Stock Market – Is it a V-shape Recovery?

It has been an eventful March and April, we are undergoing an unprecedented pandemic which affects greatly the norms of social interaction for human beings. A “new normality” is to continue for the foreseeable future, with huge focus in digitization and online collaboration to minimize the spread of virus.

As you can see from my previous post in March, the global active cases increase from 100k to 4 million in less than 60 days! Deaths also grow from 3.5k to 285k, that’s a very saddening and dire situation we are in. With US start its reopening last week without seeing decline of active cases, the worse is yet to come in my humble opinion.

Singapore is now entering 2nd month of its circuit breaker started in April 3, having most Singapore residents to stay/work at home in order to break the chain of transmissions of Covid-19 in the community. We have achieved much successes with reduced community cases to single digit in the recent few days, however, the dormitory infected cases is still hovering at mid hundreds with no sign of improvement.

A lot of SMEs are suffering with worsening business outlook since March. It is not uncommon to see people getting pay cut or retrenchment in social media nowadays, in which I am very grateful to still stay employed.

We are in a strange state – economy is worsening/plunging, while stock is soaring to its previous high. There are various “guru” throwing different market sentiments, retail investors are mostly confused and stay sideline.

What did I do? Though equally puzzled, I continue nibbling IWDA, adding tech stocks which are generally not affected by such pandemic, as well as buying few calls with expiry date in 2021, anticipating the stock market will resume its glory by end of the year.

What if I am wrong? Short term performance in stock market doesn’t matter to me, I will keep DCA on IWDA, ensuring my cash is working hard for me even in current horrified economy downturn. It has been proven without fail that the stock market rises in long term.

And I am convinced staying somewhat invested is the correct long term investing strategy.