I read this in a Morningstar publication: If you feel the losses suffered by your portfolio are too much to handle, you are probably taking on too much risk.
Or as I tell folk: If you are concerned that you may need the money you are investing in the market, don't! Only invest what you can afford to lose.
If you have followed those two pieces of advice, you will come through the present market turmoil just fine.
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In the spirit of the above intro, over the past year I have been cashing out some investments. I have a plan, a portfolio allocation, and I was holding more of some stocks than originally planned. I sold the excess. I deposited the resulting cash in a daily interest money market account (TDB8150).
I am watching the crashing stock values with a small war chest of investment cash and a new portfolio allocation model. I am tracking the crashing stocks using a spread sheet. When the spread sheet indicates my cash will cover my dream purchases, I will buy in. Of course, it is possible the market will not dip that low and I will be left holding cash. I can live with that.
And what stocks am I watching?
- BAM.A (Brookfield Asset Management Inc.)
- QBR.B (Quebecor Inc.)
- QSR (Restaurant Brands International Inc.)
- RIF (CI Canadian REIT ETF)
- VGH (U.S. Dividend Appreciation Index ETF (CAD-hedged))
- VIDY (Vanguard FTSE Developed ex NA High Dividend)
Note: My list will not be the same as your list. For instance, there are no banks on my wish list. Why? I am fully exposed to the banking sector. The same goes for pipelines, telecoms and utilities.
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