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Wuhan Virus Widespread: Should I Sell My Investment Now?

A couple of friends had been asking if now is a good time to sell their investments and get back in later.


Given that the Wuhan virus was a black swan event, China's economy will likely get a hit due to this saga and given that China now has a much bigger influence than it had in earlier years, the market should be heading for a downward trend.


Let's take a page from SARS history in Singapore and see what we can learn from it.


According to the Straits Times, SARS was first found in Singapore on 1 Mar 2003. The Straits Times Index (STI) on that day opened on 3 Mar 2003 at 1,278.


SARS was eradicated from Singapore on 16 July 2003. There were 33 total casualties during this episode. In between, the STI dropped to a low of 1,213 or a drop of about 5% in that year.


Let's fast forward 2 years to the end of 2005, where there were no cases of SARS been reported.



Straits Times Index From Yaoo Finance

The STI continue to grow and compound to 2,347 by the end of 2005.


That is a growth of 83% in 2 years despite the SARS saga.


Now begs the important questions...


To Sell Or Hold?

I always believe that history has a tendency to repeat itself. Will there be another 83% growth in the next 2 years if I were to hold it all the way?


Maybe. Or maybe not.


The other important question is, after selling your holdings now, do you know when to get back into the market?


Because if you had waited for the world to be eradicated of SARS, you had already missed out on one of the greatest bull runs in Singapore's history.


Does that mean I should hold my investment all the way?


Yes and no.


I guessed it's time like this that you should really sit down and re-evaluate your portfolio. For the investments that aren't helping you to grow and compound your money, I sincerely think that you should cut the losses now.


On the other hand, if you have convictions on some of the investments you currently own, it may be a good idea to ride out the volatility.


If budget permits, you may want to add to the positions that you have high convictions in.


And it's kinda funny that I had written about a similar topic on the drop a couple of weeks ago. You can read more here.


If you are uncertain if there are any investments you should continue holding or sell, you can always contact your financial advisor or broker, or you can also reach out to me.


Lastly, if you are still speculating if the market will go up or go down in the coming months, I would like to leave you with some sage advice from Mark Twain,


“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”
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