Mid Year Review (1) – Upping Quality of US Portfolio for Better Sleep

I took some time this morning to review my investment portfolio.

I have been deferring this activity because I dreaded to see the sea of red in my US stocks and to calculate my absolute losses.

I know my loss is significant. S&P500 is down 10% year to date. But it could have been worst if not for the recent recovery. It was down 20% at its bottom in the middle of June. Thankfully it has recovered 10% since then.

As US market was going down, I was averaging down my cost. However, after a while, I felt I was catching a falling knife. The drop didn’t stop. I ran out of liquidity and I stopped. Hence, I didn’t manage to catch the bottom. Sad … as of today, my loss in US stocks is 40%. It reached a peak of 62% at one point.

However, when I was averaging down, I was also upping the quality of my US portfolio.

Throughout 2021 and first quarter of this year, I had been loading up on growth stocks and at one point, it looked like a smart move. I made some money.

However, the drastic fall shocked me and caught me off-guard totally.

Photo by NIKOLAY OSMACHKO on Pexels.com

I lost all my confidence in those loss making companies, so I decided to do a switch to what I thought are “better quality new economy” stocks like Amazon, Apple, Microsoft, Netflix and some value stocks like Ford, JP Morgan, Disney. Alas, they were not spared too later and I suffered a second round of heart attack.

Having said that, I did not regret the move. I think I can sleep better today than if I were to continue to hold on to those loss making growth companies. I still have exposure to some but they are manageable.

I know it sounds like an old record … wait until you suffer from it … then you would know that a good night sleep is priceless.

It was a good lesson learned – not my first with speculation stocks but hopefully my last. This one was particularly painful as the exposure was more. Hence it was more costly than all the previous.

I thought of penning a short note to share this with you. I hope it would serve as a reminder and made us pause for a second before clicking that “buy” button without proper due diligence.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s