Money Mongoose


The last few weeks have been exhausting. Work projects have multiplied and gone into overdrive, and at the same time, the baby has regressed his sleeping to waking up every 1-3 hours leaving everyone tired and grumpy.

In the background, my stock portfolio has tanked further. I have mostly been ignoring it due to personal exhaustion but also the exhaustion of my funds: there is no spare money to take advantage of any dip.

The more I think of stock market investing, the more parallels I see with no limit hold’em poker. In this case, I had planned to change my asset allocation to increase the cash component (which is technically negative). However, I did not manage to do this before the recent stock market crash. As in poker, making a bad decision early in the hand leads to difficult decisions later on in the hand.

In my case, I can either push through with the asset allocation change which would mean selling at the current market lows – which is unattractive – or waiting out for a better time to re-balance and committing the sin of trying to time the market and sitting with a sub-optimal asset allocation for longer.

For now, my default position is to do nothing and then start re-balancing next year when income starts to roll in again by putting half the income into investments and half to cash and then re-balancing this way gradually over several years.


6 responses to “Drained”

  1. Wice says:

    Stocks are a long game mate – are you expecting things to be up in a few months or are you prepared to wait for 20 years? Sure, buy on the dips when you can but it’s important to quickly forget a missed opportunity. There will be many…. Trust me.

    • Phil says:

      As quite an impatient sort, I’m prepared to wait maybe 10 years, but 20 is a bit much! Hopefully, we don’t have the equivalent of Japan’s lost decade(s).

      Totally agree with you on there being more opportunities ahead. I’m sure prices of many stocks will be lower in 3 months than today. Thanks for your comment!

  2. Mark says:

    Don’t feel so bad, that’s the market. If you can hang in there it will come back, probably sooner than you think!

    As mentioned in earlier comments, it’s a good idea to add some non-correlated assets to your portfolio. I’ve never seen a drawdown more than 15% in the last 20 years (including the crash). Take a look here

    Enjoying reading your blog, thanks for posting!

    Keep up the good work and keep you chin up πŸ™‚



    • Phil says:

      Thanks for the kind words! I do have some non-correlated assets. I have real estate investments and also started to diversify into some speculative commodities (only a small amount now, but planning to bring it up to maybe up to 1% of my portfolio). Thanks for the kind words. Seeing a couple of comments on my rather small blog did cheer me up somewhat! πŸ™‚

  3. I think you should keep your eyes on your long term goals. What do you want to achieve with this money. Isn’t your proposed change in asset allocation secretely a form of market timing, just executed too late?

    I would not rush into decisions right now. Rather, draw up a plan to rebalance the portfolio at set times, say every quarter. And what are you going to do with just cash? Will it sit there waiting for more opportunities to buy low?

    • Phil says:

      Thanks for the reply. I completely agree about not rushing. Too drained to think straight. Christmas will be an opportunity to clear my head and plan for the years ahead.

      Regarding the cash component. I was really thinking of switching from 100% stock to a mix of stock and bonds. However, for me, bonds are still not an attractive investment and so I thought cash would make a reasonable stand-in for bonds.

      I was also thinking about this a few days ago and wonder whether I would be happy to have the cash component high enough to really make any significant difference?

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