2022 Market Sentiment & Positioning

[3dfxplayer]

I am not flaunting my networth, just telling you the practical constraints of a large portfolio. So please answer my question, how do you go in and out or put hedges around a million dollar portfolio and what is the impact of slippages, transaction costs and getting it plain wrong 50% of the time on average?

If you make a statement, you need to back it up with numbers and actual details. You havent done that and Iam actually the one who is providing you all the details. So the onus is on you to prove me wrong by providing details of how you actually do it at your entire networth level.

I know the math, but it is not actionable according to me. You could do your hedges completely wrong and instead of being 10% down and then participating in the 11% upmove, you could time your hedges wrong and end up being permanently down by 5%.

1m is not a large portfolio and you guys are arguing over nothing. Churnmaster has a different objective from yours, he is trading while you are running a long term portfolio. A low double digit annual return is not really very difficult for a skillful trader who is willing to put time and effort into it, but its a lot to expect for the average investor who dont know much about trading or risk management and is just buying and holding for retirement. There's nothing wrong with either approach.

 

[sohguanh]

YTD down 13.4%. Is this how 2008 people feel?

Yes also 1998,2000 etc. If you make it through the current 2022 you would be a veteran. But at different stage of your life your priorities may shift like you get married got kids etc which may slow down or even stop your investment DCA depending

 

[revhappy]

Buying today as well. Actually yesterday want to buy since my pay come in. I just realized the usd been strengthening alot this past 1 month.

Got alot to shift around this month. Shifting 5x of my salary and my parents money to SSB for this month.

YTD down 13.4%. Is this how 2008 people feel?

2008 from peak to bottom was much worse. Right now it is like a slow poisoning, so there is no panic. If there is sudden 30% fall in a month, then panic will set in like in 2020 Mar.

In Bogleheads most investors have lost 10%+ year to date, but they are not panicking either.

 

[zzTiny]

2008 from peak to bottom was much worse. Right now it is like a slow poisoning, so there is no panic. If there is sudden 30% fall in a month, then panic will set in like in 2020 Mar.

In Bogleheads most investors have lost 10%+ year to date, but they are not panicking either.

no leh. The subprime crisis didn't just happen in a flash. Is just like right now, slow poisoning from 2007-2009.

 

[kickass22]

Buying today as well. Actually yesterday want to buy since my pay come in. I just realized the usd been strengthening alot this past 1 month.

Got alot to shift around this month. Shifting 5x of my salary and my parents money to SSB for this month.

YTD down 13.4%. Is this how 2008 people feel?

Actually, 2008 was worse (for me at least). My portfolio was down 40% if I recall. The STI index went to 1.5? , something like that. The saving grace was that I was single and still had a secure job. I took every paycheck and whatever money I had then which was pitifully low and put it in the stock market while every fiber in my body was saying "NO!" with fear. I just forced myself to invest, telling that I can still recover as I was single and had a job.

Everywhere you read, it was negative news and fear and it cause so much fear.

That was the beginning of my investing journey.

 

[revhappy]

Here is an interesting Bogleheads thread about 100% equity allocation:

https://www.bogleheads.org/forum/viewtopic.php?t=305442&start=250
These people have balls

How can you not be 100% if you are in the accumulation phase. Automatic stock contributions are the safety net - not bonds. Not sure why this concept is not more widely practiced on this forum.

Market drops 30% over 8 months. Doesn't matter if you are automatically investing 2% of your portfolio a month. You are just getting stocks at a discount.

Market drops 40% over 2 years. Just a bigger discount for a longer time.

50% over 3 years. Even better.

 

[kickass22]

Here is an interesting Bogleheads thread about 100% equity allocation:

https://www.bogleheads.org/forum/viewtopic.php?t=305442&start=250
These people have balls

This is my current mentality, but I also am thinking about what Morgan Housel said in his book about logic and reality based on human psychology. You need to consider both, especially when you have dependents.

So when you invest, you are not trading or investing, you are executing a strategic wealth management plan.

Not an activity but an execution of a plan. Anyway, that is what I tell myself.....

 

[limster]

YTD down 13.4%. Is this how 2008 people feel?

No need to go back all the way to 2008 (though I was here in MM/SSI in 2008 but didn't post that much, was more active in sgfunds.com forum).

In 2020 my IBKR portfolio went down more than 33%. i.e. one third of my portfolio disappeared in 1 month March-Apr 2022. You can read my reaction and my feelings in the "2020 market sentiment thread" If I recall correctly, my reaction was "This is the sale that I have been waiting 10 years for!"

By Jan 2021, it already recovered which is why the TWR number is +2.49%.


Anyway, for those who are interested this is one of the Epic 2008 crash threads... can check how many foummers in 2008 still here?

https://forums.hardwarezone.com.sg/threads/signs-of-bottoming-out-whats-ur-view.2211839/

 

[d5dude]

Buying today as well. Actually yesterday want to buy since my pay come in. I just realized the usd been strengthening alot this past 1 month.

Got alot to shift around this month. Shifting 5x of my salary and my parents money to SSB for this month.

YTD down 13.4%. Is this how 2008 people feel?

Stocks fell 50% in 2008, this is nothing like that.

Average intra year drawdown of SP500 is 16%, this means that on average it will drop 16% (but not necessarily close -16%) in a year, if you cannot stomach this volatility then stocks are not for you, 11% CAGR is not easy to make...

I just did my bi-annual rebalancing today, bought CSPX, VGER and some VJPN and EIMI. Its one of the few times I generated any sort of alpha with rebalancing, probably because I sold some stocks in early Dec.

