2018 Review

2 weeks ago JCprojectfreedom 0

What a year! It is so different from 2017 when everyone is trying to mention on their blogs they have returns of more than 20% beating the indexes. Fast forward to this year, most are complaining about the volatility.

Looking back at my records, at the start of this year, I was holding on to about 20% cash then I start to pump in around January/ February when the market took a small correction.

Lesson 1 – Greed version 1

The first lesson for this year is not to be greedy and forget about portfolio sizing. I sold put on too many Apple (I think I sold 20 AAPL which is about USD 300k) contracts, pocketed USD 9k but end up with lots of nights of disturbed sleep when the market got into turmoil. End up I sold in fear and lost USD 9k. If I have held to the end, it will have been a profitable trade. I could not stomach the loss of sleep. Another lesson – never lose sleep over profit. How do you know you have over leveraged? It is when you are losing sleep. I would wake up at 3 a.m. to check on the market and there were few nights when I was awake from 3 a.m. to 5 a.m. It is not worth it when you are putting your family to this type of undue stress.

Lesson 2 – Greed version 2

As I was not working from January to March, I was thinking of income. I started to shift from growth stocks to dividend stocks. In short, I am chasing after dividend. There is no free lunch in this world. After the companies issued their dividends, the stock prices began to drop non-stop. The way I invest when I have work income is completely different from the way I invest when I have no income. Lesson learnt – do not chase blindly after dividend income and learn not to take actions. Sometimes you just need to take one good shot to hit home run and the rest of the time you do not need to bat at all.

Lesson 3 – Enjoy your fruits of labor

I am very strict when it comes to personal finance because I believe that is the only thing I can control – expenses. Meanwhile, I cannot control my investment outcome or stock prices. I have changed my perspective slightly. I bought a Lindy bag with two Twilly scarves for my wife after losing too much money this year. I think it is better for her to have a physical bag on her shoulder than saving all the money to keep buying stocks which keep depreciating. I think her bag does not depreciate as fast as our portfolio. The money lost can be better spent on my family.

Conclusion for 2018

I have lost my job twice this year and my wife is losing her present role in 2019. I have learnt to be strong and understand what is the most important thing to us. It is not financial freedom, not money but who will stand by you during the darkest moment to lift you up.