Stock market crash does not sound like a good thing to happen. Most people do want to see stock market crash.
People used to related stock market crash to
- Money losses in stock market
- Bad economy
- Loss of jobs, high jobless rate
- Bankruptcy
These are conventional wisdom.
Why not we view stock market crash from another angle - If we do things correctly, stock market crash benefits smart investors:
This is the only time great counters are offered at dirt cheap price. Time for bargain hunting. It is time to buy low. We can enjoy great appreciation in long term. For those with good dividend payouts, we can buy it at low price which mean high yield. For a share offering 0.10 dividend per year, there is huge difference in dividend return if we buy it at $1 vs buying it at $3. It is 10% vs 3%
For more aggressive investors, they can take further step to short sell. The more the market crash, the more they earn.
The conclusion is, we should look at market boom and crash neutrally, and take necessary actions to benefit ourselves.
[Note of Caution: Stock Short Selling is strictly prohibited in Malaysia. We can do shorting on the KLCI via FKLI futures contract. For further details you may Google it]
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