 

[zzTiny]

Stocks fell 50% in 2008, this is nothing like that.

Average intra year drawdown of SP500 is 16%, this means that on average it will drop 16% (but not necessarily close -16%) in a year, if you cannot stomach this volatility then stocks are not for you, 11% CAGR is not easy to make...

I just did my bi-annual rebalancing today, bought CSPX, VGER and some VJPN and EIMI. Its one of the few times I generated any sort of alpha with rebalancing, probably because I sold some stocks in early Dec.

like I said...

slow poisoning. stock don't fell immediately 50% in 2008. It was a slow poison from 2007-2009. Is only 5 month currently...

So I am asking people, how they feel every month, it drop n drop n drop. As for me, I will continue to tong through, no need to say not for me or what.

 

[d5dude]

like I said...

slow poisoning. stock don't fell immediately 50% in 2008. It was a slow poison from 2007-2009. Is only 5 month currently...

So I am asking people, how they feel every month, it drop n drop n drop. As for me, I will continue to tong through, no need to say not for me or what.

I'd just buy more if it drops that much, always keep dry powder in the form of a 60/40, 70/30 or whatever portfolio. Unless you are only 20 years old I would not recommend putting all your money in stocks, no matter how safe you think those stocks are.

 

[yumsang]

like I said...

slow poisoning. stock don't fell immediately 50% in 2008. It was a slow poison from 2007-2009. Is only 5 month currently...

So I am asking people, how they feel every month, it drop n drop n drop. As for me, I will continue to tong through, no need to say not for me or what.

yes, dong through, what else can retail investor do. buy the dip with spare cash.... like DBS at $18.
those who said they use dont know what put lah call lah to break even this and that .... ownself believe ownself nia., 99% bagholding ... but when market recover remember to sell.

 

[limster]

yes, dong through, what else can retail investor do. buy the dip with spare cash.... like DBS at $18.

those that say they will buy DBS at $18, when the target price is reached, do they actually buy?


2020 I bought DBS at $21.21 and $23 - I shared my buying price:

https://forums.hardwarezone.com.sg/...nd-positioning.6183736/page-52#post-125608545
https://forums.hardwarezone.com.sg/...nd-positioning.6183736/page-36#post-125505881

 

[apriliasiao]

Actually, 2008 was worse (for me at least). My portfolio was down 40% if I recall. The STI index went to 1.5? , something like that. The saving grace was that I was single and still had a secure job. I took every paycheck and whatever money I had then which was pitifully low and put it in the stock market while every fiber in my body was saying "NO!" with fear. I just forced myself to invest, telling that I can still recover as I was single and had a job.

Everywhere you read, it was negative news and fear and it cause so much fear.

That was the beginning of my investing journey.

Wow congrat u of overcoming the basic fundamental mistake of investors during a crash is to sell sell sell. Now is huat huat huat all the way.

 

[homer123]

Buying today as well. Actually yesterday want to buy since my pay come in. I just realized the usd been strengthening alot this past 1 month.

Got alot to shift around this month. Shifting 5x of my salary and my parents money to SSB for this month.

YTD down 13.4%. Is this how 2008 people feel?

Current situation pale in comparison to 2008 or 2020. Those 2 years , crashes were broadbased affecting almost every sectors. At least , right now mainly US growth/ tech and China Tech stocks are affected. I have very little of those stocks , so I still manage to eke out a small ytd gain of 0.31% after including dividend. In 2008 or 2020, losing >30% of one capital is common and dividend was also cut drastically.

 

[3dfxplayer]

https://www.cnbc.com/2022/05/03/pau...nvironment-for-stocks-or-bonds-right-now.html
Even PTJ is ultra bearish on the market. We are due for a violent snap back if the fed doesn't meet market expectations on rate hikes, it wont be easy for the fed though, both quit rate and job openings are currently sitting at record highs, the labour market is very very tight, businesses simply cannot get workers right now.

 

[stanlawj]

.., just telling you the practical constraints of a large portfolio. So please answer my question, how do you go in and out or put hedges around a million dollar portfolio and what is the impact of slippages, transaction costs and getting it plain wrong 50% of the time on average?
...

Problems with size of portfolio is relative to the market that you are participating. For example, Tesla, Exxon stock can absorb USD500k buy or sell in one order without moving the price.

On the other hand, there are micro-caps stocks that can only absorb USD10k per order.
I think you haven't tried to trade USD500k per order. There's also algorithmic smart orders available to scale in or out the order too. I've exceeded USD100k per order before. So I don't see $1million portfolio as large enough to be any constraint.

I think >$10million per order is where the problem starts. The universe of available instruments to trade start to shrink dramatically. This is Warren Buffett's problem with billion dollar portfolio.

 

[limster]

Last night when it was red I bought VWRD/LSPU and broke my resolution not to stock pick by buying more Santander (I have a weakness for cheap Euro banks with good dividends- and aren't higher interest rates supposed to be better for banks? ).

Today wake up and check, markets green. If today green again I think I my returns will go back to positive for 2022

 

[limster]

Down again.... market getting interesting. will stick to ETFs but at a certain point when I have high conviction that individual stocks are cheap, I'm buying stocks as well.

 

[revhappy]

Down again.... market getting interesting. will stick to ETFs but at a certain point when I have high conviction that individual stocks are cheap, I'm buying stocks as well.

I am now in a payday to payday mode in terms of deployment to market. I already crossed 60% allocation mark, dont want to move any of my fixed income funds to equities anymore. But any new savings I treat as bonus and will allocate it straight away to equities. Until then, just watch the fun with popcorn. Although my portfolio bleeds, I have kind of become numb now.