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Inzkeeper

 
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  • What If My Stocks Crash And Burn? Part 2 [View article]
    Hi Hilo,
    I feel just a little silly that I did not even to think of comparing my portfolio to the S&P. I was really only trying to compare it to the 50% in the question. However, if the SPY had a line on my chart it would have fallen 45% (compared to my 34%).

    In general, I do not compare my results to the S&P, I really don't care what it does or if I do better or worse than it. This may really not be the place to confess that I'm really not "seeking alpha" at all. (oops) I'm seeking financial freedom for retirement and beyond (maybe even for generations). The only important benchmark for me is the targets that will get me there.

    Beta is something that I am concerned about. That sounds just a bit contradictory as both are comparing to the market, but the purpose of the comparison is different. I'm not comparing for the purpose of judging over/underperformance, but for the purpose of managing risk. The companies I more recently ditched, WU & AGU have a beta of 1.45 & 1.28 respectively.

    I love that your portfolio has more 'up' on the up days and less 'down' on the down days. It REALLY does not get better than that. Just brilliant. (also sounds like too much tracking and calculation for me at this time of year)

    I'm hoping for a delightful little slightly-scary-not-too... market panic myself.

    BTW, HiloBeMagical, I smile at your username every time. It truly is.
    Faye
    Apr 11 02:33 PM | 3 Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    You are very right Craig, this article lacks metrics and they are extremely important. My articles and comments tend to be much longer than the average as it is and I try to stay directly on topic. Since the question was how I would react to a 50% correction, the purpose of the first half of the article was to evaluate the likelihood of a panic (emotive) sell. I wanted to bring in a discussion of beta as well, but also left it out. A ratings column added to the chart could have been very helpful. Thank you very much for the other suggestions, I will implement them.
    Apr 11 02:01 PM | 3 Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Cal's suggested strategy is similar to my trading strategy. I protected the downside and wasn't greedy with upside. I'm now a dividend-growth investor not a trader.
    Apr 11 01:49 PM | 1 Like Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Yes, definitely.
    And another of my favorites from Craigs outstanding comment is,
    "My perspective is that the stability of the dividend income and the ability to increase it is paramount. One does not want a big drop in dividend income and a big drop in price. Selling "seed corn" to live on at rock bottom prices would be very painful"
    Apr 11 01:46 PM | 3 Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Hi Ron,
    Throw up a bio and jump on in. I fully expect that just a little summer weakness will take many of my holdings below their current ACB (or purchase price) and I am ready to buy more, averaging down. Yes, it is hard to take advantage of opportunities without cash on hand. I have the most I've ever had sitting around ready to go. Chances are good that I won't be patient enough for the bottom, but I don't need to get the 'best' price as an investor. It was important as a trader.
    Apr 11 10:34 AM | 1 Like Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Devlin, I agree that it was a good exercise. I implied, but never stated in the article that with this portfolio showing a 34% loss, compared to the 50% thrown at me in the question, that my current portfolio looks like it will hold up substantially better. I could move to an even more 'risk off' portfolio, but I don't see the need. I do see the need for further diversification and better allocation, however I have actually moved from 34 companies to 27 over the past 6 months as I take off trades and focus one what I really want and try to effectively evaluate and do due diligence. Getting to know them better as it were.

    GE Smith wrote in a comment to Part 1 "Inz, re the tension between concentration and diversification, I think individual equities are like our friends - the more time we spend with them, the more we begin to see who we want to spend more time with. In my own portfolios i don't currently have a position over 5%, but over time I'm adding more selectively as I've got to know them better and I can see concentrated positions starting to emerge."

    I also take comfort in the fact that when we suffered dramatic losses, I wasn't the one calling the advisor up and telling him to sell. He, without our knowledge, moved everything to cash and his office closed. Even though I live in the city, there are personal connections and I know of him and his family. Oh well. When we went to move our money to our new advisor, who also was a friend and knew how carefully I managed the household finance, she suggested that instead of using her as an advisor, I consider managing myself and offered suggestions and assistance. We figured there was very little left to lose, and that if, after a year, I wanted to quit, we could transfer the funds to her anyway. That started this amazing journey and I'm so thankful. We have gone from typical unaware family with modest savings spoon fed MPV over the years, to the possibility of being financially independent for generations. I'm so glad we had the opportunity to start from scratch - it just would have been nice if I had starting with an nest egg instead of a pea! ;)

