Last month, I’ve went back in time and discussed how I invested all my money back in September 2017. I’ve discussed the process I used to select stocks and build an entire portfolio from scratch. I purchased my first shares (it was Power Corporation (POW)) back in 2003 and track my investing performances on this blog since 2012, but I recently have been given a unique opportunity to build a real-life case study from zero. In September 2017, I invested ~100K in the stock market and isolated this account to track my results.
Many investors will tell me that what is done is done and that “today” (whatever the day it is) is different. The game has changed. There are new rules, new threats, and you can’t invest as I did a couple of years ago. Fair enough. Today is not like yesterday. Where do we go from there? How do you position your portfolio to A) protect your capital from the next recession and B) play the trade war (and any other threats) to your advantage?
How you can play defense and offense at the same time
As investors, we usually have two common goals in mind:
#1 Protect our capital (don’t lose it on a stupid trade or get burn by a market crash more obvious than a whale).
#2 Make money (so we can retire happy and stress-free).
Combining both goals is like paying offense and defense at the same time. Is that even possible? Yes, it is. It’s called the “Patrice Bergeron” technique. If you are a hockey fan or a Bruins fan, you know how Bergeron is a great center playing very well on both sides of the ice. He’s able to give a hand to his defensemen by protecting the puck while shifting to offense and passing the puck around for the next goal.
This is exactly what you must do when you manage your portfolio throughout uncertain times like this one. Mind you, it will be very rare that you hear everybody agreeing that the economy will do well without any speedbumps for the next 2-3 years. We rarely have a “it’s all good” attitude when it comes to economic & investing topics.
First, play defense
At anytime you feel bad things will happen to the market, the first step is to play defense. Setting your portfolio into defense mode doesn’t mean you must sell 33% of your portfolio. This means you must review each of your holdings to make sure those companies are well equipped to face any hurdles.
Balance sheet standings, growth vectors, past quarterly earnings will tell you a story you can’t ignore. Where the company is heading? What could possibly go wrong? By assessing where each company is at, you will know if you must sell a few of them or if your boat is ready for the storm.
Then, play offense
By cleaning your portfolio, chances are you will have some cash left. It’s time to play offense and look for opportunities. I always keep my “buy list” up-to-date even when I don’t have cash to invest. When major economic news hits the market, we usually see opportunities rising. The market is inefficient most of the time as investors react with their emotions. By selling massively (or buying massively), they create distortions in the market.
If your buy list is up-to-date when this happens, grabbing shares of amazing companies at cheap prices will be like picking juicy apples in September.
Now, I’m pretty sure you want to know how to review your stocks and how to build a valid buy-list right? This is exactly what I’ll be telling you in my next webinar (and it’s all free!).
Webinar coming up! Thursday October 10th!
(keep reading, there is a free replay link if you missed the live session)
In my next webinar, I’ll be covering my step-by-step methodology to review my holdings and I’ll share how I make my sell decisions and clean my portfolio. You will also know about my best trick to build a strong buy list that will come in handy during difficult times. If you read this article and the date has already passed, register to watch the replay!
This webinar is for you if:
- You are already invested in the market, but wonder what will happen next.
- You want to avoid major losses and getting cut by a market crash.
- You aim to build a safe portfolio generating income for the future.
- You enjoy discussing the market with a passionate investor!
The webinar will be hosted on October 10th at 1PM EDT. If you register, you will have access to a full free replay (at anytime).
Topic: How You Can Play The Trade War To Your Advantage – Play Offense & Defense
Date: Thursday, October 10th at 1PM EDT
Description: In this webinar, I’ll be covering my step-by-step methodology to review my holdings and I’ll share how I make my sell decisions and clean my portfolio. You will also know about my best trick to build a strong buy list that will come handy during difficult times.
- If it’s your first time, you must provide your email address to register to the webinar. This is completely free and the webinar is free as well.
- Webinar Ninja is the platform we use to run all our webinars. It works well and provides an optimal experience for everyone.
- The presentation is about 45 minutes.
- There will be a Q&A session of about 25-30 minutes.
- The webinar works on Google Chrome or Safari from a laptop or computer. (not compatible with smartphones or tablets)
- If you can’t make it on time, there will be a full replay available, but you must register to access the replay.
Forward this article to your friends, I’m sure you know someone who is struggling to invest right now.