In Chinese superstition, this is the "Ghost Month" and it is believed to be a bad time to invest. Or is it really?
We have to know that what affects investments like bonds, stocks, and the UITFs and mutual funds is not seasonality, but market developments. And the market reacts to different things: government regulation, international trade, industry trends, etc.
And beyond these external factors, don't forget the internal factors too: your capacity to invest, your reason for investing, how long you plan to invest for, your risk profile, and your understanding of what you're investing in.
Here we "pick the brains" of our experts when it comes to investing; sparing a couple of minutes will make you more knowledgeable than you were a couple of minutes ago ;) and maybe, will make you less afraid of ghosts.
First, we have Sheila Limon, RFP®, CWM®, CIS, MBA is currently the VP and Head of Direct Sales for First Metro Asset.
Is Ghost Month a great opportunity to accumulate shares?
Yes, it is a great time to accumulate shares precisely because if the price is not moving up, then you can practically get more during the alleged “ghost month”. For traders, this is a time to be heedful. But for long-term investors, it’s a good time to buy, especially stocks that went down due to this temporary weakness in the market.
Should you invest during ghost month?
Stock prices are perceived to be weak due to a decline in buying activities during ghost month. This happens when investors, particularly those that are dominated by Chinese investors, are expected to slow down as well. As nobody can really predict the market, regular investing—even in a ghost month—is a sure way to get more shares to sell at a profit to fund your financial goals.
Should investors be scared?
No, investors shouldn’t be scared, most especially if they know what they are investing for. For instance, if you are investing for a goal within 5 years, then a money market fund or a fixed income would be more suited for you. As its price prudently appreciates, then you are more confident that it would not be subject to the big swings of the stock market. In fact, FAMI’s money market and fixed income funds are registering positive returns both on a year-to-date and previous 1 year basis even during the Pandemic. But for those who are after the long-term: meaning, you still need the money more than 10 years from now, why be bothered if there is a small downward movement for just one month?
Tips or advice during the ghost month
Invest regularly and take advantage of the price movements. The more dip, the more shares you can buy to fund your long-term goals! Also, read on FAMI’s social media to be updated with the latest investing and market news, tips and strategies.
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