Disclaimer: I won this round. I’m still not sure of the balance between skill and luck, I favour luck. I’m not sure I could do it again, so don’t extrapolate…
Monevator has a lovely little summary of advice for people who opened a share account during lockdown. The recommendation is go invest passively, but that’s dull as ditchwater. Everyone sees themselves as the Wolf of Wall Street
You opened your new trading account for excitement, not something that’s just as dull to do as it sounds – even if it is more profitable.
The markets had a near-death experience earlier this year. Passive investors had an easy life. Do Not Sell
We only have to do one thing.
Do not sell.
DO NOT SELL.
DO NOT FUCKING SELL.
If you’re going to sell into a market suckout, do it, do it decisively in the shortest time possible, and if at all possible do it early. Well, I got two out of the three right. A bit before then I also started to short a lot of what I had1 . In a couple of cases I shorted more of the stock than I had in the ISA.
I had been chasing income into the ageing bull market, so I ended up with more FTSE100 and investment trusts than I should really have had. And then I sold into a low, though nowhere near the true low-water mark. I did not sell VWRL, gold, or my HYP from way back when. I didn’t sell any of my index holdings in Charles Stanley, and indeed pumped LGITI up. Among what I saw as crap I sold BWRM which was a mistake in hindsight. You don’t have to hit zero bum notes, just more high ones than bum ones.
I bought a shedload of gold to add to my existing stash bought before the Brexit vote in 2016, and a few shares, and some VWRL. I was selective about what I sold – mainly UK based stuff and also income investment trusts, though only the excess I had bought in 2019, I have a core holding of ITs that I have had for years. At least TI seems to approve of the selectivity, just about.
9. Invest for the long-term: run your winners, and cut losers
though he doesn’t actually say short the losers…
So I am one of those suckers that passive aficionados take the piss out of, I got slaughtered in the bear market, when stocks return to their rightful owners, yes?
Not so fast, passivistas
You’ve had a good war. You did not sell, and you are now sitting on a tidy profit. All around you the smoke is rising from people’s business hopes and dreams, but you stayed passive, and you did not F*ing sell, you kept the faith, and you are up on the year? I don’t want to take that away, well done you.
I did F*king sell. Investing FAIL. Had I done n’owt I would probably be back where I was in Jan at a guess. Oddly enough when I look at my ISA now compared to January it’s not epic fail, but still FAIL. Advantage passive.
Oranges are not the only fruit
Not so flipping fast. I was way too heavy in shares, which arguably is not where I should have been. As Monevator reflected in his comment that I pinched the title of at some point during this bear market I realized that I probably shouldn’t keep doing this I was over-exposed2 to equities at a market high, and I didn’t want to really be so highly exposed. I’ve been grousing about valuations for long enough on here.