After Friday’s (10 June 2022) selldown because of a worse-than-expected CPI data release, my unrealised loss has increased from the previous -$576k (just a week ago) to -618.8k now.
If all these unrealised losses come from my shares whose value has dropped significantly due to the huge correction, then I am not too concerned, because I can still hold them until the market recovers.
However, in my top 10 losses on my portfolio, most of them come from my options contracts (see green boxes below) that have expiry dates.
That means, even if I am prepared to wait it out, these unrealised losses will automatically be realised when the contracts expire, somewhere between Sept 2022 to Jan 2024 (table below shows the different expiry dates of the contracts).
If the market does not recover by Jan 2024, my 453k LEAPS options portfolio (see table below) will turn to dust (though it is down by 90% currently). This means in my current 618k unrealised loss, 400k comes from my LEAPS options portfolio.
The LEAPS Strategy is a double-edged sword, while it helps to magnify my returns in a bullish 2021, it has now magnified my losses in a bearish 2022, as the portfolio is down by 90%.
Still Losing Money After 10 Years Of Investing?
I did a recap on my investing journey that started on 16 July 2012.
On 15 July 2021, after 9 years of investing, I made a realised gain of $113,383 from dividends and profits from selling my stocks.
However, towards the end of 2021, I realised a loss of $135,715 from all my poor-performing SG stocks that have dropped in value over the first 9 years of investing.
I then earned $267,894 off the profits made by buying SG banks shares on the cheap when the pandemic crashed the stock market in 2020 and the phenomenal returns from options trading in 2nd half of 2021.
So, if the current LEAPS options contracts expire worthless and my unrealised loss of $453,639 become real losses, I will still lose around 72,360.85.
So, after 10 years of investing and options trading, I would be so much better off leaving my money in the bank earning 0.5% interest per annum and letting inflation eat up my money. But, I will not lose 72,360.85 away for nothing.
Wait, Maybe There Is Still Hope
Even if it is confirmed that the market will continue to stay depressed for the next few years and that I would lose everything in my LEAPS Portfolio, that is going to happen only in Jan 2024 when all my options contracts expire worthless. Between now to Jan 2024, I may continue to gain more returns through the various means of investing or trading.
In another scenario, the market may recover if inflation is under control, interest rate hikes are halted, the war in Ukraine has ended or the supply chain issue caused by covid has finally been resolved, though that seems very unlikely now. All the FUD that we hear in every space seems to ascertain that the worst is going to happen.
Why Am I Even Sharing This?
Writing this kind of article certainly shows how bad an investor I am, and I am sure the haters are going to come in and say “See, I told you, this guy is an idiot”. However, I am not sharing my experience to please the haters. I just hope to tell people, friends, who have lost a lot of your hard-earned money (whether it is unrealised or realised loss) that you are not alone in this journey.
I am not sure if it is comforting to know that there is someone who has lost more money than you but I sincerely hope this article sends some encouragement to you. Remember this, the reason that you are able to lose this amount of money is not because you are foolish, the reason you are able to lose this amount of money is because you have made them in the first place (assuming you are not investing on borrowed money). So, there is every chance you can make it back again.
It is important to keep your morale high and evaluate what went wrong with your investment. Have you taken on too much risk? Or are you too complacent when times are good? And then think of what you can do moving forward. Can you salvage anything? Should you cut loss? What will be your new strategy to recoup your loss?
I think we learn the most when times are bad and that will help us become better investors/ traders in the years to come. We will gain money, lose money, then gain it back and then lose it again, and the cycle continues, but what we will never lose are our experience and knowledge. The harder you fall, the more you learn and the better you will become.
The last thing I wish to say is this, you can lose all your money but what you can’t lose is your health. There are many people who file for bankruptcy and then came back stronger to create their legacies, such as Walt Disney, Elton John and Donald Trump. But, if you lose your health, you lose everything. So, please take good care of yourself, and may the storm be over for you soon.
Sharing this quote that I really like. Mistakes do not define who you are until you give them permission to do so. Wish you guys all the best!
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The Newbie’s Guide To Options Trading
The LEAPS Strategy has helped me make more than USD120,000 in 2021. Here’s all you need to know about this strategy that can help you increase your wealth exponentially:
The Ultimate LEAPS Options Thread
Looking for ideas on what stocks to invest in or which stocks to trade? You can take reference from what I have been buying or selling. I try to update them as soon as I can in this section, as well as share my thoughts on executing these trades:
If the bear market in 2022 is making feel depressed as your stocks come tumbling down, read this article to find out how you can use options trading to help you claw back some of your losses as you await market recovery:
How I Do Earn Even When The Stock Market Is Bearish?
Also, check out my trading strategies in different market conditions, whether it is bullish, bearish or volatile:
How Not To Lose Money In Trading? | My Trading Strategies For Bullish, Bearish And Volatile Market
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My Secret Weapons For Options Trading: I Watch These YouTube Financial Channels Every Day
I concluded my first year of options trading with more than USD160k of gain, see how I do it and the capital I use for every month to give you a sensing of the percentage yield I get out of my gains:
1st Year Options Trading Recap: The Journey Towards SGD$217,509 Profits In 2021
This blog is as authentic and as transparent as I can share, I do not just show the wins and hide the loss. I have made some very bad decisions in the first 8 years of investing and paid a huge price for them. Here is the loss I have accumulated during these years. I hope you learn some lessons from my mistakes.
I Cut $135,715 Worth Of Losses In The Last 1.5 Months
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12 thoughts on “What Is Worse Than Having A Portfolio With $618,800 (Unrealized) Loss?”
Thanks for sharing. Our experience is similar and we agree wholeheartedly with your comments!
Thanks for getting in touch, we will survive this and become stronger and better after this whole episode is over. Chin up and keep going!
kudos for sharing losses. lost my 2021 gains as well, stay strong too brother
thanks bro, appreciate your comforting words, most of us have returned all the gains in the past 2 years back to the market. But, the road is still long ahead, we can make it back again!
stay strong man. it is not easy to see and stomach im sure but as you said, you are not alone. rooting for you
Thanks man, together we will come out of this stronger!
Yield chasing mentality is the death of retail traders. Hard to comment more – u can take a look at my twitter Ginzabike if you want to get a sense of how professional traders trade. There is no shame in losing trades, only in letting them get beyond you.
Thanks for sharing your thoughts, will go check out your Twitter page too 🙂
Thanks for sharing Jason,
It must feel very tough to stomach the losses, but things will always find a way of resolving itself .
In 2008s , I bought Centro REIT , loss an entire stake in GNC when it went bust , lost some more money in Tailored Brands when it declared bankruptcy.
I began to doubt and feel I failed as an investor, went to relook at my methods and risk tolerance. Refined my methods and also relooked at my spending and saving habits , making small gains and smarter choices around the way .
All these add up , and while I might not have made up for my past mistakes, I am sure going forward , my new game plan and ability to relook and cut down expenses and increasing personal financial management skills as well as knowledge on accounting gained from looking at my past mistakes logically instead of regretfully . All these will add up and make you a better investor.
Wishing you wisdom and fortune going forward.
Wow…thanks very much for leaving an encouraging note and for sharing your experience. I am sure you have grown stronger and better! The investing runway is still long ahead, I am sure this experience will serve you well in many years to come. All the best, Bro!