The last few months have been pretty crazy for the neophyte investor (I suspect it hasn’t been all that much fun for experienced investors either). Our portfolio is currently worth about $30k less than what we paid for it, although if we count our gains from the bonanza that was 2021, we are down close to $50k.
That’s a lot of money!
What has helped is the knowledge that this is a good think for anyone in the accumulation stage and that this will be temporary. Also, dividend payments were announced today and…wow! Biggest payment we ever received!
Bull markets make you rich (and a bit anxious)
Several friends and colleagues got their start investing this calendar year and it has been interesting how different the reactions have been to the recent volatility. I have heard several people exclaim how much they have lost (despite the face they haven’t actually sold…) and that they would now wait until the market rises again until they put any more money into it. Little will persuade them that this is a natural part of the process. That said, I’m not spending much time doing any persuading.
I’ve found it comforting that some have repeated more realistic mantras about stocks being on sale and the upsides of accumulating through a price dip. Taking the academic perspective is straightforward, but taming the emotional perspective is hard! I know that this is a good time to be investing and I know that the market will recover and rise in the future. It only takes the edge off the feelings of loss one gets when you see your balance about $50k down from 6 months ago though! I hope that this is something that will get easier over time. While Shortbread finds it easy to never check investment numbers, I’m the sort that checks most days. I think this might make it easier to take volatility in my stride in the future – I’ve seen gains and losses so much that it has stopped registering so emotionally.
I’ll say it here for my future self to reference: If you are worried about bear markets have a look at a fund’s growth chart. If you’re still worried…zoom out! If you are still worried after that, you might want to consider another path.
Divi-damn, that’s quite a lot!
Dividends have been announced today and it’s pretty good news. This is easily the largest dividend payment we’ve ever received. I was a bit worried that dividends would be cut in the face of the market decline, but this hasn’t really been borne out. I’m particularly impressed by our global fund – VWRD. The previous dividend at the end of Q1 2022 was $0.33 per share, with it hovering between that and $0.58 for several quarters prior. This quarter will pay $0.84 per share! We were predicting roughly $750 – $800 for this quarter as dividend income, but we are stoked to be receiving closer to $1230!
Again, academically this is probably bad news. Companies giving away part of their value isn’t going to help their profitability in the long term. However, the emotional side of my investing brain absolutely loves dividends. It’s not free money, I know it’s not free money…but it emotionally feels a bit like it! It doesn’t hurt that we live in a jurisdiction with no tax on realised capital gains or dividends. We will, of course, be reinvesting these dividends but it still feels pretty good to receive them.
I’m not sure if I had a particularly clear message or point in this post, but figured it was worth marking being near $50k down for the future. We’re still buying and we’re still holding! The dividends also feel nice, logic be damned.