What investment strategies to use?

Now, this is a very tough topic to discuss. Despite being an advocate of dividend yield investing, this does not mean that one should be narrow minded and fixated on employing only this particular strategy. Instead one should always embrace value investing techniques as well as the buy low and sell high approach. Let me elaborate further below.

I have utmost respect for financial gurus such as Mr Dennis Ng, who is the King of Retail Investment in Singapore. By combining technical analysis and financial analysis as well as other background information on a particular stock, this increased the probability of staying one big step ahead of the market in terms of the appropriate time to buy or sell. At the same time, I am also a huge fan of Mr Warren Buffet who believes in value investing and largely ignore the irrationality of Mr Market. If a company has a solid business which is easy to understand and also led by good management as well as offer a good price relative to it's intrinsic value, Mr Buffet will invest and hold for long term. In his letters to the key managements of all the business units, Buffet always reiterate that Berkshire will be there for the long term hence business should always look at the long term growth rather than employing short term tactic to boost profits in the short run. Buffet does not engage in frequent buy and sell of the different companies acquired.

Next, cash is indeed king. Do keep truckloads of it in the bank accounts. I do not believe in staying fully invested. In the event of a stock market crash (read 50%-60% decline in prices), this will be the time to pick up stocks which offer good value. At this juncture, one should fill one's portfolio with lots of capital growth stocks such as banking counters which generally falls the fastest but jump back up rapidly once confidence is reinstated in the gloomy economy. The global financial crisis that happened back in 2008 will no doubt return. Such periods are the best time to double or even quadruple your capital. These opportunities unfortunately only appear a few times in one's lifetime and to take advantage of it when all the stars are aligned made it all the more tougher. But safe to say, any one such crisis will most likely propel one close to achieving financial independence. 

The sad fact is that recession or even depression is the only way to drastically increase your wealth. Retail investor invests only to stay ahead of inflation while accumulating enough capital for that big day. But the question that comes on that fateful day will be whether one dare to plough the market and pump the capital on such gloomy market sentiment and move in the totally opposite direction of the herd and skeptics?