October 2020 Report - My profits got wiped out.. AGAIN!

My Portfolio by end Oct 2020

Yup it happened again, just like September, my portfolio got slammed as the month come to a close. Of course this is due to the coming US election held on 2nd November.

October 2020 Performance

After the beatdown back in September, October started quite bullish with my portfolio constantly beating the index peaking at almost 10% return, then like everything in life, shit happens, the panic sell off started as we draw closer to US election date, pulling my portfolio down together and close at -6.51% 😱.

Taking a closer look

Value Stocks: -8.63% vs -2.77% (S&P500)

Value stocks started pretty strongly as I try to claw back my losses in September by combining options play on the value stocks that I have, mostly calendar spreads on AAPL and MSFT. This proof reasonably effective as I am able to leverage my position and getting more returns and beating the index effortlessly. However, it all came crashing down on the last week of October. Remember I said Options can be a double edged sword? So with my position being quite leveraged, I ended up falling sharply as the US election jitters started. Closing at 4 times the loss of index.

Swing Trade: -3.98% vs -2.77% (S&P500)

My swing trades continue to perform badly. Since end August, I am currently at a 24 no Win streak!!! Some would get close to my profit target, then reverse back down after I move up my stop loss to my buying price. (I am looking at you VEEV) 😑. Nothing could be done here, cannot take any trades as the market is too volatile for me, don't really have much luck picking any winner either. But of course with proper risk management, such losing streak have minimal impact on my portfolio (also because i only allocate about 15% of my portfolio for this).

Yep you read correctly 24 consecutive No Winning trades!

Options: +4.66% vs -2.77% (S&P500)

Well.. at least this one is positive right? 😅 So options is something that i am rather proud of this month. I was bleeding quite badly past few months with my options play. I remember the turning point was about 1 month plus back. As I was whining about how I keep losing money on options to my investing friends over Whatsapp group...

Those few words made me re-evaluate my whole options strategy, and results immediately shows with my Options peaking at +26% return during October. I think I owe him coffee.

Investing can be a lonely journey, it is always good to have like-minded friends to share the pain and gain along the way. 

Anyway yes, as the market reverses, all the gain disappears. But, I didn't need to close any of the trades, because even with the drop my Option spread are still not In the Money and as time goes, theta come into play and it will go back to gain, unless of course the market decide to crash even further.

If you have no idea what I am babbling about, that is perfectly normal. Options can be very daunting and complex especially to noob, I am still struggling to grasp the whole concept. It literally take me minutes to figure out each setup I want to take. I know I sound naggy but please please learn and understand more about options before jumping into it or you will learn it the hard way like I did.

YTD report 2020

Yeaaah, after managing to inch closer to my all time high, all my profits disappear and I am back at break even point when October close. My reaction? Not worried, I am cool and collected investors, emotion has no place in Investing. I am confident the companies I invest in will reverse back up. and I am lying.

My Actual reaction

I mean really? 5 months of investing and I am back to where I started!! That definitely spoilt my weekend, and I had no mood to do my October report, hence the few days delay. 😅

What did I do?

Maybe I should have listened to news and sit out at the sideline and wait till the US election is over. Makes sense right? I should have exited at A! or B when the market start dropping! or maybe at the end of the month at C at least I still have my capital intact! what if trump do something stupid (again) and the market crash even further after the election!

So what did I do?? Well Tune in to my next Post to find out what actions I did take, and how it actually plays out. 

Update -> What happens next!

Remember Ferry is not a licenced financial advisor nor a millionaire (yet!) so do you your own due diligence! Provided data are purely based on historical records and may not guarantee future results. Follow my advice at your own Risk!