With the rebound in the crypto markets, I have stopped averaging down on my crypto positions (Ethereum, Bitcoin, Binance, Matic, Cardano and Zilliqa). If this becomes a sustained uptrend, I’m ok to sit it out and not average up on them. My cash balance is limited and I have turned my attention to the Chinese tech stocks market. What started out as a dip has turned into a correction and I have been averaging down on my Chinese tech stock & ETF positions (Alibaba, PinDuoDuo, JD stocks and Lion-OSPL HS Tech ETF).
Given that it’s a strong downtrend, I have spread out my buy positions into small amounts each time with a gradual reduction in the purchase price. It’s a tricky balance when the market is falling fast because I can fill my orders too quickly without a substantial decrease in the purchase prices. Or I spread them out too widely and end up not filling up my orders sufficiently resulting in too small an overall position. With my cash running out, I have to be more strict when averaging down on my stocks & ETFs. I have yet to open a margin facility for share trading as I’m going to draw down on my overseas cash balance and surrender values of our wholelife insurance policies first.
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I understand the increased regulatory risk on Chinese tech stocks can be a real problem weighing on their earnings and business models in the short to medium term. The question is whether the resulting structural changes to the industry will be positive or negative long term. At this time, I’m investing on the basis that the end result will be more positive than negative. But I’m careful not to exhaust all of my cash on something so uncertain. I’m willing to increase my Chinese tech stock & ETF positions as a percentage of my investment portfolio but only up to a certain point. That’s my risk management approach just in case the whole thing goes south and the losses don’t outweigh the gains on the rest of my investment portfolio.
It has been a few weeks of major changes in our lives as I bought a private property for my family to stay in from next year so we can stop renting and have our own place. Our son entered preschool and is adjusting to a different daily routine where he spends his morning with teachers and friends doing fun activities. Lastly, my wife applied for a new job in a different division. After the big restructuring exercise at her current division that concluded early this year, she secured a role but was not too happy with the kind of work she ended up doing. So when an internal opportunity came up that offered more interesting work, she was referred to it and passed a few rounds of interviews before getting the job. She will transition into her new role (which would be even more demanding but offers better career growth) in the next few months. I have to step up further to support the family and make sure everyone’s doing fine!