Ouch!

I just had a look at my stock portfolio and ouch!, something is going on and I don’t like it.

I don’t really follow the financial news anymore – I don’t find it interesting and I think that there’s a lot of pump and dump going on. If anyone is talking about an investment being a good one they probably hoping that you buy what they’re selling. Or it’s mindless chatter from people who are just guessing – like the chat that you get on Bloomberg TV (normally only watched in hotel rooms by bored and tired commercial travellers).

Then there’s the tipsters on Twitter who are at it non-stop. So, I don’t generally listen to or invest in meme-stocks and I’ve paid the price by not investing in Tesla before everyone went mad for it, or BitCoin or GameStop or whatever else there is.

I do however keep an eye on my finances and my portfolio value. Most of the family money is invested in a very exciting ETF called “VWRL” or Vanguard FTSE All-World UCITS ETF USD Dis. It’s the Horlick’s of ETFs, it’s bland and mildly pleasurable on the tongue but is guaranteed to send you to sleep. This ETF just mirrors (more or less) the whole world’s largest companies.

It’s not the only ETF we own but it (and comparable ETFs) make up most of our ISAs, LISAs and SIPPs. And because it’s so large and diversified it moves like a supertanker – slow and steady.

Supertanker Crashes!

Except today when I checked what was going on and it’s down 3% today alone!

VWRL’s death spiral

It actually looks like it peaked at around £92 a share at the end of the year and is now at £84 – around a 9% drop. The combined effect of this drop and other ETFs falling on the Family Finances is pretty catastrophic; my SIPP alone is down around £20,000 from recent peaks.

Yet, I really don’t particularly care, worry or intend to do anything different.

I don’t know if it’s a bad thing to lack the manic depression that others have been showing recently. From reading it appears that the Tech/Crypto bubble may have burst and all that imaginary money is depressing everything. Or it could be about how Russia is preparing to invade Ukraine (I predict on the Winter Olympic starting ceremony – just like they did with Georgia in 2008). Or maybe it’s the growing pains of a post Covid world where inflation is rife and growth is uncertain.

I don’t know and I don’t really care to be honest. I do know that my very boring investments in renewable energy have been performing very solidly and aren’t budging much.

I’m at the point in my life where I don’t need to get over-excited about the world works. These recent falls bring stocks back to where they were a few months ago. Year on year VWRL is up 5.6% + dividends and my pound cost average for VWRL is around £50 a share – so I’m still in profit. Also, we’ve got a diversified basket of assets and a down month for VWRL doesn’t mean the end of the world. With a modest final salary pension, a mortgage with a -4% real interest rate, steady work and also apparently my house is up 15% year on year – I think that we’ll be fine.

When in doubt, zoom out

Passive Investing for the Lazy

Part of the passive investing philosophy is that your money should be invested passively and you should be passive in your decision making – I.E. DON’T CHOP AND CHANGE.

Market timing is a road to ruin as you will be beaten by either super computers, people smarter than you or by the guys who wrote the “research” that you read that told you to invest in this or that company/index/ETF.

So, I think that I’ll sit this market panic out for a while. I do have a bit of money spare but I was planning to invest in paying the HMRC, investing in a few VCTs and spending a bit on the house. Or maybe I should take advantage of the dip to invest a bit of spare money and benefit from the bounce? I don’t know, but I do know that I’ll not be worrying too much about it.

I do think that this current correction will hit many investors hard – those lucky young punks who’ve become very rich from punts on bubble stocks, crypto crack cocaine and have never experienced anything like this before – it might get a lot worse before it gets better but to remove the froth of optimism from growth stocks could mean that we are taking about much greater falls. But all this is idle speculation from an uninformed stranger – best to keep calm and carry on.

Thanks, GFF

6 Comments

  1. The covid crash of March 2020 was my first crash as an investor and I didn’t panic then so I’m not going to now, although it does pain me to see the ‘losses’.
    VWRL is also my single biggest investment and I’ll probably be topping up on pay day.
    Am hoping it stays depressed a while longer so I can pick up some more bargains.

    Liked by 1 person

  2. Same situation as you GFF – 2 weeks or so ago riding high – yesterday – kaboom and associated misgivings. DC pension and ISA still in profit but considerable falls.

    There’s little that can be done apart from holding nerve and continuing to invest where possible.

    At least it means the LTA may not be breached for a little longer – clouds and silver linings and all that.

    Like

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