Market timing step 2: going back in
For the record, I turned bear-ish in the summer 2019 - here’s my post from Recession incoming! (part 2) thread:
Aug 7th, 2019 7:02 pm
At this point, I only need to decide when to repurchase IEMG and VTI in my RRSP. It’s just 10%+ of the overall portfolio, but want to use it as yet another “learning opportunity” of sane decision making in crazy timesfreilona wrote: ↑ ..And yeah, I’ve been witnessing people going to cash in correction/crash anticipation almost every year in 5+ years since joining the forum, while we enjoyed decent returns..
..yet if I look closer at our portfolio returns, most of the gains came from the US. Developed countries and emerging markets ETFs that we hold are flat at best (not counting the dividends, but I’m pretty sure GICs would’ve provided similar if not better returns) Canadian ETFs did a bit better, except small and mid caps one that I was buying in my TFSA. And I wish I've sold a handful of remaining loser stocks [Upd. Have sold in the fall] - or, better yet, followed your favourite advice and never bought them in the first place
Last year was the first negative year since I started tracking portfolio returns in 2014. -2.2%, no biggie, so I kept our equities allocation high. But once we’ve got back to where we were last summer, I was happy that I’ve got assigned when my covered calls expired. As I’d be struggling to pull the trigger myself..
So I sold all VTI and half of IEMG in my RRSP and XLF (US financials ETF) in husband’s. Now our allocation is closer to the proper 40/60 balanced portfolio. Yes, I did it before this dip - kudos to @alexcalvado who did it probably a year too soon.. But, then again, as of July 31st our portfolio’s 1 year return was only 2.5%. Yeah-yeah, YTD was 9.7% and 5 years 7.7%.
But, given the size of the portfolio (enough for at least me to retire ) - do I want to keep the remaining equities allocation intact if a chance to see them drop seems higher than them beating GICs in the next 5 years? Honestly - I don’t know. But was tempted to also sell HXT in the non-reg account - and shove the money into 3% 15 months GIC while People’s Trust still had this special.. [Upd. Have done in September]