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+--- Thread: Rough Day! (/showthread.php?tid=496)
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RE: Rough Day! - rnsmth - 04-11-2014
In 2008 our IRAs dropped 75%, invested mostly I options. Our defined contribution part of our retirement plan dropped by 28%. We gathered up every Penney we could and poured it into our 457 plan, into a MPT type mutual fund portfolio.
In 2009 I started pouring what money we had left in the IRAs into calls and LEAPs based on the explosive growth of the mobile internet. Ended up with a 70% CAGR between January 2009 and January 2012. Started shifting that into dividend growth stocks in mid 2012.
My exposure to financials is limited to two Canadian banks and GE (unless you assign REITS to financials).
I think the possibility of a 50% drop is about zero. I am ready to handle a 20-30% drop in share price based on my current portfolio management rules. It is my strong belief that such a drop would result in higher income down the road.
I think that one's reactions also depend, in large part, on what metrics one is using to evaluate portfolio performance. Those using metrics more correlated with share price are likely to have a tougher time and more likely to sell low - at what historically have been shown to be a study in poor timing.
RE: Rough Day! - Dividend Watcher - 04-11-2014
Alex, I was in the process of shifting to DGI in that time frame and was also holding a bunch of cash so, in a way, I folded except for STT and PEP. Then, when STT dropped to the 20's I knew they were just like all the rest of the banks gambling on derivatives, and sold that.
Did a bunch of buying in 2009-11, developed my business plan and changed my focus.
So I agree, many of the MPTer's, that only think of amassing the biggest prize and don't focus on their companies' earnings and their income stream may have a rougher time of it. Right now, I think it's going to be a minor issue with me.
Me? I'm looking for some real bargains. We ain't there yet.