What will you do if market drops 80% of it's current value 5 years from now?

[nodols3]

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Just a scenario mga bros and sis?

What if the general market at it's current peak mo drop to 80% of it's current value 5 years from now?
Basically, like a recession sa Philippine economy, for reasons we don't know lang.

Provided ha nga wala mo idea or know-how nga mo drop diay.

What will do you with your investments?
Will it affect your life?
Will it affect the way you invest or see your investments?
What principles will you hold on to?

[makie]

What will do you with your investments? Gradually turn it to cash. Recessions don't happen in an instant, we will see the signs coming.

Will it affect your life? At some point, yes. I think everybody is going to be affected. Prices will rise, supply will decrease. Lisod gyud.

Will it affect the way you invest or see your investments? No. Recessions or even depressions are part of the market cycle. After sa drop, for sure mopick up ra na balik ang market and boom! Good days once again.

What principles will you hold on to? Generally the same principles I have even when the market is doing good. Moanticipate na man gud ko daan nga ang Philippines na pud ang magrecession after a few years. It could be in a form of another bubble bursting.

[M.A.D.]

On Topic, if such a thing were to happen, we would be going through what spain may be going through right now. Capital would be flowing out of the country very quickly than ever before. There would be no jobs, cost of goods would skyrocket, public order will be in disarray.

Off Topic:

It could be building up soon. We don't know when it can reach critical mass.

Back in the time of Marcos, when Ninoy died the international community was so disgusted that foreign banks no longer lent any money to that administration. It was also during that time when there were numerous infrastructure projects being made thanks to the loans made from the international banks. Because the loans had stopped, there was no longer any form of assurance that some of the investments would make a profitable return since some of them could no longer be completed.

Because of the dire situation the Philippine currency quickly lost its value, which resulted to high inflation as well as a reduction in trade. The government did not have a choice but to accept the 'rescue' by the international banks such as the IMF and WB at terms very difficult for the people.

After the ouster of the Marcos administration, there was still corruption present which still continues up to this point. Right now, we are borrowing staggering amounts of credit much more than what the previous administration is doing. Besides that, the present admin is selling government bonds that will mature in a few years time. In addition, credit rating upgrade to investment grade may mean more government bonds which means more public debt.

With the way the government handles investments, you won't be surprised how they will be able to pay back those bonds when they mature a few years from now. The most obvious way for the bonds to be payed would be for the government to raise taxes and cut on public spending.

In comparision, the Marcos years recession was due to perceived corruption, and the coming recession may mean the same thing, albeit on a much grander scale.

For the meantime, the inflows of OFW money have helped provide a high foreign currency reserves. This has helped strengthen the peso which in turn makes imports cheaper.

However, these imports are competing with the local market. Although this may seem a good idea at first, but this actually encourages businessmen to aim to cut costs and maximize profits by investing in new businesses overseas so as to send those goods to be sold here in the local market. There is not much being done by the government to generate manufacturing jobs here in the country since some of them may have a stake in making investments overseas. Because of this more capital is going out of the country rather than going in.

To add to the burden, social spending programs being practiced like CCT are bad for the yearly budget as such programs always give a budget deficit which means more government debt. Imagine paying for someone NOT TO WORK LOL.

[W.Axl Rose]

I'll buy more shares mao nang magpundo gyud lain funds

[quantuminplus]

sakto giingon ni makie, dili mahitabo nga in a blink of an eye hagba dayun ang economy.......ang akong buhaton ana kong mahitabo is sell 95% of my shares...... 5% remain..... maybe a year or two.... mobalik nagsaka..... then diha nako balik palit...... mao na nga time ang pinaka yummy....... that's what happened pag 2009..... katong naminaw sa mga market Gurus or maski katong nakahiaw nga it's an opportunity, na it's a good time to buy more kay cheap....... karon pila ka percentage ang tubo sa ilang shares......

[kate_lulu]

buy low sell high. pundo daan

[Bricksand]

Well for me...regardless of any reasons.

What will do you with your investments? I have several investments...for the recession proof - no need to worry continue with the business and for the vulnerable ones - I will keep it intact and I may acquire huge losses but that's only temporary economy will recover itself just like Mother Earth healed herself. This time I will invest heavily on stocks and mutual funds.

Will it affect your life? Not really - not to brag about this but I already anticipated things to happen and allocated some funds for each life events just in case it will happen.

Will it affect the way you invest or see your investments? Not much - economy has its highs and lows you must learn to feel it and be vigilant.

What principles will you hold on to? The same principles "I CAN".

[nodols3]

Does anyone know how high or low for that matter the market right now is?

Or is everyone ready kaha if there be a recession now?

I personally think as my opinion, that the market now is really high.

[Dorothea]

If the market drops, then you hold on to your investments until the market recovers. What goes down must come up eventually.

[vincent]

Doomsday prep..