I have to wonder if the increase in medical demand combine with the decrease in fuel prices as well as the increase in isolation ordering has offset the decrease in commercial demand for companies like UPS or Fed-Ex. If it has expectations may exceed earnings. Speculation but potentially a longer play. Bowing is also on the radar as a 2-3 year play.

All things considering my portfolio is really only down 15% since February. I also fully re balanced my entire pro-folio at the end of February. Down not being a reflection of actual loss overall just change in value since February.

^ofthevoid

U have puts still right ? Grats brother

For those that play in BItcoin, options etc. What is your compounded average return? Iv taken what I would say is a far more conservative route in comparison to some of the choices being touted in this thread.

It would be interesting to see if you had it on hand. For myself i don't even track contributions anymore except RRSP to make sure i don't over contribute. TFSA is maxed by Jan 1 every year. The TFSA contribution limit is 69K and its sitting at 122K and only 2 years ago I was still considered a student so a bit difficult to say the timing on contributions but id say the majority were in 2017 so that return i would deem as good for what I would call near passive investing (granted market conditions were absurd). My RRSP and unregistered accounts have performed similarly.

I often wonder if the effort & risk to reward is there for something like Bitcoin. My bias is to a near passive approach with a full understanding of asset allocation but just as important for Canadian inventors, asset location.

As for play money I keep around 30K to toss around and have a 60/40 split in TMF/UPRO 3x leverage risk parity strategy for the fun of the experiment as posted on boggleheads. For those interested Its actually netted an okay unrealized gain during this covid period due to the 60% weight in TMF. Unfortunately the overall weighting of it as part of the total portfolio has no material impact on its value but its interesting none the less.

This post was edited by SBD on May 12 2020 02:27pm

Day traded some today, but missed the big eod drop, sold too early



I'm up like 19% of overall portfolio over the last 30-40 days trading options. I use a fairly small % of my money to actually play in them though. Never more than 10% of overall portfolio, don't have the risk tolerance to really swing for more.

As far as BTC, i personally don't have the nose to trade it short term. To me it's more of a long term buy and hold. I bought some at 6400 and sold little by little on way up to 10k but still holding most as a long term investment.

Here's the other consideration though and i have a half written article on this ( I sometimes / have to get back to writing articles for blue collar investors or new investors of all ages) , you're timing things, meaning overtime you're keeping money out of the market to attempt to yield a higher gain than the S&P. Data supports that time in beats timing on average. If you're missing days by trying to time you could miss the few days that are the "best" days over a period of time which highly impact the total value of your portfolio

Here maybe ill copy paste my half written article below and try to upload the graphs that go with it. Give me a few. Maybe it leads to a more interesting conversation than calling Ghot a boomer. Keep in mind my articles are for very very new investor so you're not the target audience.

Insert Fear Mongering Headline for Views Here – Opinion Article No. 1 – Being Rational

Now seems like the perfect time to talk about emotion and investing. The world’s on fire, the TSX has had its worst day in history and the S&P 500 has had its worst day since the market crash in the 80s. All is lost, we’re all fucked, and investing is a stupid waste of money. Personally, I’m down six figures from the last S&P high point but I haven’t missed an investing beat. I have continued business as usual and contributed consistently.

This won’t be an article saying you shouldn’t have emotion when it comes to investing. To say I feel nothing watching my portfolio swing around six figures in my 20s would be a lie. I drive the girlfriend mad ranting and I vent daily to a group of friends in a similar situation.

Emotion is fine. Acting irrationally on emotion is different. I vent because I know my charted course and I have no intention of deviation from it, but I still need to rid myself of pent up anxiety. By nature, I am the person who goes to the airport three hours early before a domestic flight when security is likely to be 10 minutes and if I’m catching a bus I’ll be there 10 minutes early standing in the rain. But at the end of the day I know myself. I know that’s who I am, and my investing risk tolerance is a reflection of myself.

Today’s news outreach is at an all-time high, social media provides multiple channels of information, and the use of cell phones and other mobile devices bombards us with instant updates 24/7. If you were to actively try to ingest all the information in those articles on a daily basis there wouldn’t be enough time in the day. The noise is overwhelming, and a large majority of the news is coming from companies that are pushing their own agenda.

