Blog Post #7 – Continued Volatility

Stocks have been sliding downwards since mid-February and are down significantly from all-time highs.

S&P500 Index

It quite unclear why stocks have been falling. Some point the reason to the fear of rising rates, a market correction, or extremely a market crash. However, if we zoom out from the chart of the S&P500 and look back to the market crash of 2020, the S&P500 dropped 31.81% compared to minor 2.36% as of recent from all-time highs.

The Market Crash of 2020

Since the 2020 crash, we have since recovered. If you had invested at the very top you are still up 13.66% as of today. So we are nowhere near the characteristics of a crash right now or it is way too soon to tell.

Appreciation Since Investing at the Top Before the Market Crash

What I am doing

Seeing red is painful, but I continue to invest in companies I have high conviction towards. I see these major declines as buying opportunities overselling them because I know such companies can continue to operate and grow into the future.

If the market continues to drop, I will continue to buy more. Dollar-cost averaging is my most favourite and simple technique to execute. However, the execution here works without any emotional factors. Otherwise, investors are unable to follow their own rules and act irrationally and lose the benefits of what DCA tries to give.

Here are some companies that have dropped significantly from all-time highs that I have been actively watching or investing in.

Teslahttps://ca.finance.yahoo.com/quote/TSLA?p=TSLA&.tsrc=fin-srch

Squarehttps://ca.finance.yahoo.com/quote/SQ?p=SQ&.tsrc=fin-srch

Applehttps://ca.finance.yahoo.com/quote/AAPL?p=AAPL&.tsrc=fin-srch

Gamestop is unstoppable

Despite the market falling for the past couple of weeks, GameStop continues to rise remarkably.

I am not in this stock, but I’ll continue to follow it to see where it goes. I look forward to their next earnings report on March 25th, 2021 which will either validate or invalidate its stock price.

Sources

  • https://apnews.com/article/why-rising-rates-unsettling-wall-street-explained-4a672f914e9396a9e9bcda44eebf74d6
  • https://www.investopedia.com/terms/c/correction.asp

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