Did you get smoked by the market? We sure did
But at least we're not alone... right?
The ASX 200 has sunk more than 5% since Friday, with recent unemployment data turning out to be the straw that broke the market's back.
Commentators are calling for the US Federal Reserve to immediately cut rates to ease the global markets' growing sense of panic. After all, can the Fed afford to be behind the curve on rates... again?
There's also fear spreading around Japan's equity market - which plummeted around 20% (a bear market) last week, before rebounding 10% over the last two days - as well as its economy (given recent currency movements and rising interest rates).
A lot has changed in a year. Bond markets are now pricing 2-Year Treasuries at 3.97%, down from 4.8% a year ago. Meanwhile, 10-Year Treasuries are currently yielding 3.85%, down from 4.05%. There's also the fact that 2-Year and 10-Year Treasuries are now flashing warning signals of a recession, as outlined in this article here.
For context, the US Federal Funds Rate is currently 5.25-5.50% - so the market is pricing in more than 150 bps of cuts over the next two years - which it would really only do if the US sinks into a recession.
Meanwhile, the VIX Index - which tracks volatility based on S&P 500 index options - has soared more than 211% over the last month, and is up 134% in the last five business days alone.
However, amid all the fearmongering headlines and panic, it's important for investors to take a long-term view.
As AMP's Shane Oliver recently penned, for most investors, the best approach during times of stress is to stay calm, stick to your long-term strategy and take advantage of the rising long-term trend of share markets.
After all, while there have been many drawdowns, corrections and bear markets over the last 100 years, investors' best bet was staying invested over the long term.
So to help put you at ease, Livewire thought we would share some of the market moves the team has made over the last few weeks that now look quite silly in retrospect.
And just remember - we're far more likely to learn from our mistakes than our wins - so take it in your stride!
- I sold ASX Fintech stocks - Plenti (ASX: PLT), MoneyMe (ASX: MME), and Wisr (ASX: WZR) - which was a good call (they're all down ~7% in the past month). Then put the money into Ethereum (which is now down 22% in the last five days).
- I have a small allocation in my portfolio to a hedged ETF tracking the Japanese stock market. Adding to existing losses, I rode the 15%+ crash down in the Nikkei 225 yesterday and today's +8% ride up. And yes, I'm still down.
- I loaded up on my holding in Nvidia (NASDAQ: NVDA) on Friday after the stock sank more than 16% over the past month. Dollar-cost averaging - I told myself! It has fallen a further 6% over the last two days, and I suspect it will continue to do so.
- Like my colleague above, I bought Nvidia recently. My SelfWealth account reckons I've lost 20% on my purchase. (But hey, I also own Rex, so things could be worse...)
- I bought Nvidia at the stock split. I am down 27%.
- I bought the Betashares Crypto Innovators ETF (ASX: CRYP) about three months ago because I thought the bottom was in for cryptocurrencies and was bullish on Trump's pro-crypto stance. I opted for the ETF for exposure to "global companies at the forefront of the dynamic crypto economy" (instead of exposure to individual cryptos like Bitcoin). The ETF was absolutely smoked yesterday, down 21.5%.
- I bought a Global X FANG ETF (ASX: FANG) for the first time two weeks ago - it was actually the first ETF I've ever bought. "What could go wrong?", I thought to myself. A lot, as it would turn out.
Have you been ploughed by the recent market pullback?
Share your stories in the comments section below.
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian Group, Your Money, Sky Business and Sky News.
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
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