Monday, 26 January 2015

AFK! Ninja Turtle?

Ninja Turtle in Real Life
Source

Now it's the Greek election!


It seems like every week there is a new political or economic news item that rocks the stock market. Since the New Year the DIY Income Investor portfolio has wilted a bit and then started to recover. But the markets keep being hit by uncertainty and bad news: oil price, copper price, Ukraine, Charlie Hebdo, Eurozone QE, Ukraine, Russia, etc.

My reaction in the face of all this termoil is to do nothing - or rather do something else: hence I've crawled back into my investing 'income shell' and have been Away From Keyboard.

This current patch of uncertainty is good for the speculators - the 'shorters'. You could be one - as a 'retail' investor - via ETFs - but you need to be quick on your feet, and dedicated to watching every twitch of the market. If you shorted oil last quarter, you would have made a packet!


That's not for me - or I guess, for most DIY Income Investors. I invest 'long' - in other words, I buy and hold. If you 'short' (i.e. sell something you don't own because you think the price will go down) you have a contract expiry date: however, as a 'long' investor I can hold forever. And because I buy securities that pay a high yield, I have an income (most of the time!) to reward me for holding. That's the big advantage of this investment style - you have your income 'shell' you can retreat into: even 'doing nothing' makes money.

Just because you can trade every day - and probably every hour of every day - doesn't mean you have to. That's not to say that you shouldn't keep up to date with developments in the securities that you earn and be alert for any specific developments that might threaten those income streams. Those do happen occasionally and can have really negative effects.

But apart from that, there's nothing wrong with 'doing nothing'. Develop your ninja skills and pull back into your income shell.


I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

2 comments:

  1. Great site I get lots of ideas to research from it. I have just purchased ETF iShares Markit iBoxx Euro High Yield Bond which I see you hold as well. With the QE in Europe just announced I believe bonds should rise in value. Though whether the fall out from the Greece general election and the current weakness of the euro has an effect we will have to wait and see.

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  2. Good advice that even 'doing nothing' is a decision we can make! I need to read more wise things like this than listen to the telly, ahaha!

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