Quote:
Originally Posted by KinAlberta
My market behaviour in the mid-2000s was an obsession with market conditions that could lead up to a market collapse (derivatives, housing, etc) and I eventually sold almost everything and kept only cash rich companies that would take advance of a possible market collapse. (BRK, Loews, Fairfax Financial, Markel, Apple, etc). In the end only BRK acted on the opportunities. Even Loews got defensive. Basically cash was king, not owning cash rich companies.
My market behaviour this past spring was to completely ignore the pandemic’s effects. I made zero trades and only even looked at the brokerage accts maybe once over about six or seven months from January on.
Funny though, now with the rapid market recovery and the huge amount of money printing, government borrowing and the central bank interventions I’m back to dwelling on the ramifications and risk/opportunity of a future panic.
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Well, if you have enough money to live on the rest of your life without needing it to grow or earn income, a guy could sell out and sit in 5 year GICs at 1.3 to 2.0%. A guy could build a laddered portfolio from 1 to 10 years, spread the money around between CDIC insured financial institutions to the CDIC limit and basically have no risk. Means you would only average 15,000 of income per million invested, so you wouldn't be keeping up to inflation after tax but you have zero risk to the principal. Other viable choice is to find some other asset class like real estate to put the money into. The issue with rental income is it is more work than passive investment but a person can always hire a Management company to look after the properties.
The stress and risk of investing in the stock market is not for everyone