I have been busy in the past few days using up my cash to buy the dip in the stock markets, both on individual stocks and global ETFs. The fall in the markets is due to concerns over the omicron variant of the Covid virus and its dampening effects on the reopening of economies around the world. The prices may keep falling so I’m averaging down slowly. Not like I have a choice since my low cash balance is preventing me from making any big purchases. Watching buying opportunities slip by you due to a lack of cash is a frustrating experience. I may probably increase my investing cash buffer on standby as a learning point from this whole episode.
Cryptos have been rebounding recently so I have stopped buying anything and maintained my regular weekly purchases. Just to keep increasing my exposure to this asset class. I like how its performance is different from stocks and ETFs throughout this period of time and adds diversification to my investment portfolio. On a side note, I had to sell some of my bond ETFs (prices have gone up slightly) to raise cash to pay for some unexpected big expenses that came up. I imagine this is what it’s like to have insufficient emergency cash due to over-investing my cash on hand. Once again, another learning point to probably set aside a bigger emergency cash buffer on standby.
It’s good that I go through more of such market cycles under different circumstances. So I better understand how to adjust my cash management and investing strategies when needed. As well as prepare and be ready for the buying opportunities that surface in the equity and crypto markets. Making financial mistakes while I’m still working and drawing a salary income means I can correct them in a matter of months. With a lower or no earning power (especially as I get older), it could take me years to rectify these financial mistakes. Better make errors while I can still afford to.
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I’m just going to share a piece of positive news before I go into the negatives. My wife had her remuneration outcome review and she’s getting a small pay rise and bonus at the end of the month. It’s better than last year when there was no pay rise and a token bonus. Looking forward to replenishing my cash reserves so I can start the new year on a better footing. Now, on to the bad news. I updated my Liquid Assets Google Sheet and it’s terrible. Here are the numbers as of end Nov 2021.
Cash – $15,000
Securities – $868,715
Robo Advisors – $103,600
Cryptos – $185,500
CPF OA – $140,200
Total – $1,313,015
Cash went down by 40% as I kept buying the dip. Securities dropped by 3% despite quite a bit of capital injection on my part. Robo Advisors increased by 3% due to the automated monthly investment plans. Cryptos is a highlight for me as it went up by 23%, totally saving the rest of my portfolio. CPF-OA fell by 1% as some funds are being used for monthly housing loan payments and others are invested with Endowus. When I total up the various components, my liquid assets as of end Nov 2021 had no movement at all. Well, it went up by $5 so the percentage gain is as good as 0%.
It’s a disappointing result for the month of Nov 2021 but I got to enjoy a few good months before that. Anyway, it’s important to remind myself that I’m a net buyer of the equity and crypto markets. Meaning my plan is to accumulate more stocks, ETFs and cryptos over time. I rather prices stay low while I’m still buying. Especially when my cash level continues to recover with each month from the salary income. I can still maintain the automated monthly investment plans but I had to reduce some of the amounts because the drawdown was too significant. Digging myself into a cash management hole is a bad outcome that I need to try ensuring it doesn’t happen again.