Mid-July Update

Hi friends, 

I hope that this blog post finds you well and that you have continued to stay frugal and stay vested as the market continues to be volatile. I have been a bit caught up with my internship, side hustles, and my FYP - Which explains for the delay in my mid-month updates. 

But yes, I am only left with 3 weeks of my internship, but I can anticipate that my commitment to this blog post would be further challenged as school is going to start (and my side-hustle of tuition is increasing in demand as the year is heading to an end). Rest assured, I will definitely continue with my mid-month updates and my start-of-month updates even if I stop writing about the financial books that I have read. 

Now, let us talk about the things that have happened:

1. Tesla's potential entrance into the S&P 500:

There has been another round of speculations about Tesla being added into the S&P 500 again (since it became the most valuable car company). Furthermore, if Tesla is included in the S&P 500, it would account for 0.8% of the market. WOW.  But Tesla would have to fulfill 1 more criterion: A) Posting a profit in the second quarter of 2020 (As the sum of the previous 4 quarters' net income must be positive, with the latest quarter being positive as well)

If Tesla is included in the S&P 500, it may mean a 3-5% increase in the stock price as the index funds would be required to put the stocks into its portfolio (driving up demands and price). Thus, if you are already holding on to the stock, please do not sell. 

But do note that I am not advocating for you to buy into the stock with your live-savings. You have to take note of one important situation - What if Tesla isn't added into the index? Considering that the price of Tesla is so high right now (because of the possibility of inclusion), I would expect the price to fall if Tesla cannot enter the index as investors are disappointed. 

2. Market trading side-ways for a month:

From the 8th of June 2020 to 15 July 2020, the market dropped by 0.18% (With volatility along the way of course). So yes, the market is effectively trading sideways for a month now. Whether or not it will continue to happen for the foreseeable future - I do not know. But I know the best strategy for this situation. Dollar-cost-averaging - Slowing investing your cash into the market regardless of how the market is doing. 

That is the approach that I am doing right now and it will be how I will do it for the rest of my life. heh. 

3. Economies closing up again:

I believe that you definitely read it in the news about the states in the US/ countries in Europe that have to begin closing up due to the increase of Covid-19 cases when the economy opened up. This would mean that circuit breaker 2.0 might happen. 

What this might lead to is that we might have another bear market for the stock market (which is something that I am looking forward to). So yes, let it fall, and I will deploy my money like never before. Heh. 

Here are some of the changes ton my investments from the following news:

1. Continue to DCA, but moving into platforms which allows fractional ownership (StashAway)

2. Putting more effort into my side-hustle (for more cash reserves to deploy if another downturn is to happen)

With that, 

I hope that you will be reminded that buying stocks is like buying your groceries - YOU BUY MORE when the price drop. Not when the price increases.

Stay vested, Stay frugal my friends,
Dionysius