It’s been an increasingly choppy market. It was bad enough when oil was noticeably crumbling near the end of last year, but now we seem be hitting increase volatility with days where we go down hard followed by a jump back up. Buy the Dip and someone reminded me the saying: “Sell the Rip”.
My portfolio is geared for income, and to provide a cushion in declining markets, has been tested quite a bit by my continued fear of a major breakdown in the markets. As a result of the volatility I planned to: A) raise some cash, B) streamline and concentrate existing positions in my portfolio to increase responsiveness, C) diversify by industries, and D) improve the quality of income away from REITs and smaller companies.
For a while I was doing well; closing out some old and small positions and taking the hits as I reduced some losing positions. It hurt a bit, but I had a plan in place. Then… I got pulled in some interesting stories and let some small holdings creep into my portfolios (Non-Registered and Registered). Net out, pretty much all the cash I raised have returned into the market.
Along the way to executing my plan I also realized my increased uncertainty, as several times I picked up a position and sold them quickly for either a loss or insignificant gain. Although I’ve added to positions, I am still very much uncertain of the market, but with the move to higher quality names I feel more comfortable with my portfolio through potential declines. On one hand I want to protect my principle as much as possible and do my best to avoid losses, but on the other I want to average down or take opportunities to increase holdings of quality names.
* REI.UN, HR.UN, BIN, KMP were very old and small positions and I felt sad to let them go.
** RRSP holding I wanted to trade in and out as it swung back and forth. Still waiting to see.
Added to existing:
* Added to existing position.
** Averaged down, but I will likely close out the added position
*** Averaged down and closed out the majority of the added position.
* DIV and GRC are the sexy stories of Royalty companies mixed with high yields, which isn’t always the best thing to go by… I deployed a bit of TFIA money to see where they go.
** CWB and X were missteps from writing Puts to gain incremental income and potentially acquire stocks that I want at lower prices. CWB I’ve been interested in and previously traded in and out.
Mulling moving this blog to a new site where I will put up more specific details of what I’ve done and gone wrong: The Distracted Investor