4 Unforgettable Months – Hard Ruthless Lesson

I am sure all the investors out there will agree that it was an unforgettable 4 months start to the year 2020.

In those 4 months, I experienced more upheavals in my investment portfolio than probably all combined in my last 20 years of investing experience. I have never seen the stock market dropped so quickly so ruthless within such a short time.

A DARK DARK DAY

On 23 Mar, STI declined to 2233.

It was only a month ago when it was 3142. At that point, STI has retreated 30% within a month. And I remembered within that period, STI could sometimes drop 5-10% a day for a few days in a row.

It was a terrible sinking feeling when I saw what happened. I was speechless!

I can imagine that must be such a big shocker to new investors that they probably have to think and think and think before they will ever step into the stock market again.

Well, not only them, even for seasoned investor like me, I was not spared. I remembered sleepless night when I saw the declining value of my investments. The fact that some of the stocks were funded by margin actually led to greater fear and anxiety – I don’t know how to describe … the feeling was pure devastating.

THIS COULD NOT CARRY ON …

My rational mind told me that it could not carry on forever; at one point, the stock price would be attractive for investors to pick them again. However, I must admit in the midst of all that, that sinking ship feeling really made me feel like throwing in the towel and gave everything up. It was a real panic attack. I am not surprised that many people did that and I don’t blame them – I did a bit of that too … it was pure panic ok!

Maybe with the 20 years of investing experience under my belt, I know that was also the best time to pick up good quality stocks. I gathered whatever left of my courage, stepped into the market to start buying.

I drew out my residual fund and sold the poor quality stocks (even at a steep loss) in order to build my “warchest” and started accumulating the better quality stocks and rebuilt my portfolio.

A NEW START

Now a month from that dark dark day (23 Mar 2020), I feel my portfolio looks more robust, more healthy and more resilient than before. The fact that STI started climbing back from the trough also helped to repair confidence.

Yes, I lost quite a fair of money (actually lost it, it was not paper loss) and furthermore, my current portfolio is still 15% below its breakeven value. But I think this portfolio will survive.

The experience in March/April also taught me the risk of leverage and the fear and anxiety it could bring. It was painful and horrifying. I promise myself that I never want to go through it again, i.e. no sleepless night anymore.

This downturn has also pushed my FIRE dream at least 5-10 years out. No choice … my only hope now is to secure my current job and start accumulating wealth again.

MY PORTFOLIO

In case you are interested, the top 10 holdings in my portfolio currently are (trust me, it is quite different from the time of end Feb):

  1. Singtel
  2. OUE Commercial Reit
  3. UOB
  4. DBS
  5. Manulife Reit
  6. Suntec Reit
  7. Ascendas Reit
  8. Fraser Logistics Reit
  9. Hong Kong Land
  10. MapleTree Commercial Reit

By the way, the other major lesson that I picked up was that of the benefits diversification of investment asset classes – I will share this more in my next blog.

Thanks and have a great long weekend.

Regards,

Warriortan

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