Hi Sixers! As promised, here’s part 2 of “Investing now for the future, my personal strategy to ensuring an enjoyable retirement”. If you missed part 1 please read that first; you can find it here.
How I rebounded from a market crash
Above, I mentioned the styles of investing I am currently doing but I didn’t always only invest in ETFs. I used to invest in mutual funds and individual stocks, I turned to an all stock strategy after the 2008 crash. I purchased the Vectorvest financial program (highly recommend), it recommended all the beaten down stocks that got hit unfairly even though they had great fundamentals and were actually making money for their stockholders. The Vectorvest program suggested stocks like Bank of Nova Scotia and CIBC, just to name a few. If you’re not interested in a stock selecting software like Vectorvest, try buying stocks that you’re interested in and are proven to appreciate. I recall telling my son, “instead of buying Jordan’s shoes, why not buy the stocks of company that makes the shoes?”
During my consultant years, I travelled a great deal and I used my Visa credit card 2 to 3 times a day, 5 days a week. That is why I chose to purchased Visa at $40.00 a share when it went public. The stock skyrocketed to $271.00 before splitting (A stock split is a decision by a company’s board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split, an additional share is given for each share held by a shareholder), it also pays dividends to stockholders. At the time of writing this article, the stock is now at $139.42 per stock. This is one of my strategies for picking stocks – to only buy stocks that pays me back.
Something that a lot of people have a hard time getting their heads around is that during a market crashes you should buy more stocks. I actually borrowed money during the 2008/2009 financial crisis and purchased stocks which did very well, as you know, the market rebounded as history always shows it does. “What we learn from history is that people don’t learn from history”, Mr. Warren Buffet. I’m hoping for another crash…. sounds funny right? I purchased a beta ETF stocks that bets against the market. This is called an inverse ETF. So, when the market crashes it increases in value. This is called selling short. A good explanation can be found in the movie the ‘THE BIG SHORT’ it explains the strategy of betting against the market and what also happened in 2008 financial crash. Therefore when the market is doing poorly, I short it and make money while others are selling and losing money.
Again, I hope you enjoyed part 2 of “Investing now for the future, my personal strategy to ensuring an enjoyable retirement”. Join me next for part 3 Taking money from your future and your portfolio.
Feel free to leave a comment, I would love to hear about your experiences during the 2008/2009 market crash or how you invest today!
Disclosure : I am not a financial advisor and you should always consult a licensed professional before making any purchases in stocks or real estate.