Sunday 16 May 2021

Stock Market Dip Portfolio Update | Let's see how low we can go!

Wow it’s been a crazy week and I think that’s what they meant when they said sell in May and go away. For me Tesla is a huge holding in my portfolio hence the recent drop in prices has really shaved off a substantial amount of gains in my portfolio. Before I start, do hit the like button and subscribe to my channel to keep up with the content that I release. So I just released an article recently on why cryptocurrencies are dropping, you can go over to my blog to read more about it. As all of you are aware, I did my Q1 portfolio review in March and was going to do my Q2 or half year review of it in June 2021 but this week has been interesting and I want to record it down for me to see it in 10 years or maybe 5 years down the road.

How the gains are holding up

So I had a high 4 digit gains since the beginning of the year and over the past few days, it has slowly dropped and with Singtel's recent announcement on their profit warning, my portfolio gains have dived down to a 3 digit gain. From my previous Q1 portfolio update, my stocks portfolio was at $40,129 and had a total return of 10.8% inclusive of dividends. As of current time, 14 May 2021, my portfolio is at $41,063 with a total return of 5% inclusive of dividends. Woah, all that numbers just being reduced, of course, they say you haven't lost anything as long as you don't cash out but the numbers are there and you can see it drop so definitely my emotions will be some what affected but I do believe in the companies I have purchased and will be holding them for the long term.

Even though my gains have dropped, the value of my portfolio is still similar to previous as I have injected some funds in (from RSP and some individual purchases). No one knows from here, will there be a recovery or the drop will continue on. In terms of my cryptocurrency, let's not talk about the total value of it as it will keep fluctuating due to the volatility of it. I currently only hold about 0.04 BTC and 1.19 ETH. BTC has been badly hit by reasons which I watched about on MeetKelvin's video where firstly, it did not act as a hedge against inflation when Yellen mentioned that inflation may cause interest rates to go up although she later retracted her statement and also of course Elon Musk's statement on Tesla no longer accepting payments in Bitcoin. The value of Bitcoin has been on a downward trend and it's pretty scary as ppl slowly start selling, as everyone knows, companies do hold a substantial amount of Bitcoin and if they were to also sell, we could see a drop in Bitcoin prices. So far, only MicroStrategy has announced that they added on their Bitcoin positions while the rest are holding on to it. In terms of crypto, I really put in a small portion of my money as the volatility would definitely keep me up in the night if I had a huge amount in it. So decide your risk profile and put in the appropriate amounts.

For me, besides being heavily in Tesla (about 35% of my portfolio is in Tesla), I have also been buying the World Stock Index ETF as part of the RSP with FSMone which hasn't suffered as bad a hit as tech and growth stocks. I like the stability it has provided to my portfolio.

Comparing Tesla to the VT, I am looking at the percent on the y-axis which is the percentage change scale based on the moving average for the chart's time scale. You can see the 1 day chart that Tesla returns are better than VT as the recovery of Tesla was quite substantial, of course you shouldn't be looking at the one day chart because we are looking at a long term horizon. In terms of the 1 month time period, VT has posted better returns as the recent drop of Tesla has been substantial. But if you further extend and look at the 1 year and 5 year performance of the Tesla VS VT, you can see that the Tesla has performed a lot better but at a huge volatility compared to VT. Of course, past performance is not indicative of future results but I believe that Tesla is an innovative company and will perform well in the long term. Let's visit back again in 5 years and see how the portfolio will look like. Although I will periodically be updating on my portfolio performance.

Managing the emotions that come with the market downturn

I guess moving away from constantly looking at prices does help. Also, if you had done prior research and know that the companies you have bought are profitable and going forward will be able to innovate and survive, tell yourself that it will survive! HAHA, all right, it's not easy but finding other things to do can help keep your mind off. With more restrictions taking place from 19 May 2021, we will be stuck at home more often than normal and it will be tough but we will weather through this together.

Some commentary on cryptocurrency news

Dogecoin has really become a huge and upcoming cryptocurrency that everyone is looking at. After Elon announced that Tesla will not be accepting payment by Bitcoin due to it's environmental issues, Bitcoin seems to dip with alt coins going up especially after he also mentioned that he would be providing developments with dogecoin added with the news that he has actually worked with the founders and developers of dogecoin since 2019. Mindblown, what a plot twist. Elon has been releasing explosive news one after another. What we can be sure of is that Tesla will still be holding on to their Bitcoin but in terms of accepting payments using cryptocurrencies, Tesla is definitely looking at other alternatives. Hope you guys enjoy today's video. Do hit the like button and subscribe to my channel.

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