How to respond in Times of Uncertainty?

Economy Uncertainty

Imagine throwing a pebble into a still pond. How does the water respond? The answer is, totally appropriately to the force and mass of the input; then it returns to calm. It doesn’t overreact or under-react…

David Allen in Getting Things Done

What is happening?

Coronavirus COVID-19 pandemic is affecting almost every countries in the world. Social and economic activities are greatly affected. While we are fighting the virus, we are also facing economy challenges. Severe turbulence in the market with new data, news and stimulation packages, monetary decision by central banks all over the world and etc. are creating uncertainties among the investors and public. This situation will prompt many of us to make many instantaneous decisions daily.

Many will also be hearing from friends and relatives saying this is the golden opportunity to start investing. Should we jump on the bandwagon now? Stocks are relatively cheap, unit trust fund prices are low, property’s price dropping, commodities and etc?


Before we start discussing about investment, let me share about something i read recently during this time of Movement Control Order in Malaysia. I came across a short summary of a book written by David Allen – Getting Things Done (GTD). The opening quote (above) strongly caught my attention. Although he shared about events of our daily life, but I can’t stop myself from linking it to our financial decision.

A lot of time, we over react to an incident and I will account it to the emotional part of us. How many times have we seen panic selling in the market, rush buying and many decisions that are out of norm. When we revisit these decisions at a later, we often regret and promise not to repeat if given a second chance. However, it is more often we repeat the same mistake every time because our emotion tends to take over our rational thinking.

What can we do?

Before we really make a decision, I would like to suggest that you to reconsider the followings:

What is the purpose of your investment? What is your investment goal?

Is it for long term, medium term or short term? What is your investment horizon? What is the return expected from your investment? What is the objective of your investment?

If you are reconsidering investments made earlier, please ask yourself. Is it still within your expectation? Have you taken into consideration market volatility when you first started this investment?

How often do you invest?

Are you doing one time lump sum investment? Or are you doing long term periodical investment? If you are doing regular investment/ savings, isn’t Dollar Cost Averaging (DCA) part of your investment strategy? Isn’t volatility bring you better return if DCA was part of your strategy?

What to do to your investment?

If your investment strategy is regular savings/investment (DCA)

This situation was expected. Hence, why not just continue to do what you have been doing?

If your investment was a lump sum investment and you haven’t do anything.

You have 3 options:

  1. Cut Loss – Terminate / Sell off all your investments. Hence, materialise the loss and accept the fact.
  2. Do Nothing – Wait for the market to recover and you may cut loss or make profits
  3. Average Down your Investment Cost – Averaging down your cost by investing more into your portfolio.

What if I want to start investing now?

Great! This proves that you are doing well in managing your finances. Some are struggling at this moment worrying about daily expenses. To start investing, everyone of us want to wait for the lowest point before we buy in. As the simplest rule in investment says, Buy Low Sell High! But how often does this really happen. Most of us cannot accurately predict the market. Hence, we will share the following key points for your reference.

  1. Define your investment goal. What is your purpose, duration, your risk appetite and your strategy?
  2. Split your resources into 3 or 4 pots. Example, if you have RM 100 thousand, you may want to start with RM 30 thousands.
  3. Diversify. Diversify it into different sectors, industries, geographical areas and etc.
  4. Monitor your investment periodically. If your portfolio loss by 10 to 20%, you may want to further average down by investing your second pot. It is also the same when your portfolio grows by 10%-15%, so that you are catching up with the growth trend.

Buy low and sell high. It’s pretty simple. The problem is knowing what’s low and what’s high.

Jim Rogers

We wish to highlight that the quote mentions low, but not lowest; high, but not highest. Therefore, manages investment properly with strategy. Achieve your financial goal steadily and surely! All the best!

Financial management involves emotion, habit and attitude management. Feel free to contact us for further discussion. You can email me at

About the Author:
Ethan Teh is a Financial Adviser with Money Sense Advisory Sdn Bhd. You can read more about him here. You can reach also reach him via email at
Content of this blog is for informational purposes only. We shall not be liable for any errors, omissions, or any losses or damages arising from its display or use.

Information is based on writer's personal opinion and experience. It should not be considered as professional advice. Please consult a professional adviser personally prior to decision making.

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