I wasn't that much busy at work today, but I arrived very early because I was expecting to deal with a difficult task, but the difficult task wasn't so difficult after all. I had read up the news during my break. I was quite shock to see what I see: the TSX lost 300 points. OH NO! I always have a bit of sadness while going through a crash like that. Everything I worked so hard far is about to fall apart. This is not my first crash, its probably won't be the last one. But each time, getting a taste of the disaster is always hard and taste sour.
This past Friday, my portfolio closed at $119 426, with a margin left worth $11 817.02.
And today, I am at $116 975.84. For the margin, I am probably at something like 8k... Sound scary? It is. But I have cash on credit lines and tomorrow morning before going to work, I will transfer funds from my credit lines to my margin account, just to make sure I am safe. This is the kind of trouble you deal with while being on a margin account.
I had the margin since a little while now, I guess 2-3 years. I never had any trouble, but if the market crash, the value of the stocks crash and in result, there will be only a very small amount of cash left on the margin account. This week is payday, but after rent and student loans, I will have less than $500 left... I don't have many options. At TD itself, I have 15k of unused money on credit lines. At RBC, I have another 10k. I have a 7k credit card or so at RBC. And I have a few thousands of credit card at CIBC. I will use my credit line before my credit card and before even using my credit cards, I will transfer my TFSA over my non registered portfolio to help boost up my margin value. I had set up a similar plan in the past while dealing with crash, but I never had to used that strategy.
The problem with a crash like this is we never know how it can turn. Will the market crash again tomorrow? I really don't know. And no one know that for sure. The sooner will reach the bottom, the better it will be. I don't care being stuck in a slow growth economy for the next 5 to 10 years, but I REALLY don't a margin call from TD Waterhouse sexy brokers and I REALLY don't want to experiment a catastrophic situation.
It never happen so far and I don't expect something catastrophic to happen because my portfolio have a couple of strong players like AGU, BNS, BDI, CNR, CU, CGX, CDL.A, DH, EMA, ENB, EIF, FTS, KBL, XRE, MX, PPL, PBH, X, TRP, WEQ and WTE, just to name the very very good ones. Fact is, the best quality stocks won't let you down in time of crisis. The only reason why I am probably going to survive to the chaos ONE MORE TIME baby is because of those super right on top holders.
Among my recent acquisitions, I am EXCESSIVELY proud of my investment in Stella Jones Inc. (SJ) which gain 3.45% in my RRSP portfolio so far.
Telus (T) is still exceeding the $70 per stock despite the today crash - this is quite good too.
AltaGas Ltd (ALA) is still exceeding the $35 per stock. This is quite good knowing what happen on the market today.
Anyway, expect more chaos once I get my 2012 tax declaration completed. I probably will have to pay a 1k extra in taxes simply because I AM TOO RICH. Stock market, just get ready to get a punch in the face because I am getting enough of the bullshitting.
:0)
told you so about market crash coming.
ReplyDeleteThat's what you get for being patriotic.
ReplyDeleteMy, you are getting yourself deep into trouble - covering your margin with credit from other sources, - estimating to have to pay $1000 in taxes - which sounds like you also don't have the cash for. You certainly have blinders on. This is a good lesson on how not to invest and run personal finances.
ReplyDeleteFYI, I was in a margin call by a few hundred with my broker and they didn't bother to call. They won't call immediately, you probably have a few days to sort it out your self. Hope that gives you some piece of mind...but for the sake of the readers on this blog, try to keep balanced! We want you to do well!
ReplyDeleteThe decline is a market correction, not a crash. I suppose you haven't heard of the phrase: "Sell in May and go away."
ReplyDeleteyou call that a crash LOL you haven't seen the worse yet. it's barely a crash, it's like -2% only... if I were you sell your investments and pay off debt then you don't need to worry too much about the markets up and down so much...
ReplyDeletewell this shows to you that your portfolio is not well diversified and you are losing much more than the index and way underperforming the index.
ReplyDeleteWhen you have to continuously stress about your investments, whether you will get a margin call, it means you are not properly invested. Your investments should not worry you or stress you. Like many said, this is not a crash, just a minor correction. When the stocks are down 20%, you'll know what a crash is...
ReplyDelete"Sprott tells investors to stay in gold". What is he going to tell them, sell your funds out of his company. Sprott (SII) is a one trick pony and right now, not a good one as you can see by it's share price.
ReplyDeleteHere's a link to the Sprott article, I suggest you read the comments at the bottom of the article as like this blog, it's where you get the best advise.
ReplyDeletehttp://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/eric-sprott-tells-investors-stay-golden/article11264392/
you are in deep trouble. you should only be concerned once you get a margin call before selling your tfsa account.
ReplyDeleteThis is my favorite blog to read. It's like a guilty pleasure. It's like financial porn. Whenever I am worried about my investments, I read this blog a know that things could be much worse. Have to admire her risk tolerance but I feel bad because its obvious this is all she thins about.
ReplyDeleteI totally understand your pleasure
DeleteThat's not a crash, just a little correction.
ReplyDeleteYou'll be crying when the crash will come if you keep this portfolio: mostly commodities and no US assets, it's a recipe for disaster.
There is no real $ being used. This is pretend investing. Shill game. Nobody in real life could be this bad, even a monkey throwing darts.
ReplyDeleteBut it is a very entertaining blog on how NOT to invest. :)
this is one funny page to read, i needed the laugh this week with the stock market down. i have Crescent point , wow..what a drop from $37, bought CNR..big drop too, but thank goodness no gold. thanks Sunny for having this blog. remember..your so young, grey hair and all to make up the losses...(with solid stocks..u notice as soon as BCE drops,,,the drop is filled in quickly.
ReplyDeletetotal garbage portfolio no return in the past 5 years and market crash coming, losing a shit load of money
ReplyDelete