Last week, I invested a huge sum of money into the American stock market. Almost 60,000 USD, which at that time was $84,000 SGD. It's a lot less in SGD now since USD depreciated a lot against the SGD after the Fed interest cut.
It was a scary week that had huge surges and huge falls on alternate days.
I sank the entire sum into 8 different ETFs. Fintech, software, semiconductor, aerospace & defence, gold, one pretty well-performing active fund and two general index funds. I think they were bought shortly after the market opened on 3/4, when Dow was at about 26,450 points. I derived that based on the purchase price of my various equities, but it should be accurate to -/+ 50. The following two days the market crashed... and crashed again. When the market closed on 3/4, I was at +$1200 gains, and the next day I was at -$200 losses, and -$1400 when the market closed on Friday. All of my equities fell around 3%; one fell 5.40%.
I won't lie about it. Seeing those losses were bad for my heart. Even though the losses were only at 2.5%, these was a good chunk of my entire assets. When the numbers are huge, even a small percentage is a lot of money. I'm starting to understand the concept of panic selling better; I kinda feel like doing the same at the next upswing -_-;;;. Huge swings like these have way surpassed ordinary market noise.
I made a big mistake. I didn't do dollar cost averaging. Just threw the entire thing into the market in one go. God, what was I thinking. I probably can try to test the system by selling a bit at upswings and see if I can get anything back to buy at the next big crash. Doing it in small amounts should make any mistakes made hurt less.
Still, I'm not easily fazed. I do have the very important "emergency fund" of ...$4k!
It might seem like I am living life on the edge, but that's enough money to help me sleep at night since I'm just a simple, forever alone man. (And I reckon my emergency fund is more than some people's life savings)
It doesn't seem like the pandemic will end anytime soon, so this situation is likely to continue for many more months. The market might crash further. I have missed an opportunity to catch the stocks at a greater discount. Plus, there's likely another crash coming at the quarterly earnings report.
I decided to write this down as a reminder of my mistake. When the pandemic is over and assuming the market recovers to the point right before the market started crashing, I'm going to come out ~11% positive, which means a gain of at least $7000, which is almost $10,000 SGD at the current forex. But it COULD have been more. This is going to haunt me for some time. With my personality I would likely drag all of my life's "what ifs" to my grave.
From now on, I shall remember to dollar cost average it. Don't rush no matter what.
To be fair though, I think I am being too harsh on myself. I only started serious investing in December, so it's only been 3 months. 2 weeks ago I have liquidated a large chunk of my investments (around 84k out of 90k SGD) before the great crash, and locked in a gain of $5000 SGD at that time. (although I should have liquidated more...)
$5000 in 3 months is quite good for a beginner. I have gained a lot of knowledge and experience in just 3 months, and I think this knowledge will greatly contribute to my early retirement. I suppose I did have a small head start thanks to my H1 economics back in JC. Gave me a grasp of how markets work. Funny how education works. They always help in the most unexpected ways.
Most importantly though, I can't believe how much I'm enjoying this investment thing. And, the potential gains are seriously huge. When the pandemic is over and the market recovers to pre-virus status, I would gain $13k~15k SGD. That's a almost half of my annual savings from my day job. It's just a matter of when the vaccine's gonna be out. Seems like it could be at least a year though.
The original plan was to have my first retirement 5 months later. I would need to be quite financially secure by then to pursue my other plans at peace. But at this rate it seems like I could only quit when the pandemic is over for good. Although on the bright side it means I will be able to keep investing at a discount until then. Maybe there's a chance to hit 150k by the time I quit? D:
Still, I can't believe that a pandemic happened a month after I started serious investing. I'm playing this game at hard mode right away, and this game is absolutely not for the faint-hearted during a global crisis. Sure wish I started investing earlier.
I am like a changed man now. The first thing I did in the morning used to be reading gaming news, but now it's become reading about the market. Literally, I google "stock market" every morning right after waking up, else after I step out of the door.
Hmm, I wonder what the me from a year later will think when he reads this. Might be all my predictions are off. That would suck. Ideally, I would be making youtube videos and/or running a shop at that time. Anything but being a corporate rat. Even though I am still filled with doubts, I know that nothing will ever come out of taking no action. All the best to me.