I’ve thanked you off board before and want to reiterate my appreciation for your tremendous generosity with your time and for sharing your investing wisdom. While off topic, I just did an analysis of my portfolio and thought this might be of interest.
From March 5th through March 16th, my IRA account lost 53% of it’s value. I’m 10 years from retirement. We were up significantly year to date and I held fast through the worst of the decline. Every day I checked the Fear & Greed index, knowing that selling out of fear would be a mistake. Finally the coronavirus panic wore me down and I sold my lowest conviction stocks and trimmed others to go to 25% cash.
My idea of cash is BofA preferred shares that pay a 6% dividend. In the '08- '09 protracted recession, they earned a steady 6%, which in my mind was better than 0% or losing value.
In 1999 on the weekly Motley Fool radio show I learned that when they declare we’re officially in a recession, that is the bottom. This nugget worked wonders for me in the dot.com meltdown and the '09 recession. On March 28th, 2020 the IMF announced we were in a global recession. The BofA preferred shares went Ex on April 1st. I sold them and went back in on my highest conviction stocks.
March 1st my portfolio consisted of:
Today the portfolio consists of:
Today we finished up 21.9% YTD. I plugged today’s closing values into the quantity of March 1st holdings. If I had held fast and did not make any changes, the account would be up 9% vs today’s value. We’d be at +31.9% YTD. After this market crash to be +21.9% is excellent. That we could have been up 32% is kind of ridiculous.
For a couple weeks in March it seemed the world was ending. The real economy is separate from the stock market. I am sensitive to the fact that Main street Americans are feeling a ton of pain in communities across the country and will for some time. Having a set reserve that my family could pull from if everything collapsed brought a lot of comfort. Was that peace of mind worth 9%? I don’t know. Maybe.
I do know that if the market has a second downward spiral, I will hold fast and won’t let the noise and blood in the streets get to me.
Long story short, thank you again for sharing your knowledge and strategies. Thank you as well to all the other contributors who post here. I’m not tech savvy, and wish I had more to add. Hopefully you realize the incredible positive impact you’ve had on my family and so many others’ financial well being.
You are 100% right about staying fully invested, not trying to time the market and especially about how the movement to the cloud does make these great SaaS companies and this time different.
With kind regards.