It really doesn’t matter what will happen. The bull market
may resume (my opinion) and if so, I’ll likely buy some more shares in
companies I love to own at cheap prices or sell put options on them at depressed share prices.
The options will either make cash when expiring worthless or I buy great companies
at even cheaper prices. If there is a bear market,
I will get stopped out of my riskiest investments and have a manageable loss
since I have diversified and thus build yet more cash to buy stocks cheaper in the
future.
Yes, my overall portfolio value may fall but so will portfolios of
most investors – especially those who panic or are forced to sell at depressed
valuations and who thus make their losses permanent. So on a relative basis, I’ll be better off
than most stock market investors around me while building up cash from
dividends and rental properties that I haven’t sold.
As a minimum, I’ll have a lot of cash; the upside will be
that I will be able to hold on to most of my investments and wait for their
recovery PLUS the opportunity to invest my cash at rock bottom prices.
Over the
long term markets tend to go up – that has been so since the dawn of time;
although sometimes with very long waiting times. Yes, my performance may not be
stellar but I will retain my assets and hopefully perform as good as or better
than most. So doing nothing – or better virtually nothing - may be the best
thing to do right now. When the dust settles, I may be a bit like the one eyed
king in the land of the blind – with preserved assets and cash to fight another
day.
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