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written by reader When’s the good investment entry point for upcoming recession?

By hgpark888, July 22, 2019

Hello everyone,
I’ve been taking a step back from investing in individual stocks for a while and invested in more of index ETFs, for about past 4 years due to my work hours.
I stopped visiting stock gumshoe for about good 3 years or so, but I’m back now 🙂 and I’m happy to know that it’s still lively!

Now, I’m trying to get back into stock investing and have been studying for stocks that I’m interested in for about past three weeks.
I made some purchases but, i personally think market correction may happen in near future. And stocks are quite expensive all around.

I currently saved up about $80,000 in cash reserve on my rsp and tfsa account, besides my index ETFs portfolios.

What do you think I should be doing at this point? Make some purchases and wait for more dips? Or wait it out?

Any feedback would be greatly appreciated.

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.



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Travis Johnson, Stock Gumshoe

The best time to invest is when you’ve found a compelling value or an appealing speculation and have the cash to risk. Stocks have been generally “expensive” and a recession “overdue” for several years, and predicting when that recession or market crash will come is pretty well impossible… though it’s probably easier than buying while the market is falling and you’re scared.

I do hedge and I do have an unusually high cash balance as I look for opportunities and hope for panic “dips”, but making a lot of small decisions is a lot easier and less risky than trying to make one big decision.

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3 years ago

You should be looking at gold-related stocks . They have been left for dead since the last spike in mid 2016 but are now moving up pretty steadily since a low in May. Pretty much everything is moving up in the sector since gold broke resistance from its mid-$1300 range and has hit highs in the mid $1400s. The upticks include miners big and little, streamers, and etfs, particularly the 2X and 3x such as NUGT and JNUG.

I follow the sector closely and believe that things will only get worse in geopolitics and trade from here on out as Trump’s reactions become less and less predictable and turmoil increases in Europe with impending no-deal Brexit and the rise of anti-immigrant sentiment, Russian agitation, drift to far-right politics, etc. Europe could erupt again as it did in the 1930’s. Another overriding factor is the seemingly unstoppable increase in world debt both private and national which could lead to a cascade of bond defaults. Almost all the large countries have been massively increasing gold reserves and some, Russia, China, … are bit-by-bit moving away from using the $ as reserve currency. When the dollar falls and geopolitical tensions increase, gold goes up.

On top of all that the mineral reserves of the biggest miners have been dropping (NEM, GOLD (Barrick) etc.) which has led to a recent increase in M&A as the big miners gobble up smaller ones to increase resources. Just take a look at some charts and you’ll see a pretty consistent upward trends across the board, first from last December, then a dip in May and a faster rise since May. Of course as usual market predictability is iffy but given the increasing uncertainties as we approach the election I personally believe things ma y get worse.

Another sector that has done well for me for several years now involves the hardware and software companies that are disrupting the way business is done at all levels, particularly those that offer subscription services related to “the cloud” as well as hardware/chip companies that provide related equipment. My biggest winners have been MSFT, AMD, AMZN, SHOP, and CRM, but there are lots of other smaller ones – OKTA, MDB, …

Another area I’m looking at currently relates to the news that China is opening a new exchange very soon for growth companies that don’t yet show a profit, particularly techs and other enterprises that have been unable to list on Chinese exchanges due to restrictions. Some of China’s most successful giant tech firms had to initially list on the U.S. NASDAQ or OTC in order to sell their stock. Sjuggerud of Stansberry Research has been hyping this situation recently and predicting massive gambling on the part of Chinese investors when what he calls the “new NASDAQ” opens in China, enabling those folks to buy promising new techs for the first time in their own currency and in less than 100-share lots.

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