Who else is enjoying the Stock Market Rollercoaster?
Have you felt it yet? The emotional rollercoaster of the stock market, which has literally been going up and down like a yo-yo the last two months, but especially the last month.
The epic highs from last years massive bull run on the stock market left you feeling euphoric, like you could do no wrong.
Which started to slow down by the end of December, and then it picked up right where 2021 left off, hitting what was an all-time record for the ASX 200 (The index tracking the top 200 companies in Australia).
However, by the end of January, we almost saw a correction, where the market dropped significantly by 7-8%, but you would have thought, here is a buying opportunity, “Buy the Dip mentality.”
You would have thought, it will go back up anyhow…
And it did, actually re-gaining 4-5% and then Russia invaded Ukraine, where we saw another dip of 3-4%, driven by major uncertainty in the global economy.
ASX 200- Jan 4th, 2022 - Mar 24, 2022
The ASX 200 is still down nearly 3% from the start of the calendar year. What a ride!!
My portfolio returns for the Month of March
The returns and losses of my very own stock portfolio over the last month has been a hell of a ride, which left me doubting myself at the start of March.
Just looking at the graph’s above, you can see the volatility and it really does look like a rollercoaster track!
Being invested in the market truly has left you feeling like you have been on a ride, full of adrenaline and then the opposite, feeling down right silly and as if you had made a huge mistake.
Over the last month, some investors would have made some massive decisions, whether to buy, sell or hold…
Which given the current climate, the uncertainty in the world, the greater economy and what the future holds, these decisions have been truly difficult.
But, I for one have been enjoying the experience that is the rollercoaster of the stock market the last month. The choices that have needed to be made over the last month was easy for me, as I hope it was for you.
I found myself buying down more shares within the companies that I own in the massive drop in the market at the start of January.
Since Russia has invaded, I have been sitting pretty, where I got myself a bag of popcorn and have just enjoyed the ride.
Were there doubts? Of course there was, especially when my portfolio was showing losses of 15%…
However, what stopped me from selling down and jumping over to the smoother ride that would be the carousel (ie; cash or bonds), was the knowledge of history on the stock market and also knowing the Fundamentals of the businesses I had invested in!!
The stock market, over the course of 200 years, has seen more gains than any other asset!
Knowing this, it is an easy decision, because over the long term, the assets that are held will see returns. The other factor, whereby I know the underlying fundamentals of the business, has left me feeling safe and secure at night.
I have invested in companies that have a huge cash reserve, low debt and are profitable over the last two financial years. Not to mention, their Return on Equity (the return a company has on the equity they use to invest back into the company), has been holding strong at 8-21% over the last ten years.
Meaning, they are very unlikely to go bankrupt, and that management is good enough to ride the waves of war, inflation and much more.
Will some companies be a loss?
Sure, but that will be offset by the gains that other companies will be making over the next 5-20 years!
Which is why I for one have been revelling in the rollercoaster that is the stock market over the last three months.
And I hope you have too.
Ps.
Investing in the stock market is not for everyone and truly depends on your risk tolerance, as well as many other factors regarding your life. If you are thinking about investing in the market, please find a trusted and professional Financial Advisor who can help you navigate the mind-field that is the Financial Markets!
The pure fact of the matter is, it is about learning to control your emotions and figure out who you are as a person.
Until next time,
Take Back Control
