Seven winners this past week ! Out of these, 3 were opened and closed in the same week and the rest I owned since earlier in 2020.
The top 3 winners where $CSX with a 10% gain in 5 days, $VIAV with a 5.01% gain in 2 weeks and $RR.L with a 4.90% gain in one day. While the future remains uncertain for Rolls Royce, I will look for opportunities to go back into CSX Transportation in the near future; also we still hold a 2% position on Viavi Solutions.
This week we have also gone back into Coca Cola (ticker: $KO ) which is a long term investment. The stock has dropped a lot and seems to have now stabilised with a potential breakout in sight. The dividend yield is 3.6% at these valuations and the stock goes ex-dividend early in June.
Aroundtown (ticker: $AT1.DE ) has been badly hit during this corona virus crisis, just like most of the real estate companies. We have previously invested in $AT1.DE and made a decent profit out of it. As the sector stabilises, it seems a good moment to go back in as it offers capital appreciation potential and sports a 5.2% dividend.
Just as the sentiment was turning on Thursday, I added to my $SQQQ position which played out really well as a hedge: the US markets were down between 2.5 and 3.2% on Friday, whereas my eToro portfolio was only down 0.39%. This highlights the importance of having hedges in times of volatility as the market can quickly change its course.
At this time, I am 58% in cash and have 5% in hedges (inverse ETF): if you don’t have enough cash, you won’t be able to take advantage of bargain stocks that will come your way in the future.
If you want to find out about all the positions in my eToro portfolio follow this link.
Has volatility peaked ? Difficult to say, what’s certain is that over the past 4 weeks the US markets have wiped out all the gains of the last 3 years, basically since Trump’s presidency started. Some say that coronavirus has only been the trigger of the neutralisation of a rally on steroids caused by liquidity injection and tax breaks, ie not of true #earnings growth. While more #liquidity is coming, it would appear that monetary policy alone is not going to be a sufficient cure for the market and that fiscal policy is also needed as well as an effective way to put an end to this biological crisis.
Intro over. So what can investors do in these difficult times ? Last week we talked about raising cash and inverse funds. The situation has not changed as volatility remains high although it has decreased from about 80 to about 60 this past week.
In the meantime, it helps looking at what the new earnings are saying. $ACN for example, a company on my watchlist, has beat expectations early this week but halved their revenue forecast. This company traditionally releases earning much earlier than most S&P companies, which are not due for a few more weeks.
Another interesting observation. The Norwegian krona has tanked and lost about 20% compared to the Euro in the past 20 days: that is a massive drop for a currency of a country with AAA rating ! #Norway has been seriously hit by the virus, is not part of the EU which prevents them from accessing the benefits of QE and is heavily reliant on $OIL which is down >50% over the past month. Not looking good for Norway, but is their currency a possible future investment opportunity when the situation stabilises ?
This week 3 of our long positions have hit the stop loss limit, namely $SYF, $RR.L and $OXY . It is very important not to let your losses run beyond 7 to 20%, depending on your risk profile and whether they are dividend payers or not, so it is advisable to insert suitable stop losses, thankfully this is function that works well on many trading platforms. I continue to watch $SYF closely as I think there will be a great buying opportunity in the not too distant future, whereas I think $RR.L will be under prolonged pressure due to their reliance from the aviation industry and $OXY won’t recover until $OIL rebounds unless they are taken over.
As always, be patient and invest responsibly !
Happy weekend to all.
As long as you have assets to invest, the answer is: “immediately !”
When it comes to investing, there are three key factors, as I see it:
- Only invest what you can afford;
- Give yourself a method to invest;
- Follow that method or, in other words, be disciplined.
More on these factors in due course..
It is very important to realize that if you are after short-term gains, you will probably be disappointed by the actual returns of your investments, where they are governed by self-made strategies or they follow professional advice. I always like to consider investing my assets as a long term exercise: rather than worrying about the next 10, 100 or 1.000 days, I think about the next 10.000 days, which is about a 30-year time span.
One of the most powerful advantages of being a long-term investor is the effect of compounding , something that we will talk about more in detail soon: the longer you reap the benefits of your investments and re-invest them in a strategic as well as disciplined way, the more compounding amplifies your total returns. Precisely for this reason, there is no advantage in deferring the investment of your assets.
Now that we have talked about why, how and when to invest, I look forward to my next post in which I will provide some advice on some of options out there for investing your cash.
There are several ways to invest responsibly but first we have to define what it is that we are investing. You are probably thinking of your savings, which is obviously correct, but there are other assets to invest besides cash. Let´s go through some of them.
If you own a property, its value will fluctuate over the years. While it is common and generally sensible to own the house you live in, if you can afford buying one that is, it may some time make more sense not to own and to rent instead, as the capital that you would otherwise lock in the property may be put to work in other assets, whether they be stocks, bonds, and so on, and generate a greater return compared to the capital appreciation, if any, of that property.
I find that people I meet often don´t think about it but their time is also a valuable asset. Why would someone otherwise decide to stop working for a period of time to pay for and spend a lot of months to do an MBA instead of working ? Most of them are investing their time, and tuition fee, in the hope of earning a higher salary upon completion of their MBA. Similarly one may decide to purchase some holidays from their employer to invest their time in another more valuable activity..
In this blog we will look at several examples of the ways in which you can invest your assets, whether they be tangible or intangible, in the coming weeks. And in doing so, I will provide practical examples of how to do it as well as discuss the associated ethical, environmental and social implications.
When it comes to this topic there are no easy answers so I can only promise advice to consider for your journey and it will be up to you to decide what is right for you and your loved ones.
All the best !