I hope you all had a happy Easter. Usually, I always go visit my family in New Brunswick during this time of the year. I had been doing so for the past 8 years, ever since I had to leave New Brunswick behind to find work. I went outside for a walk and I found out that Second Cup was open, so I bought a coffee and it makes my day. Because otherwise, nothing much is going on, if not that I updated my investment portfolio and debt pages just for you to enjoy.
I usually published an update of my portfolio only when I have good results, but these days, I am doing it mostly only to have a better picture of where I am at with all this mess. My net worth is currently at $196,823.60. I recognize in this the same situation I was in back on January 14, 2019, when I was on a tiny little $191 009.83. A few months earlier, back on August 3, 2018, I was experiencing my highest value ever, $257,187.44. This is simply to illustrate that no matter what, it worth it to hold on to stocks during downtimes. You should be selling your precious stocks only because the stock market is down.
This time, I was experiencing my highest value EVER back in February of this year, with a $257,187.44. And currently, my net worth is, like said, of $196,823.60. Just like last time, I expect my portfolio to make massive gains, despite that "this time" has nothing to compare to what we live back in January 2019. We will recover from this, the TSX is already on a recovery mode. We are no more in the alarming 11 000 points. I can easily handle a TSX in the 14 000 points, I don't have any problems with that.
The stock markets have the capacity to recover from anything especially when the governments around the world are all injecting millions and millions, billions of dollars to help smooth up things. It's quite interesting to see that in times of distress, governments will do whatever it takes, not for their people, but for financial security, for the stock markets, in the name of the capitalist system we live in and in which I believe is powerful enough to drive me where I want to be. That being of course in the magic $300 000 net worth, but that sound to easy now. So I am switching it to half a million dollars NOW.
looks like you're doing worse at stock picking than you would be just buying the market index, perhaps because of leverage, I don't know. Do you compare yourself to the market? It's worth it to figure out what works and what doesn't.
ReplyDeletebtw there are a lot of phrases here that are hard to understand. For example:
"This is simply to illustrate that no matter what, it worth it to hold on to stocks during downtimes. You should be selling your precious stocks only because the stock market is down."
maybe there is a "is" in front of "worth" missing in the first phrase and a "no" missing in front of "be" in the second, or I don't know what you're trying to say.
Either way, it's messed up. Going down from 258k$ down to 196k$ in one year is an illustration of only one thing: paper profits are only that if we don't cash them or lock them in some other way. If you wrote in the article how you've got cash on the side to buy the dip, I'd understand, but right now you're down 23% you need the market to go back up 31% just to go back to that February high. Ouch. Plus, it's in the US that they are pumping billions, not in Canada, so it's not clear how much the portfolio has exposure to that. There is a lot of analysis that you could do that porfolio that would be interesting.
Hi Anonymous,
ReplyDeleteI can do a simple analysis for you:
1) She only has stocks in her portfolio. Nothing to offset her 'paper' losses.
Is this good or bad? Depending on how you think the world is run? Massive bailouts, massive government interventions, more debt..
I'm betting against this..
Mark
I cannot parse what you're saying, Mark. If you're saying that stocks are bad and the market is doomed, or that when the market goes down, the only thing you can do with a stock portfolio is go down with it, you're wrong.
ReplyDeleteIt's totally possible protect some of your profits. One way is, if a position is up 100%, you sell half, and then you're playing with the house's money. Few positions will ever make 100%, so you would proportionally sell a smaller part of a winning position. There is in fact no other way to lock in profit than selling.
To minimize volatility, you would not only look at the charts and buy only stocks that appear to be going up, but you would also diversify and buy a basket of stocks that are not all corollated (ex: buying gold, even when the chart looked like shit, or buying sectors etf).
You could also add some short positions to your portfolio, whether by shorting or with an inverse etf. If you're long one bank, and short another (or short the index of banks) then you're effectively benefiting from the difference between the two, AND you also potentially protect yourself from a margin call in a market correction. (If the market goes down, the short position will be profitable, compensating for the loss on the long side)
Now, when I used the words "analysis", I actually did not mean any of that. I was talking about what's effecting each position, how much exposure there is to oil, US, etc. You need to have some sense of this to figure out how your portfolio is going to perform and where you might get slammed in a recession.