Media would have you believe that they know all. The stock went up because of XYZ and immediately the next day it plummets, well it went down because of 123. By the time the majority of those daily articles bombard your mobile device, the event that caused movement within a market already happened. You missed the chance to act on it because you don’t have a crystal ball that predicts the future just like the author of that article didn’t. The news you’re getting is a reaction and writers have to put something out there to get views which generates revenue. In my opinion it’s a pretty big crock of shit.

Oh, and if you’re wondering, fear mongering works. What’s known today as “click bait” is a key strategy in a journalist’s world. Every journalist knows you need to grab a reader’s attention. A bit of a conflict of interest I’d say. On one hand you’re trying to inform the public but on the other you’re trying to line your pocket and it just so happens in this day and age click bait works. Maybe keep that in mind when you see all the articles stating the market is crashing.

Let me throw this at you as well. With the bombardment and ease of transmitting information, don’t you think all those sources are in competition with each other to get as much of your time as possible? One could reasonably conclude that many of these companies have looked into human psychology and adapted their approach to getting a reader’s attention. When I say competition, I don’t just mean other media sources, I mean social media, YouTube, reddit and everything in-between. The human attention span is more threatened than it ever has been. Do a social experiment on yourself, just start a timer and browse as you naturally would on your phone, see what topic you started with and where you end up 20-minutes later. You probably go from market crash to cat video. You couldn’t do that before our technological leaps and bounds. Makes sense with the plague of hyperlinks in text and constant recommended articles or videos running down the sides of most pages.

Media ultimately has an influence on decisions and fear is well known to generate a fight or flight response. With the constant bombardment of fear mongering articles, you can easily start to manipulate the responses of the general public. In an article from the American Psychological Association they cited LeDoux’s research. The research focused on a network of brain regions responsible for detecting and responding to threatening stimuli. It shows that in the center of that network is the amygdala and there’s two pathways when amygdala processes a fear response.

1. The low road is an immediate reaction, little to no thought involved, meaning no processing time. Like many humans presented with a spider in front of them.
2. The high road is a much slower response due to a higher processing time. The high road would be processing the situation further saying, “Wait I know that’s a harmless spider, no threat to me”.

Source: https://www.apa.org/monitor/nov02/synaptic

Actually, think about that. What if because we don’t ingest information fully anymore would we be on average be defaulting to that low road response?
Let’s look at a figure from Pew Research Centre on public perception of crime rate at odds with reality

http://www.imagehousing.com/image/graph-crime/1453903[/URL]


You would think that the graphs would show the same trend, but they don’t. Despite a significant drop off in violent crimes, public perception of crime rate hasn’t gone down proportionately. Could it be because we hear about crime more now that media can reach everyone constantly?

There’s a concept known as availability bias. Availability bias says that people are more likely to weight their judgements toward more recent information resulting in new opinions based on the latest information acquired likely being from what we have been discussing, media, social influence all those notifications. To me that kind of sounds like a low road response.

I start to wonder if media bombarding me with their agenda could generate a low road response to fear altering my decision-making process enough to make an irrational decision. The noise being echoed by most media saying the market is collapsing in the wake of COVID-19 could lead to some very drastic decision if made irrationally which could result in a lot of lost money.

Anyway…back to investing. If you’re like me you are an average person going through daily routines, relationships, work, balancing life, money, family, and everything else. Your day job is not being an expert in predicting market movements to react before an event, but does that mean you can’t be proactive and still be effective? Can we ignore the short-term noise that might be triggering low road response leading to irrational decision making? Let’s look at the data.

Time in the Market Vs Timing the Market

Let’s use figures Fidelity has already compiled to look at time in the market vs timing the market and lets look at it from our perspective, the average investor with investing being a primary passive activity in our daily lives. Fidelity’s figures are based on the performance of investing $10,000 into the S&P 500 and while you can’t directly invest into an index you can invest in ETF’s that mimic the S&P by matching its holdings. The figures are also pre-tax and assumes all dividend reinvestment.

The findings are staggering. By missing the 10 best days over a 38-year period you would be cutting your return in half. It drops dramatically from there.

http://www.imagehousing.com/image/graph-money/1453902[/URL]

I know I can’t predict the market any better than a wall-street algorithm that can run more data in minutes than I can in a lifetime. By trying to time the market and moving money in and out the chances of missing the best days are extremely high given how few you would have to miss over a very large period of time.

