What are the mid to long term passive investors doing in this "slow down" market?

[Craton]

Speaking strictly in terms of mid to long term passive share ownership. Not talking about other instruments like Options, EFT's, CFD's, Derivatives and the like.

I realise that we all have our own strategies and goals and, that our risk tolerance differs. Just thought it would be good to share what we are doing in this current market.

Myself, being mostly contrarian, I've been topping up selected stocks and adding (one stock so far to increase diversification and the R/R factor) to my portfolio. I've also taken up SPP offers, not all but some and have not converted any DRP into cash dividends.

Having seen others suffer and panic in the 1987 crash, entering direct share owership with the Asian Contagion (1997?) in full swing, going through the Dot Com bust, 9/11, the GFC and now the "slow down", I am not adverse to seeing huge paper losses (only hurts if these are realised, lol) so I wonder how my fellow investors fare.

So, having you topping up, selling down, adding new stocks, going/gone to mostly or all cash or just sitting idle? What do you do/are doing in such a market?

 

[ggkfc]

Holding onto cash

Espcially after the RBA announcement
http://www.rba.gov.au/speeches/2016/sp-so-2016-03-18.html

Reading between the lines.. who wants to buy property?

 

[systematic]

Investing exactly the same as usual. Market state doesn't currently factor in my plan.

I have considered adding such a clause in and have already considered how I would go about that (nothing complicated - end result of basically ending up slowly in cash) but at this point in my investing I see no need to activate such a rule. If I do it will be because portfolio volatility has become meaningful to me. At the moment, the risk from not being in are greater (for me) than the extra swings I might get.

 

[ggkfc]

Speaking strictly in terms of mid to long term passive share ownership. Not talking about other instruments like Options, EFT's, CFD's, Derivatives and the like.

I realise that we all have our own strategies and goals and, that our risk tolerance differs. Just thought it would be good to share what we are doing in this current market.

Myself, being mostly contrarian, I've been topping up selected stocks and adding (one stock so far to increase diversification and the R/R factor) to my portfolio. I've also taken up SPP offers, not all but some and have not converted any DRP into cash dividends.

Having seen others suffer and panic in the 1987 crash, entering direct share owership with the Asian Contagion (1997?) in full swing, going through the Dot Com bust, 9/11, the GFC and now the "slow down", I am not adverse to seeing huge paper losses (only hurts if these are realised, lol) so I wonder how my fellow investors fare.

So, having you topping up, selling down, adding new stocks, going/gone to mostly or all cash or just sitting idle? What do you do/are doing in such a market?

Like you said everyone's risk appetite is different

But I could see a regime of regular stocks + some black swan hedging working in these uncertain times

 

[Craton]

Hi ggkfc, thanks for your input.

Holding onto cash

Is that all cash?

I'm 30% cash but that's due to an injection of funds I wasn't expecting. I'm also in no hurry to be fully invested either.

Espcially after the RBA announcement
http://www.rba.gov.au/speeches/2016/sp-so-2016-03-18.html

Reading between the lines.. who wants to buy property?

My son, he recently bought his first investment property, not in a big city or on the coast though.

 

[Craton]

Investing exactly the same as usual. Market state doesn't currently factor in my plan.

I have considered adding such a clause in and have already considered how I would go about that (nothing complicated - end result of basically ending up slowly in cash) but at this point in my investing I see no need to activate such a rule. If I do it will be because portfolio volatility has become meaningful to me. At the moment, the risk from not being in are greater (for me) than the extra swings I might get.

Great reply, thanks systematic.

That's the whole crux of the matter I guess, where one is in the investment process and the R/R appetite at any given time. Like you, I don't see nor feel the need to change my plan although a certain amount of fine tuning (SPP and the like) goes hand in hand with managing one's portfolio. With retirement still a long way off, interest on cash bugga all compared to the returns from divs, I'm happy to continue as before.

 

[ggkfc]

Hi ggkfc, thanks for your input.

Is that all cash?

I'm 30% cash but that's due to an injection of funds I wasn't expecting. I'm also in no hurry to be fully invested either.



My son, he recently bought his first investment property, not in a big city or on the coast though.

100% cash at the moment. Markets going bonkers and no time to follow!

Though I may be a lonely soul in my bomb shelter

Avidly waiting for a market correction to dump it all into bank stocks.. because who doesn't a good (4)monopoly

 

[Ves]

For the proportion of my portfolio in Passive index funds - both domestic and international - I add to these when I have the funds (generally every six months) + make use of the DRP. I'm neither more aggressive or more cautious in different markets, these are dollar cost average and very long-term holds (intention for life, circumstances permitting).

The stock picking portfolio has about the same intention on hold period, I buy or sell on valuation grounds. In all honestly I never really change much, which probably has to do with the fact that I'm fairly conservative in the types of companies I select and my willingness to hold unless my investment thesis is broken. There have been a few takeovers / mergers (SKE, MTU) but the script was taken up on these.

I haven't really found much to "do" in the last 12-18 months. I don't really spend as much time looking at the market as I used to as I've found you don't really need to spend much time obsessing over it.

If anything I've probably spent more time trying to understand companies from industries outside of my circle of competence. This specifically is probably accumulating knowledge rather than wealth, but it's possible it could be both some time down the track.

 

[ggkfc]

For the proportion of my portfolio in Passive index funds - both domestic and international - I add to these when I have the funds (generally every six months) + make use of the DRP. I'm neither more aggressive or more cautious in different markets, these are dollar cost average and very long-term holds (intention for life, circumstances permitting).

