💰Investment Review 2️⃣0️⃣2️⃣2️⃣🍀What have I learnt?

No matter how stormy the 🇺🇸 market get, never let it bring you down.

Persistent inflation, Ukraine war and the Fed's rising interest rates are the primary causes of extreme volatility in global stock markets. As the dust settles on 2022, it has been an all-around brutal year for investors. The stock market finished the year down roughly 20% on average. The $DJIA(.DJI)$ fell 9%. The $S&P 500(.SPX)$ isdown about 20%.

I have got my fair share of hits and misses in my stocks investment portfolio. I have learnt the following:

1. Diversify my investments portfolio:

Any company can hide serious problems from its investors. Even the most financially sound company with the best management can be struck by an uncontrollable disaster or a major change in the marketplace, such as a new competitor or a change in technology. 

One strategy to protect myself from company dowmfalls is to diversify my investments portfolio. Do not put all cash into one single stock.

2. Buy stocks with stable fundamentals when it's share price is temporary low, reflecting short term investor fear. Do due diligence first to find out why the stock's price is driven down. Make sure it is not a serious problem. Do Dollar Cost Averaging.

3. A truly diversified investment portfolio include other asset classes like bonds, metals, energy, money market funds, international stock mutual funds, or exchange traded funds (ETF). Since S$P 500 is dominated by large cap stocks, diversification also means include a small-cap index fund or ETF.

4. Be a long term investor. Hang on to the stock investments with good fundamentals during cyclical declines in the stock market. These stocks will increase in value. 

Most of us are nursing losses now. Yesr 2023 marked a dramatic change in investors psychology. The old standby valuation metric of price/earnings is now not enough to guide us. We need to include price/sales because it dominated the narrative in explaining the volatility of stock markets. 

We have learnt a lot in 2022. Market volatility is here to stay. These radically changing market dynamics will remain in place for some time. Hope year 2023 is better to us.

$Tesla Motors(TSLA)$ 

$Intel(INTC)$ 

$NIO Inc.(NIO)$ 

Please DYODD before making any investment. Trade with care in this volatile market. Good Luck.🍀 

The above information is for reference. This is not an investment advice.

I would like to invite you to share your additional tips in the comment box below so that all 🐯 friendsthat read this post can also learn about the additional tips for good investments.

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