**Re-posted version: Removed reference to a twitter personality after MF removed the post but said I may repost it if I removed that reference.
I did not use margin, but this year I took over my taxable and non taxable accounts from a big brokerage and deployed most of my savings and retirement in self directed fashion. I’ve invested part-time over the years with a typical Motley Fool buy and hold approach. I’ve been a member of MF since the 90s, so I’m not exactly a newbie.
I scaled into a growth portfolio over 2021. Not necessarily as a strict adherent to dollar cost averaging, but mostly that it just didn’t seem prudent to invest the equivalent of 10 years of my salary dollars all at once.
My peak at 2021 just prior to the drawdown in November was up about 30%. Meager, kind of, compared to others here but I had several “poor timing” buys - UPST, LSPD… but overall sitting up 30% was gratifying and reassuring. I didn’t feel pressure to compare myself to others, and I’m acutely aware of historical returns in the stock market, so 30% felt awesome! Since then, I have watched with a “buy and hold” philosophy on most of my holdings (I did sell out of LSPD on day of earnings and trimmed UPST a little). I am now down about 11% since I took over my account, having completely erased any gains I had from 2021 by Christmas.
In real dollars, I have lost $1.3million from my ATH (people rarely post real dollar amounts here).
I don’t need the money for many years, so perhaps it will recover. But I have two thoughts that feel like a cautionary tale to guard against developing a cult-like, group think mentality here on Saul’s:
it is plausible that “things are different this time” as we are seeing the unwinding of generational phenomena: quantitative easing, a release from an era of ultra low rates, trying to exit a pandemic in stuttering fashion, and a political climate in America which has not been seen, well, probably ever.
Our philosophy here of head-in-the-sand with respect to valuation may be a dogma we should reconsider. It is very possible that this is the sole greatest threat, the most acute blind spot, to the members of this community. Some Growth Devotee Investors (GDIs) have posited that a 65-70% decline from all time highs for growth stocks is possible if not likely. If that were to happen, my retirement would likely be out of reach indefinitely. Not an end-of-life event, but it would certainly change where I thought I was going in the next 20 years.
For others, it may signal financial ruin entirely.
My portfolio (percentages not listed, but ranges from 5-8% generally) below. One could certainly point out that a few aren’t really current high growth players - PATH, MGNI, ROKU in particular. Part of that was not being comfortable putting such a high dollar amount in 8 stocks - 14-15 Is more my comfort level given my stage of life and proximity to retirement. In retrospect, this was the wrong decision, but sometimes education can be humbling.
Anyway, I’ve very little choice but to continue the strategy I’ve embraced and hope that this is but small sample size growing pains. I can honestly say if the carnage stops here, if we’ve somehow found a bottom, well, I was prepared for a 30% drawdown all along so this feels about what I was prepared for.
That it happened in about 60 days, however, was shocking.
And boy, I hope the pessimistic GDIs are wrong.