There is a reason why I track my stock portfolio performance.
Occasionally I would look at the percentage profit and loss of each stock.
I was reminded of the carnage in the Singapore stock market recently which saw the index fell from almost 3500 (April 2015) to almost 2600 (Jan 2016) – an almost 25% drop from the top.
And I was holding all my stocks all along (butt naked). In fact, I actually increased my holdings from Jan 2016 to Aug 2016. I tend to buy more when my portfolio looks like a murder scene (lots of red).
“I’m always fully invested. It’s a great feeling to be caught with your pants up.” Peter Lynch
In retrospect, at one time in April 2015, my overall portfolio shows an unrealised profit of almost 9%. This swiftly transformed into -11% in Feb 2016. So overall it was an almost 20% decline.
So back to why I look at the percentage profit and loss of each stock in my portfolio. Of course, I like it when there are profits and when the overall value of my portfolio increases. However, I am still many years away from the end of my ‘investing life’.
I understand that markets do fluctuate, but values don’t. Value do change but at a much much slower pace (as compared to stock price fluctuations). The fundamentals and performance of a company take years to change (unless there is a seismic shift in their business process).
I typically just track the earnings performance of the company which I have invested in, and would only take notice if there is a drastic change (for the worse) in their earnings reports.
I may be susceptible to anchoring bias as I always like to buy at a lower price from which I have initially bought. This is probably the main reason why I look at my portfolio – to see if there are bargains to be found in the stocks which I have invested in.
If this is a game, the winner is the one with the lowest average price (provided the fundamentals of the company did not deteriorate). And I think I would be playing this ‘game’ for many years or decades to come. Unless the property market crashes big time, and I find value in the properties I am eyeing for (I might shift my cash from stocks to property).
At this moment I do not find value in most of the stocks I am interested in…. While I do like the fact that some of the stocks have significant unrealized gains, I am scratching my head as to where to invest. Frankly, the market does not care what I think or feel, and I can neither force or change the market. Consequently, I did not really invest in stocks / P2P loans or Invoice financing recently. Neither do I think it is a good time to invest in properties as well.
Well, I have at this moment focused my attention to channeling my resources to increasing my war-chest. Hope I can achieve a 6 figure war-chest by the time the next market crash comes.
These days on weekends I spend more time with my son- Playing badminton, flying kites, playing lego, playing cards, going to the library, or just watching TV together.
Opportunities will come.