This morning, the ASX index opened down around 6% and at the time of writing my portfolio is down almost 8%. It surely feels terrible, and like everyone else I can feel the panic in the air.
With any luck, we also have a bit of dry powder ready to start nibbling.
And so, I wanted to give you a quick update of what I’m doing today. I am buying high-quality stocks that I already liked at higher prices than today. While I have sold a couple of lower conviction positions that are NOT official recommendations, I have been buying official recommendations. Importantly, it is better if I don’t mention any stocks by name, because I am actually active buying things.
Of course, I have no idea when the markets will bottom. You already know what my long-term theory is, but it could be wrong.
But according to the theory I have outlined, I do need to get long at some point. I wouldn’t want to do it all at once, and of course, when markets are panicking, I don’t actually want to buy any stocks. However, it is when that soup of panic exists that I generally try to force myself to gradually deploy capital. Of course, I have only been nibbling but that’s because I essentially want to dollar cost average my way into stocks over a period of time when stocks are weak.
Therefore, although I anticipate to be deploying capital on a panic day, it is mostly based on the sociological theory that you want to buy when others are panicking. In any event, I definitely think that the time to “panic early” is long gone, like weeks ago, and so now I am taking more of a what I consider to be a “very cautious buying” approach.
And remember, the most important thing is to make decisions calmly, whatever you do. Don’t give into the panic. All the time you spent reading and thinking about investing was your training, and you trained for this!
The information contained in this report is not intended as and shall not be understood or construed as personal financial product advice. You should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement. Nothing in this report should be understood as a solicitation or recommendation to buy or sell any financial products. A Rich Life does not warrant or represent that the information, opinions or conclusions contained in this report are accurate, reliable, complete or current. Future results may materially vary from such opinions, forecasts, projections or forward looking statements. You should be aware that any references to past performance does not indicate or guarantee future performance.