Saturday, October 1, 2022

Keep Calm And Carry On

Equities are tumbling, REITs are falling, long term bonds are battered, commodities prices are inching up and, despite the inflation, cash is king.

In other words, your Bedokian Portfolio might have turned on its axis.


In the current economic situation where there is an armed conflict, a commodities crunch, supply chain issues, inflation, interest rate hikes, threat of a huge recession, etc. It is kind of scary. On the other hand, it kind of felt surreal as well. Never mind that our investment portfolio value is going down, maybe by 5%, 10%, 20%, or so on.


I had explained earlier that it is not a surprise where one's diversified portfolio is suffering a downturn, because that is how it is, at least for the short term. To me, an investment portfolio's runway should be at least a decade long, so (as I had always said) such moments are nothing but kinks in a long journey.


For passive Bedokian Portfolio investors (like Bob currently), you may have not even noticed all these things going on, for your rebalancing could be done probably once every quarter, half-year or annually, where you would transact according to the weightage of the portfolio and the price as at that time.


For active Bedokian Portfolio investors (like myself), you would probably look out for opportunities in the markets, buying up sustainable securities belonging to different asset classes that had fallen from their mean/value and/or selling those which had risen above their averages, while rebalancing your portfolio at the same time


Giving in to panic and fear is the last thing on an investor's mind. We should instead look for chances and sensible bargains. Notwithstanding the different macro, geo-political and socio-economic situations and scenarios, are you feeling the same thing back in February – April 2020? And with it, did you remember what happened after that?


Short of a nuclear doomsday event or an alien invasion (or both), the markets will pick up and continue churning after a period of downness


Keep calm and carry on.