I set aside about $20 K last year and put it all into individual stocks...good stocks like Gilead, Apple, Disney, HP, Altria, BABA and a few others. I also bought some biotech penny stocks with good potential. I own about 20-25 stocks total. thing is now im starting to think that it may not be good to have so much in individual stocks; i would say 15% of my total portfolio is individual stocks and i have them in my IRAs and most in my personal investment account. I also have about 35% of my portfolio in cash and a separate money market. Im really waiting on a market crash so i can pump all the free money into the market, but am wondering if i should still keep all my stocks or reduce the load a bit in the event that there is a big crash on the way. Any advice would be appreciated. Im now 40, single and dont plan on retiring until 70. I know this is timing the market but it is inevitable that it will sink again and I want to be ready for it. thanks
M
malaguti
I seem to agree with Tomorton quite often. I would just add though, that you need to define what a market crash is FOR YOU. Your idea and mine (or others) will be different. Now that you can define what that is, decide then what it looks like to you on a chart. Then, and only then should you think about downsizing when this spurious "crash" actually materialises.
But, you also need to apply this same definition to these individual stocks. Get rid of the stocks that are "crashing" immediately but the ones that aren't may remain quite defiant even in the face of the market index. and this is where you might want to lighten your load.
If the index is going down, then chances are it will drag the sectors down with it but shouldn't be a reason to exit all your stocks.
Not everything crashes at the same time, or at the same pace or else relative strength would never have been invented. And never try and guess a top or bottom, which is effectively what you are trying to do
if it turns out a crash does materialise, you were not right you were just plain lucky. and savvy investors do not stick a finger in the air thinking "hmmm i smell a crash is on the way" ergo neither do you because you my friend are now a savvy investor
It’s good to hear from someone with a sensible, patient investment strategy!
Personally, I get out when there’s hype, back in where there’s ‘blood on the streets’. Apple?
Mr. Charts
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Why don't you buy some cheap OTM index puts to hedge your long exposure?
What I sugest is pick a fund or etf that remains stable and place all the money you dont want to risk in it/them. Keep aside a portion that you feel comfortable risking and play with it and develop a system that you feel good about working.
Ive been liking PFF as a safe spot that returns decent dividends to off set any losses while developing my system. And when there are no losses I ether have more to play with or dividend reinvestment.
There are plenty of funds that act in a similar way where they dont really go down or up but funnel cash at you instead. Stocks can be like this as well though they are prey to the markets much more frequently.
Ive been liking PFF as a safe spot that returns decent dividends to off set any losses while developing my system. And when there are no losses I ether have more to play with or dividend reinvestment.
There are plenty of funds that act in a similar way where they dont really go down or up but funnel cash at you instead. Stocks can be like this as well though they are prey to the markets much more frequently.
NVP
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you have 30 years of investing remaining it seems from your profile.........plenty of time to manage rises and falls .......so you do need to run risk in your portfolio
cash is useful to buy cheaply ..........but you cant afford to carry to much if the markets are flying
a few suggestions
hedging (already mentioned)
specialise (using your own research) or forget it and use trackers
reinvesting dividends on good stocks over time
minimise transaction and management costs (don't overtrade)
even on a conservative horizon you have 20 years before you worry about transitioning into more defensive strategies pre-retirement
i'm 55 and a lot of what I am doing is now defensive as I can now take pensions .....that's investing wise .............trading is another matter completely
N
cash is useful to buy cheaply ..........but you cant afford to carry to much if the markets are flying
a few suggestions
hedging (already mentioned)
specialise (using your own research) or forget it and use trackers
reinvesting dividends on good stocks over time
minimise transaction and management costs (don't overtrade)
even on a conservative horizon you have 20 years before you worry about transitioning into more defensive strategies pre-retirement
i'm 55 and a lot of what I am doing is now defensive as I can now take pensions .....that's investing wise .............trading is another matter completely
N
