Markets are crashing again.. funny enough around the same period as last year’s record bloodbath.
I used to kick myself for not being bolder during the last crash, but now I’m in the same situation as before. And I’m doing much of the same by being conservative in how I deploy cash.
I did learn some lessons by not taking on as much leverage, and had been anticipating a heavy drop since around the end of last year. Reserves of about $100,000 were squirrelled away. But the ammo was mostly shot these last few weeks, and it’s kept going down.
Things could easily fall another 10%-20%, but I don’t think it will get as bad as Mar 2020. That was just a sudden shock, and the reasons for the fall was much more serious (pandemic shutdown vs interest rates increasing). Still, good to remain cautious if you are on margin.
My margin ratio is sitting at just under 200%, meaning I should be able to take a 30%-40% drop in the portfolio before getting margin called. This time, I also have higher contingencies, and I can sell these defensive assets if needed:
- S&P 500 ETF (USD $50,000)
- Amazon (USD $110,000)
- Temasek bond (USD $90,000)
So there is enough to clear my margin off. Probably not at the best prices, but I won’t be forced to sell.
In addition, riskier stocks like Tesla and Palantir are in the cash portfolio. So not on margin for those. Overall, not too worried at the moment.
Hope my red portfolio makes you feel better that others are suffering too! USD $50,000 gone in one night for me. We are in this together yes. It looked even bleaker last year, but it turned out well. As I’m sure it will eventually be.
My advice is just to hold tight, don’t panic sell, and scoop up a bit if you can. Go out, enjoy your hobbies, and do anything except look at the portfolio.
Take care all!