicated to helping
you understand how the entire system
works which is why you should smash on
the like button now and hit on subscribe
because there are more because this is
what other people are saying about CFU
Channel anyway as I was saying I reckon
the more you understand about what
happened in the past in the present is
your ticket to feel more in control of
what to do and what not to do especially
in the times of uncertainty volatility
and complexity which in the context of
investment this mantra holds very true
because there are more things we cannot
control than the things that we can I've
shared with you this you want to have
the serenity to accept the things that
you cannot change the courage to change
the things that you can and the wisdom
to know the difference
realizing that any investment in stocks
or property market is no different than
life if your life is never a straight
line why would you expect the stock
market to go up in a straight line
however in defining moments like this
these are the actionable steps you can
take to weather through any crisis only
invest the sum of money that you don't
need to use for the next five years at
least now it's very easy to say be
greedy when others are fearful but
practically if you lose your job and
your business is losing money buying
more investment SS and that's when the
prices are going down will be the last
thing on your mind so you have to
understand this saying in your context
not to just take this as it is it's very
hard to be actively still investing even
when prices are going down and
everything in the market is a bargain if
you do not have an emergency fund to
cover your living expenses including
your monthly financial commitment or
obligation for the next six or 12 months
it's easy for anyone or any guru to tell
you to buy and hold - don't sell which
is what you in tell the - but you just
have to sell even with
a major loss when you lose your job you
are three months behind your house or
car payment the banks are calling you
non-stop you can't find another job and
you have empty outlook emergency funds
just to make ends meet the second thing
is if you are retiring or going to stop
generating active income soon in less
than five years when recession hits this
is the time where your investment and
set value is going to drop and this you
absolutely queue your retirement nest
egg because you lack of time to recover
from the losses now so what you need to
do is to rebalance and reallocate your
asset or portfolio I have a weekly
online web class which focuses on some
of the best asset class to make your
retirement portfolio to sustain as long
as possible throughout the entire
up-and-down cycle where you will be
least impacted by market downturn or
recession details in the in the
distribution below check it out and
register for the upcoming online class
number three is you need to deal average
and sell underperforming assets
especially if your investment and set a
highly leveraged like property is it
keeping an investment and said with
little chances of turning around in the
next three - fires is doing more harm
than good because you are missing out on
the many opportunity costs out there you
are leaving money on the table for your
money to work harder for you if you have
high financial commitment and if your
company going so calm gory news upon
that is when you really start to panic
so be proactive to reduce both the
financial commitment of your
underperforming and set such as real
estate property investment and also your
lifestyle expenses it's a misconception
when you read then you beat Robert
Kiyosaki Rich Dad Poor Dad
and they say mortgage is always a good
that it's not when your rental income
cannot cover your bank mortgage
repayment month after month year after
year which is what you see nowadays
there's a lot of Islay long units this
let alone units and not really rundown
or damaged units there are new VP units
units just has just gone through vehicle
possession shiny brand new brand new
unit that is going for auction on Ella
don't take it from me take it from
someone the group of people who actually
left comments on my Facebook page don't
let that happen to you if you want
definite answers whether to sell or
still hope your underperforming property
or assets you want second opinion on how
to proactively decide whether to sell
underperforming sa now or is still to
actually keep on holding for the next
few years I want you to check out
description below if you bring it to
another
webcast that I'm conducting which will
cover this topic with that sake guys
thank you for watching and don't forget
to also like and subscribe to see fu
channel until next time I hope you have
benefited a lot from what I've said
you
