Bearish stock market today with all major stock markets in red. As mentioned before, when short term trends are bearish in global stock market, probability is higher for the share prices to go down further.

The main worry now, even US S&P 500 is below 2700 points, if falling further to below 2600 points, then it will follow the short term bearish trend of global stock market, then the risk of global financial crisis will be greater, unless US-China trade war could see light at the end of tunnel.

Based on Trump’s strong actions so far, the deadlock likely will continue until year 2020, second term of US presidential election. The House of Congress dominated by Democrats may also create new variables such as investigation of Trump or slowdown his future actions.

Market fear could be contagious, if US (contributes to about 50% of world stock value) stock market is also falling down, even strong fundamental stocks could have capital loss in stock market.

Take actions now:
1) If you have stocks, do Spring Cleaning (what to hold or sell)
2) If you don’t have stocks, aim for Dream Team stocks (what to buy, when to buy)

Spring Cleaning could be painful for some people. Ideally, cut loss should be integrated into earlier strategy when price drops by 10%. If the price drops more than 20% or even 50%, most people would simply ignore the losses, changing from a short term trader to a “long term investor” to hold on to paper loss.

Spring Cleaning does not mean it is a sell. It could be a hold. In general, perform spring cleaning this way:

1) Strong Fundamental Stocks vs Weak Fundamental Stocks
– Keep Strong One, Sell Weak One

2) If Strong Fundamental: Cyclic vs Growth Stock
– For Cyclic stocks (eg. banking finance, property, technology sector, airline), even if fundamental is good, if trend is down, need to consider to sell first, one could buy back in future.

For growth stocks, it is possible to hold with condition that the entry price last time was a low optimism price, otherwise it could still be a loss by now as entry / buying price is too high.