    I'm out on the limb with you! The chances of 90% for me are infinitesimal.
    Apr 11 10:28 AM | 1 Like Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Tennis Boy, please tell me more. I am very interested. Why do you think BCE makes a good leading indicator?
    Apr 11 09:59 AM | 1 Like Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    "Wal Mart went up, not down."
    According to Google Finance, the closing price Sept 19th, 2008 was $59.70. The closing price on Mar 6, 2009 shows as 48.91. It didn't stay down long though.
    Apr 10 07:16 PM | Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 1 [View article]
    Sorry, GE, my answer to your question ended up above in the comment stream.
    Apr 10 05:27 PM | Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 1 [View article]
    Dale, can you please be more specific with the question? I think this is all about my risk tolerance level and hopefully getting others to look at theirs now, while the sky is blue.
    Apr 10 05:25 PM | Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Sounds like good advice to me too, Charles. When I was trading I would only risk 1% of my portfolio on each trade. Now that it has doubled more than once since, I want to risk only .5% on any trade. That is a completely different strategy than for the ones I consider 'hold forever' stocks like JNJ & MCD, though.
    Apr 10 05:18 PM | Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Eddie, that's another impressive set of 2 cents'. You should write Part 3 (or maybe you just did).

    I was joking that I need to run out and buy more of those exact stocks for that exact reason. However, the point does hold. There is a type of company that will hold up under more pressure than others. For example, Enbridge and Inter Pipeline are both pipelines. Their 'toll bridge' nature does well in most market conditions. Enbridge is a much larger company more widely held, especially institutionally, and to me that would explain the majority of the almost double (but still small comparatively) loss in IPL. I don't think either company was in trouble at the time. I could say the same about H&R REIT vs RioCan. This is one of the reasons I have been targeting biggest and best for purchase. Not that I won't hold the others too, just that there is safety in choosing best of breed.

    "This should lead to asking why am I holding these particular companies. The point being that analyzing your portfolio in this way can helpful in deciding if you need to position it such that the recession resistant companies are more sizable positions than the others."

    Thank you, that's the point I've been trying to make and you state it so well. I have been looking at exactly this and not only trimming, but completely eliminating from my portfolio the holdings (like WU and AGU) that I expect will not do well in a correction. Ford was initially bought for a trade back when I was trading, but as I continued to watch and research it, it became a longer term hold as I began to believe in the future success of the company. I do not see this as a buy and hold forever name like MCD, but I don't think the auto industry is about to have issues in the near term, and their 'refresh rate' is still pretty high. It's something I watch closely.

    Thank you for your comments Eddie. They are valuable for not just me, but all enjoying the comment stream.
    Faye
    Apr 10 05:11 PM | 1 Like Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 2 [View article]
    Great website calculator, Balanced, I'm afraid I did it all the hard way. Looked up each price for each stock on Google Finance, plugged it into a spreadsheet and then typed it all out again here. I kept thinking there had to be an easier way. It's not quite the same information I was seeking, but it's an interesting snapshot and easy to vary the time frame. Thanks for sharing it.
    Apr 10 04:47 PM | Likes Like |Link to Comment
  • April Showers Bring... Dividend Growth, Joy And Fun! [View article]
    I completely love this train of thought. My portfolio is not handing out Franklins on a daily basis yet, but at least there is such a thing as a free lunch!
    Faye
    Apr 10 10:24 AM | 3 Likes Like |Link to Comment
  • What If My Stocks Crash And Burn? Part 1 [View article]
    Hi GE, I have a history of currency biting very hard. We moved to the states (and took all assets) in 1998 at 63c and unexpectedly moved back in 2002 at 91c. Ouch. Turns out that Canadians with clean records, solid references and a letter from a Senator explaining why it is important for the government to have this employee here, is less welcome than illegal aliens. We were denied visas. But such is life. It's great to be back home in the best country in the world...even if it is cold. :)

    Currency is not my strong suit. The two things I am currently doing in regards to currency are.
    1. holding all US holdings in RSP, no reporting of foreign assets, no withholding tax.
    2. I was buying as many US holdings since last fall as I could while the dollar was at par and falling. I have a 'wash' account set up so that if I sell any of my US holdings, the cash remains in a USD money market account. Sadly, the cash dividends are exchanged. IMO, anything around the 10% or less is still a good time to buy USD. Our gov't is not shy about stating that they want, for trade purposes, the dollar NOT to be even. I expect par to be a unusual event. I would like to see half US and half CAD holdings in my portfolio and it is about like that now. Generally my international exposure is through the US holdings. Keep in mind that I don't need the income for 20 years. What do you think the exchange will be in 20 years? I have no clue, but probably less than par, so my purchases now are fine. If the dollar drops when I retire, I will have more income, but it will cost more to go somewhere warm so it doesn't make much difference. If the dollar is high, we will, hopefully, spend more time somewhere warm.
    Apr 10 10:11 AM | 1 Like Like |Link to Comment
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