After sharing the article about my 618k unrealised loss, some folks asked me, how can I sleep well and eat well, when I am losing this amount of money that can buy me a 4-room HDB flat in many estates in Singapore? So, in this article, I wish to share some perspectives on how I am coping with the losses and hopefully, it can help you in some ways too.
It Ain’t Over Till The Fat Lady Sings
If you have seen your investment portfolio drop by a substantial amount, which makes you feel like you are totally defeated, remember this:
As real as the situation/ warning/ total stock market collapse may seem, it has not happened yet. Our mind has the power to perceive that it has already happened so that makes us feel depressed. The stock market behaves in the same way too. It has the ability to inflate the share price of growth stocks to their future value based on hype and speculation. On the other hand, it also has the ability to absorb all the worst-case scenarios and bring the share prices to their knees.
So, until the day that the stock market totally collapses or the day when you throw in the towel to sell off all your positions, your losses will still remain as unrealised losses. If you buy into fundamentally strong companies and have holding power because you do not need the money in the next few years, you can wait it out for the stock prices to rise. There will be naysayers who said that strong companies like Apple, Microsoft, and Alphabet (Google) will never go back to their previous highs again, but how do they know for sure?
The stock market has gone through many crashes in the last 200 years but still manage to recover and reach higher highs after each crash.
What About My Growth Stocks? Are The Companies Going To Bankrupt Soon?
The high-interest rates, and slower growth recessionary conditions will definitely hurt growth stocks and may cause some companies to go bankrupt, especially if they are high on debt and not generating enough revenue for their business. However, it does not mean that ALL growth stocks WILL bankrupt eventually.
It is now a good time to understand the companies that you have invested in if you have previously bought them based on recommendations. Just do a search on YouTube or Google and you will see many articles trying to teach you how to value a company. If it is still too difficult to understand from scratch, you may want to search for the “Fundamental Analysis” of these growth stocks directly on these search portals and have analysts explain the business fundamentals of the stocks that you are holding to you.
What About My Options Contracts? Are They Going To Expire Worthless?
If you are in a similar situation as I am right now, where I am stuck of a 453k LEAPS CALL portfolio that is expiring latest in 2024, then let me share my thoughts on how I am coping with the possibility of losing all my money by 2024, whether I like it or not.
To put things into perspective, options contracts have expiry dates that are like ticking timebombs for options contract buyers because as time passes, the contract premium drops. The only way is for the share price to keep moving in the direction that the options contract buyer predicted (whether it is up for CALL options or down for PUT options), in order to make money off those contracts before they expire worthless.
For my situation, I came out with 3 plans to try to salvage something out of this portfolio but they each carry their own risks. In the worst-case scenario, I will have to part with this 453k and try to earn it back through other means. Having said that, there is still one year plus to go and anything can happen within this one year.
How Can You Eat Well And Sleep Well During This Period?
I know the feeling of being in a situation where your portfolio losses are increasing by the day, even if it is unrealised. With the recent fall after the FOMC meeting, my total unrealised loss now stands at a whopping 648.7k, up from the 618k that I shared in my previous article. This feeling sucks but let’s try to understand what is worse than losing money.
If you are too stressed up and it affects your mental health, you start to perform poorly at work, you fall sick more often or strain your relationship with your loved ones, then that is worse than just losing money in the stock market. There is a saying, “If a problem can be solved by money, then it is not a big problem”.
In a difficult situation like now, just as what happened in the pandemic where the world seems to be collapsing, we need to eat well, sleep well and live well. Otherwise, you will be like a frail and weak soldier who is going to the battlefield. The chances of dying in the battlefield is high because you are already defeated before the battle itself.
I know of a few friends and friends of friends who are currently suffering from late-stage cancer and to these people, if they can choose between losing health or losing money, I am pretty sure they will choose the latter. Without health, we are nothing. As someone who has been through cancer treatment myself, I priortise my health over everything. The worst place to be is to be broke and sick, you lose both material wealth and true wealth.
If you should need another example, let me share with you the story of a famous financial YouTuber called Adam. He has a YouTube channel, named “InTheMoney”, with more than 400k subscribers and he made really great videos teaching options trading. I used to watch many of his videos when I was learning about options trading.
8 months ago, he disappeared from the YouTube scene and only returned 7 months later. As it turned out, he was going through a very serious brain inflammation condition which turned his life upside down. He couldn’t do many of the things that he used to do and for a long time, the doctors couldn’t fathom what was wrong with him. He had hallucinations about the people he met (even to date) as their faces looked evil to him. You can watch his story being shared in the video below.
I am not some rich guy who thinks that 648k is peanuts in my total net worth. Neither am I bankrolled by rich parents. They are blue-collar workers who struggled to make ends meet throughout my growing up years. The reason that I am able to assemble almost a million worth of capital at the age of 40 is because I have worked hard and been frugal in my lifestyle.
I started taking vacation jobs when I was 10 years old, working as a food packer in my Auntie’s food stall. I took on various holiday jobs subsequently, such as working as a cashier in NTUC, working in a 5-star hotel delivering laundry for guests, giving tuition when I was serving NS, in Uni and when I was working full-time. I also sold fish as part of my fish-keeping journey and in recent years, sold a motivational book that I spent 6 years writing. Every penny was earned through my own effort and I feel the pain of losing them all.
However, I just want to get something out of this experience and be positive about it instead of wallowing in self-pity and pain. Every bad experience that has happened in my life has led me to better appreciate what I have now. For example, the sucky days of being confined when I was serving National Service and being constantly picked on by a nasty instructor made me appreciate my freedom and good bosses now.
The days spent in the operating theaters and hospital beds made me realise how wonderful it is to be alive and healthy. And if I were to lose the money that I have earned over the years, then I will hustle hard to earn them back again. As long as I am healthy and well, everything is possible. Maybe the early retirement plans would have to postponed but it may turn out to be a good thing after all. Retiring too early without nothing much to do can sometimes make a person lose all his drive and discipline.
Money is important in life but what is more important is your health (physical and mental). The road ahead may be rocky but in the right frame of mind, you will survive it and ascend to a whole new level. Many years later, you probably look back and thank life for giving you such a wonderful experience to learn and to grow. I wish you all the best and may you find something useful out of this sharing.
*** FREE RESOURCES ***
Keen to learn about options trading but do not wish to pay for expensive courses, this newbie guide will help gain the knowledge and fundamentals to understand options better. And it’s totally free!
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
I watched tons of videos on YouTube since 2020 and if you are wondering if there are any useful channels that you can subscribe to for learning market trends, TA, FA, check out this compilation here:
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
Want to learn more about Technical Analysis (TA) but find it difficult to grasp the concepts? This article brings you TA at a glance, and helps you understand key terminologies, indicators, and techniques used in TA to equip you with the knowledge that can empower you in your investing/ trading journey.
The Newbie Guide To Technical Analysis (TA)
Excited to start your trading journey or perhaps try out with a paper trading account to build your confidence in trading? Check out this step-by-step to help you get started:
How To Buy Options on Interactive Brokers (Step-By-Step)
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