31 May 2022 Liquid Assets Update – Big drops across all classes

I was not looking forward to updating my Liquid Assets Google Sheet today. It was looking like a terrible month financially for us and finalising the 31 May 2022 numbers on my blog just made it a lot more real. This has to be the one of the worst end of month performance for us so far as our liquid assets recorded big drops across all classes. The only other time I can remember the figures being so bad was the 31 Mar 2020 update and that was when the financial markets were smashed by Covid lockdowns. Let’s get into it.

Cash: S$17,000

I kept averaging down on my existing stock and crypto positions as the markets dropped. Because the fall was so quick and steep, I used up a lot more cash than I was expecting. And I have a few big expenses this month to pay for. So even our monthly salary income couldn’t offset such a significant drawdown of cash balance. I’m going into cash recovery mode now as the amount is too low for my comfort. Not having a cash buffer for the family is just being stupid now.

Securities: S$800,000

Tech stocks and ETFs getting hammered resulted in my share portfolio tanking even though the rest of my stocks and ETFs held up okay. Even with me manually averaging down on existing positions, I could not stop the heavy decline in value. I don’t really use a dollar cost averaging investment strategy here because I prefer to have more control over when and how much I’m averaging down on. Not like it’s working better so I may have to rethink this.

Robo-Advisors: S$103,000

As I diversified the mix of my robo-advisor accounts by including thematic portfolios (such as tech), they also took a huge hit because of the thematic ETFs being used. Nothing I can do except continue with my dollar cost averaging investment strategy, which is my main approach here. It works best in a bear market when there is a lot of pain from reviewing the robo-advisor accounts so this is not the time to stop it. I don’t have the capacity to increase the DCA amounts because of my lack of cash.

Cryptos: S$150,000

This took an absolute beating as all of my crypto positions went down by the most. While I was averaging down on them, it did little to stop the biggest fall ever recorded for any part of my investment portfolio. I made some moves to reduce the risks in my crypto portfolio that I talked about in my previous posts. It was necessary to ensure I can continue to invest in crypto and not get forced exited. Even though I thought I knew this area has the highest volatility (hence highest risk, highest reward), what happened with LUNA made me realise I know nothing about it. It’s time to reassess what I’m doing here.

CPF Ordinary Account: S$151,000

The only part of my portfolio that is not down and it’s not even considered investments. Most of my monthly CPF OA contribution went to paying off my housing loan while most of my wife’s CPF OA contribution was invested in Endowus. So there’s only a small increase from the remaining unused CPF OA funds injection.

What am I doing now after such a down month that can get even worse?

It hasn’t been good and I know things can get worse in the next few months or even years. Other than weathering the shitstorm and learning from it, I’m just trying to make sure I don’t blow up my investment portfolio. It’s been tough reassessing the risk and approach so I can adjust the investment strategy for each part of my portfolio. I don’t like changing things so frequently but the tech stocks and crypto markets meltdown is a very important lesson in risk management and flexibility in adapting or reacting to a new environment. I’m past mid 30s and I can see how increasing family & financial obligations will make it even more difficult to save and invest every month. Inflation is a monster that keeps raising living costs which eats up more and more of our monthly income. At this point, it feels like I’m barely keeping things together but I will try to push through it.