Peaks and Throughs

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Ta-dannnn… “And correction strikes”, or maybe it’s going to be a mini-crisis or even worse a BEAR MARKET is about to begin….

To be honest I do not know which one is which, of course I hope that a major crisis is not at the door, but not so much for the implications on my portfolio, more for what it normally means for the World to have a widespread economic crisis (unemployment, social tensions and so on). As of today the Long Haul PF has hit a new record low, but albeit I am not happy about it, I an not overly scared.

As I am always speaking about my mistakes, one of the “good things” that I have done at the beginning of my journey was to not to invest all the available cash in one shot. As I have inherited the money that I am putting to work I could have easily unload the whole bunch into the market in December 2014, no questions asked. Instead I have decided to use the cash available in little instalments, of course trying to build up a PF in one year month by month and then keeping the unused cash in an external fund that was meant to give “certain” return (even if low).

Right now the major mistake has been the selection of the “certain return fund”, this is because I relied on the expertise of my bank’s financial promoter. This was one thing that I decided never to do anymore since 2001 (when I first got very badly burned by a financial promoter), but I ended up doing the same mistake. As a matter of fact the choice of index funds to my “scared cash” was wrong and on Monday we are going to correct this immediately.

Going back to the PF and the current turn that world markets seem to have taken an opportunity arises now with prices that a lower than they used to be, granting better yields on costs and higher chances of a “stock price comeback” in the future.

Again it’s not going to be an “all in approach” for me, as to my investment rules, if the stock hits the -10% threshold it gets into position to be bought up again. Anything between -1 and -9 is not really a big “dip”, unless we are talking about companies like 3M, UNILEVER, some of the Utilities that are almost bond-like investments and in their case a sharp drop in price is a bit more rare.

So it’s time to look for opportunities again, though everyone on the broad market says that it’s “not a time for buyers”.

How do you cope with peaks and throughs like these? How do you manage (if you manage) the cash that is needed to catch certain opportunities?

Long: Long all the stocks mentioned.

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4 thoughts on “Peaks and Throughs

  1. just like you, I have no clue if this is a blip, correction or crash… We will know in a few weeks or months. Until then, I hope not to worry too much about it…
    It will be my first time with that much money at stake…interesting times…

    Just like you, I had some extra cash to invest in December. But I have invested all already as it was not that big compared to my portfolio. I decided to DCA over 6 months…

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    1. I wish that I could DCA myself in small instalments, but the way things are in Pizzaland (Italy) makes it very cost inefficient to do so… So I have to invest in bigger lots (at least 1000 euro x shot), and this makes things a lot more difficult. I am a big fan of DCA investments, mostly because you tend to worry less about “timing the market”… 😛

      Like

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