Be humble - Do not react market change!

March 17, 2020

Introduction

It is tough for me to learn as a passive investor. I have over $100,000 on my investment account, and then I saw so many opportunities for me to make money, in reality, now my market value is down over $13,000 dollars. I plan to buy high and sell low, cut loss today, and then I learned from my friend's advice, after two hour and twenty minutes conversation, I change my mind to stay put, continue to rebalance.

Case study

I like to make money in long term. Best choice is to time the market pefectly, so I should sell everything when SPX is 3300 to make 10% profit, and then get back in market today when SPX is around 2500, over 30% loss compared to highest position 3300.

I need to do a simple checking on my TFSA. Here is the snapshot:

I like to keep VDU.TO, VFV.TO, VAB.TO as a balance portfolio, 40% VAB.TO, 30% VDU.TO, 30% VFV.TO. Right now, VDU.TO is more than $2000 less compared to VFV.TO position.

Think about in other way, VDU.TO's price is $27.74, which has to go up 27% to price $25.37.

27% usually takes more than 10 years if interest rate is 1%.

Change from balanced to low risk

March 16, 2020

Introduction

It is not easy for me to stay humble, not over-confident on my investment strategy. I got contacted by my friend on March 10, 2020, I was over confident and I did not expect that things can get so serious related to corona virus. I need to make change and stay on the course, but reduce the risk.

Asset allocation

It is so important for me to apply asset allocation instead of timing the market. But after carefully consideration, it is better for me to save some cash in my investment account, and I like to use those cash to hedge against equity asset instead.

Here is March 16, 2020 S & P 500 index:

If  I stay humble, and do not be too greedy, then I will not invest another $13,000 Canada dollars on TFSA in February, 2020. Instead I should show concern about Chinese in China, and learn how to prevent Corona virus spread instead of focusing on SPX return for another year, another 30%.

If I am humble, then when my friend Pamela contacted me on March 10, 2020, I will carefully consider her suggestion, and then adjust my asset allocation, reduce equity from 50% to 25%, with total investment amount over $100,000 dollars.

Now I like to take loss, and sell 25% of equities, and then use those cash to hedge against equity. I do believe that SPX will continue to go down at least 500 points to meet 2000, or 2009 level.