The stock picking portfolio has about the same intention on hold period, I buy or sell on valuation grounds. In all honestly I never really change much, which probably has to do with the fact that I'm fairly conservative in the types of companies I select and my willingness to hold unless my investment thesis is broken. There have been a few takeovers / mergers (SKE, MTU) but the script was taken up on these.

I haven't really found much to "do" in the last 12-18 months. I don't really spend as much time looking at the market as I used to as I've found you don't really need to spend much time obsessing over it.

If anything I've probably spent more time trying to understand companies from industries outside of my circle of competence. This specifically is probably accumulating knowledge rather than wealth, but it's possible it could be both some time down the track.

Is your valuation grounds Buffettesque? or some more intense modelling

 

[Knobby22]

I have been 90% cash until 3 weeks ago, now I am 98% invested is shares.
You should try to get out if you are in a bear market and get in if you are in a bull market. Now I am in I expect to remain unless another bear market occurs. I obviously think the bear market is finished though.

 

[Bill M]

Good topic.

In this downturn I have bought more stocks for my super fund. Outside of super also picked up some CBA cum dividend.

I tend to pull my head in when things get toppy and tend to buy when prices are low and this 20% correction came at a good time as I was building an income stream from my super pension.

I topped up a bit on my bonds too.

 

[Ves]

Is your valuation grounds Buffettesque? or some more intense modelling

The best answer is "it depends." Some situations require more (detailed) assumptions than others. My aim is generally to keep it as simple as I can, but there are times when this isn't as easy as I would like.

At the end of the day, every company is different, so I tend not to use the same tools for every job.

 

[Craton]

For the proportion of my portfolio in Passive index funds - both domestic and international - I add to these when I have the funds (generally every six months) + make use of the DRP. I'm neither more aggressive or more cautious in different markets, these are dollar cost average and very long-term holds (intention for life, circumstances permitting).

The stock picking portfolio has about the same intention on hold period, I buy or sell on valuation grounds. In all honestly I never really change much, which probably has to do with the fact that I'm fairly conservative in the types of companies I select and my willingness to hold unless my investment thesis is broken. There have been a few takeovers / mergers (SKE, MTU) but the script was taken up on these.

I haven't really found much to "do" in the last 12-18 months. I don't really spend as much time looking at the market as I used to as I've found you don't really need to spend much time obsessing over it.

If anything I've probably spent more time trying to understand companies from industries outside of my circle of competence. This specifically is probably accumulating knowledge rather than wealth, but it's possible it could be both some time down the track.

Cheers Ves, thanks for sharing "how you're doing it" with us.

IMO, learning not to obsess over it is a crucial component for any investor. Those of us with a very long term outlook, I think have a very different slant on how to employ funds and it is very interesting to learn how other longer term investors tackle the problem. Some of us might even learn something new.

 

[Toyota Lexcen]

Have participated in the WBC & NAB capital raisings, held onto the South32 and Clydsdale shares otherwise haven't bought or sold anything

with many years left until retirement, I sometimes think to sell some of the profitable stocks but the dividend has grown well, in the short term dividend growth may be flat

 

[Craton]

I have been 90% cash until 3 weeks ago, now I am 98% invested is shares.
You should try to get out if you are in a bear market and get in if you are in a bull market. Now I am in I expect to remain unless another bear market occurs. I obviously think the bear market is finished though.

Knobby22, great stuff. Good to hear at least one of us is positive for the future! Must admit I've always been a glass half full type.

If preservation of capital and not staying awake at night, to get out and back in makes a lot of sense. So too selling high, buying low. I so dig that!

 

[Craton]

Good topic.

In this downturn I have bought more stocks for my super fund. Outside of super also picked up some CBA cum dividend.

I tend to pull my head in when things get toppy and tend to buy when prices are low and this 20% correction came at a good time as I was building an income stream from my super pension.

I topped up a bit on my bonds too.

Thank you Bill M, glad you like the topic.

Thank you also for taking the time to post about your moves of late. Agree that a 20% correction is nothing to sneeze at and a good opportunity for those waiting on the sidelines.

 

[Craton]

Have participated in the WBC & NAB capital raisings, held onto the South32 and Clydsdale shares otherwise haven't bought or sold anything

with many years left until retirement, I sometimes think to sell some of the profitable stocks but the dividend has grown well, in the short term dividend growth may be flat

Thanks for your post Toyota Lexcen.

Ah yes, capital raisings are not all created equal. It makes so much more sense to pour funds into a divvy paying bank than a junior explorer trying to strike the mother lode, high R/R tolerance and blue sky not withstanding.

I too think to sell but only the losers, let the winners run I say and if these are paying a divvy too, all the better.

 

[So_Cynical]

100% invested as per usual, my plan has always been to buy stocks cheap and sell down but not out when not cheap, recycle capital and dividends...nothing's changed, having a really good run over the last 14 or so months, haven't bought anything since early Feb, actually have a bit of cash in the IB account waiting for obvious opportunities as did some selling, oil and gold stocks.

 

[Craton]

100% invested as per usual, my plan has always been to buy stocks cheap and sell down but not out when not cheap, recycle capital and dividends...nothing's changed, having a really good run over the last 14 or so months, haven't bought anything since early Feb, actually have a bit of cash in the IB account waiting for obvious opportunities as did some selling, oil and gold stocks.

Nice one So_Cynical. Recycling capital and div's, I like the way that rolls off the tongue and not a bad strategy either. I'd say that you're not alone in waiting for obvious opportunites. Thank you for sharing, appreciated.