Individual Investment Picks Vs. S&P 500

Annually Dalbar publishes reports of average returns of the S&P, mutual funds, asset allocation funds, etc. In the 2017 report Dalbar published some eye-opening figures. The 20 year annualized S&P 500 return was 7.68% while the average equity fund investor was only 4.79%. The average fixed income mutual fund investor was significantly less.

Per the study 50% of the reason that individuals missed out on similar performance to the S&P was psychological reasons inducing loss aversions (withdraw due to market fear), metal accounting (separating investments mentally to justify the success and failure while not looking at a portfolio as a whole), lack of diversification, group thing / herding (following what everyone else is doing), regret (not performing a necessary action due to the regret of a previous failure), responding to media stimuli, and over optimism.

The study found that the two largest factors was the herding effect and loss aversion. From an anecdotal standpoint does that ever ring true for the current market turbulence as a result of Coronavirus. Friends telling me their parents are selling stocks to convert to GIC’s. The market diving 15% in a day due to shear panic selling and everyone doing the same action.

The study dives into human psychology and that the fear of the drop will out weight the thought of buying as people mass sell resulting in a cheaper stock.

Would you be the person to give into group think or be influenced by the thought of a significant drop in market value? If so, its possible your portfolio isn’t calibrated to your risk tolerance and you’re running the risk of losing a significant amount of money due to an emotional reaction. Lets look at risk tolerance next.

Risk Tolerance

Now you’re thinking well based on those figures I should just invest into the S&P. No that is not what I am saying. Putting 100% of your investments into the S&P will yield more than a bond mix but it comes back to your risk tolerance. A 100% investment into the S&P will also see far wilder swings in value due to the volatility of stocks compared to bonds. Can you handle it without acting irrational? Will the wild swings be detrimental to your personal life causing stress beyond what you can handle? There’s value in safety and being able to sleep at night. There could also be other factors like age. If you’re heading into retirement you may put a higher value on having as less volatile portfolio and with less risk comes less rewards, but again it’s your risk tolerance based on a verity of factors.

Vanguard has some model portfolios with various stock and bond splits from 1926 to 2018. To no surprise a 100% stock investment yielded the highest average annual return at 10.1% while the most conservative portfolio of 100% bonds yielded a 5.3% return but in the worst year stocks had a -43.1% return while bonds worst year was a -8.1%. Risk vs. reward. Your allocation of stocks bonds and other investments will vary depending on what you can stomach.

Vanguard Link: https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations

The point of all this being you have to figure out your risk tolerance before you invest everything. Discovering your risk tolerance mid-market crash could be an absolute disaster and set you back years. Be proactive, shut out the noise of the world and figure out what you can handle and what you can’t then stay the course. Don’t let modern media and the rise of social medial group think influence a rational course with irrational short-term behavior.

Diversification

Diversification should also be a consideration in your investing strategy when managing risk. I myself don’t have the time to analyze individual stocks, by picking individual stocks I’m essentially gambling and putting my eggs in one or few baskets. I simply employ a strategy which mitigates the risk of a significant value drop in my portfolio as a result of a single pick going under. What if you had bought into the hype around marijuana, some bio-med stock like Valeant or even a blue-chip stock that suddenly faced significant adverse conditions. Your savings would be at a much higher risk than a diversified portfolio.

I need to be able to sleep at night knowing that if one company goes under its not going to drag down my entire portfolio. I simply use ETF’s to hedge the risk, with the backbone being something that mimics the S&P like SPY. By essentially being invested into all the companies on the S&P I’m not putting all my eggs in one basket, this naturally reduces anxiety during market downturns and as a result I’m less likely to make any irrational decisions.

There’s something to be said about the modern-day mass movement to ETF investing and the lack of looking at the value of the underlaying assets in those ETF’s but again I mitigate that risk by choosing something that mimics an index. To be including in something like the S&P 500 index there’s specific requirements. This acts as a filter for my holdings. If a Company does not maintain the requirements set out, it wont be included in the S&P and as a result wont be part of the ETF mimicking the S&P.

