The Amateur Investor Ep. 5: Should I stay or should I go?

So it’s been a little while since I’ve had a look at my stocks, or at any news media in general. Here in Australia, much like elsewhere, the COVID 19 virus has seen a large shift across society. Sneezing or coughing in public brings the kind of looks and mild revulsion similar to when you let off a particularly noxious, burrito-powered fart in an occupied elevator. 

After a decent amount of procrastination filled with relentless gaming (Call of Duty: Modern Warfare, Borderlands 3 with my little brother, The Last of Us) I decided to log into my Commsec account with not a small amount of trepidation, on the verge of doing a cartoonish pantomime with one eye peeking out from behind a trembling hand as I clicked to look at my holdings. Surprisingly, they were doing better than I had hoped. Having bought into a few more companies since the last issue, I wasn’t sure what the pandemic would do to my portfolio’s value and feared the worst. I had taken a brief look at my holdings about a week back and had sold off half the stocks I held that had made the most gain to try to preserve the profits I had, but since then I’d not been near my portfolio. The reality I saw was that whilst most of my stocks had done something of a bounce and were now trending down in value, the rest of my shares had made steady gains and were holding between 13 to 30% profit, which was pretty good given that it was my first rodeo in investing. 

I sipped at my coffee and glanced happily at the high earner stocks. I was happy to let them keep doing what they were doing. After all, I was a long-hold investor and patience was my strength. Patience and good research. The question was, what do I do with the stocks that are losing value, particularly the ones that haven’t gained value since I bought into them. A common motto often touted by investors is to buy low and sell high. Whilst it’s relatively simple, the question comes to how you put that into practice in investment scenarios like the one I found myself in. 

One of the Mockingbird crew once told me that if you have good reason to believe that the company you’re into is going to eventually come back, it’s a good idea to buy more shares in them if the stock price is cheaper than what you bought it for. Call it doubling down, call it being optimistic, it depends on the company you’re invested in and what they do. The ones I was looking at were in both education and travel, industries that had nosedived when COVID first hit.  I was confident, and still am, that these will bounce back in quick order once the travel advisories were over. People, sick with cabin fever would be looking to travel hither and yon. Schools would inevitably open back up. So my bet was relatively safe. 

But I was still worried. I had no idea how much I’d commit if I was going to buy more stocks with those companies or if it was even a good idea to do so. Just that same morning I had watched footage from the United States of people protesting the lockdown and facemask laws, mimicking mottos with those of the pro-choice movement and the gun rights movement. A part of me still thinks there is worse to come, especially when people are treating this virus as a flu rather than a deadly pandemic. But at the same time, there’s been a lot of victories in this fight, a lot of people are coming together to do the best they can.

I guess that’s part of what investing is. Trying to gain research-backed optimism during the harder periods and maintaining a realistic grasp of things as they are and how they could be in the near future. If you’re only just getting into investing now, I don’t have much advice to give you since I’m only just scraping the tip of the iceberg.

But I will say this. Look at industries that you know will be there after this is all over. Then do your research and figure out what your contingencies are. That may take a lot of time, but I promise you it’s worth it.

But above all, go slow, play small and learn.