Recording summary · March 2021
Why I HATE the stock market - stock market crash 2021
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Overview
A three-week stock market correction triggered by Treasury bond yields erased most of Daniel's previous £13,000 in investment gains down to approximately £2,000, leaving two portfolios in a net negative position and highlighting the emotional toll of trading speculative stocks without securing profits.
Holding through downturns and buying dips in accordance with Warren Buffett's philosophy led to further losses, while major equities such as Apple, Facebook, Amazon, and Tesla experienced pullbacks or moved sideways amidst questions about fully priced valuations.
The market downturn and year-long flat performance in investments produced substantial mental stress, prompting a reevaluation of investment strategies toward dividend-paying assets like oil companies rather than relying solely on capital gains.
Themes
Impact of the stock market correction on investment gains and portfolio performance.
Evaluation of long-term holding strategies versus profit-taking and dip-buying.
Valuation and price movements of major technology stocks including Apple, Tesla, Amazon, and Facebook.
Psychological stress of market declines and speculative investing during lockdown restrictions.
Shifting investment focus toward dividend-paying stocks to mitigate capital gains volatility.
Developments
Treasury bond yields triggered a stock market correction phase.
Apple shares fell back to $126 after reaching nearly $140, returning to the level recorded nine months prior in August.
Daniel sold Tesla shares around $650 before the price rose above $800 and later receded to the $600 range.
Funds remained invested in a stock that showed flat performance over an entire year.
Uncertainties & gaps
Whether the stock market correction will continue until the end of March.
How long it will take for Daniel's selected stocks to recover, whether over weeks, months, or years.
Whether dividend payments would be sustained or cut if a stock experiences a price drop.
Determining the optimal timing to sell or purchase additional shares when relying solely on capital gains.