Doller Cost Averaging

HAVE NOT FINISHED ARTICLE YET OR PROOFED

This post was edited by SBD on May 12 2020 03:14pm

I have about 30% in long positions, mostly cash now. Most money i'm playing with i will need fairly soon, it's not a hold until 60 type strategy. You're right as far as long term buy and hold is best but that's not my investment horizon.

And yeah you make some really good points. All of those points are really important for any long term portfolio. I wrote a 20 page portfolio breakdown few weeks ago.

Essentially how would i breakdown 1 million investment.

I went

35% SPY Index
30% Individual large cap names-all investment grade

20% US treasury-using barbell strategy
5% foreign investment grade bonds gov't using etf
5% investment grade corporate bonds also through etf

2.5% BTC
2.5% Gold

This post was edited by ofthevoid on May 12 2020 03:24pm

Good lord i could not figure out how to upload images on JSP anymore. I haven't had to since trading days probably, every site I ever used is pay walled now. My article might be a TLDR but you may find some of it interesting. Typically I write more educational article and not my opinion and I stick to my own lane but when my buddies parents said they were liquidating their investments and moving all in on GIC's during COVID I thought, if there's one there's more. I just felt like writing an opinion article with some figures to support my opinion sprinkled in. Again its not really my thing though so never got around to sharing it.

I am taken back by the overall lack of education around basic investing. I would say over 50% of my non finance friends wouldn't know what a ticker symbol is let alone understanding capital gains, withholding tax, asset allocations, locations, etc. It's not hard to see how someone with every a basic understanding would quickly pull ahead creating estate wealth and eventually creating further disparity between haves and have nots.

As for my own strategy at this time the vast majority is in VUN/ VOO after re-balancing its close to 80% (VUN / VOO & other similar indexes mimicking S&P). I say other similar indexes because i did a bit of loss harvesting in my non-registered account and just repurchased a similar index but not similar enough that CRA would deem it a superficial loss. I am in my 20's. My allocation is a reflection of the risk I am willing to take on. I keep a play fund, a small cash reserve of 4 months of living expenses and still hold a few individual picks that are slowly being weeded out but continue to out-perform (Brookfield (BIP)).

I would also consider taking a more hands on approach in the short term rental market once turmoil comes to an end and move part of my asset allocation into real-estate (particularly AirB&B in tourist towns). Particularly targeting towns that tech is flocking to due to the high cost of Vancouver real-estate and SanFran. The idea being to maximize appreciation as those smaller towns populations grow. Like a Kelowna for those who are Canadian.

This post was edited by SBD on May 12 2020 03:41pm

^SBD my personal profit on btc or crypto in general is hard to calculate due to early investment/not selling a lot of it. i often park shit in tether or some other stablecoin when crypto going down and reload back
when it comes to swing trading 25% gains are my target for quick stuff, higher for holding a month or so (this is straight buy with fiat and then sell later on) that said im used to patterns it follows in general. one can easily make 5% day trading it using the robot on binance or something like that

when it comes to equities great post on missing out on large days. personally i put a fair bit back in the market in late-March. some blue chips some divvy stocks and other sectors that i figured would bounce back strong due to being obviously oversold. i did not pull out in Feb unfortunately, that said ive been building my long-term positions since i started working so i just go long and hold in a boring manner. there are only so many opportunities to buy in when shit tanks to this extreme.

This post was edited by excellence on May 12 2020 04:22pm

You're making a 25% return but does that represent an average? I have to assume that yielding that high of a return comes with the draw backs of high risk and thus there's times eating a loss or you end up in a sit and hold period potentially resulting in less return and a lower risk investment link a S&P 500 ETF.

At the end of the day it will ultimately boil down to your risk appetite though, although average figures of individual picks over time may not be in your favor. Only takes one bankruptcy / fraud allegation to eliminate the higher risk gains you may have been able to accumulate. A great example would be Luckin Coffee, i wonder if anyone in this thread got burned by that one. Another one is pot stocks.

I don't advocate having no play money, i think much like going to a casino allocating a portion be it a % or set dollar amount allows you to engage in things rather than depriving yourself of it and ultimately reduces the chances you're going to do something irrational with a larger % of your net worth. I was curious what % people are playing with.



This post was edited by SBD on May 12 2020 04:46pm

1 - i doubt it and 2 - far more of my funds have gone into long-term index-based and blue chip filled dividend-paying portfolios