No, I am not going to a weekly report but since it’s the first trading week for the year, I thought of dropping some brief notes.
As mentioned in my previous post, it was a strong start for my US portfolio, rallying more than 5% in just two trading days. However, I was quickly reminded of how drastically short-term price movements can change.
By the end of this week, more than half the gains had vanished as the market reacted to various news, including the hotter-than-expected jobs report last night.
Getting Used to Volatility
That’s the nature of the stock market. If you want to benefit from the likely long-term gains from investing, you have to get used to short-term volatility.
“How?” you might ask.
With experience, you are likely to become accustomed to it. If daily price fluctuations weigh heavily on your mind, you might be overinvested in the stock market for your risk tolerance level.
What also works for me is simply ensuring the basics are covered – making sure my daily life is not affected by the stock market. In other words, have six months to a year of emergency funds readily available and invest only with money you won’t need for the next year or two (or even three) in equities.
Ideally, we should focus on the business fundamentals and not even check daily price movements. Some investors can successfully do this, but I’ve come to accept that this approach doesn’t suit me.
Instead, acknowledging my emotions and not reacting immediately to them is a more effective strategy for me. If you’re interested in learning more about mindfulness, you can find out more here.
For the record, while this mindfulness portal is from an acquaintance, I encountered these concepts much earlier, over a decade ago, during my previous career as an educator.
We aimed to teach students how to interact effectively across cultures. A crucial aspect of this involved cultivating awareness of our own emotions and learning to regulate them.
AEM Holdings (SGX: AWX) Surged by More than 15%
AEM stood out this week, with its share price surging by more than 15%. In fact, at mid-week, it was up by a whopping 25%!
Personally, I believe this price movement is speculative. The only company news released was the appointment of a new Chief Financial Officer on January 2nd, which is unlikely to cause a significant re-rating of the stock.
While I am still in the red for my current holding of the stock, it is now profitable after including my realised position. I maintain my opinion that if AEM can execute effectively, its mid-term outlook is promising. Hence, I am holding on to my current position.
For more analysis and view on AEM, you can refer to my following posts:
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