Hey Guys,
The market had an enormous drop over the weekend. The drop was so big that at first I thought I was looking at the wrong ticker when I checked the market first thing this morning. The market went down 3.7% from Friday's close.
The market was already volatile before, but now the volatility levels are cranked up even higher. There might be extreme moves in either direction at any point. Just this morning in the first half hour of the day, I saw the S&P 500 go up 70 points, and then back down 50 points.
I hit five different stop losses on stock positions this morning, and just about everything in my portfolio got hit hard.
I talked at length late last week about zooming out my perspective in order to stay grounded, and that certainly applies again today. When I look at back tests in detail, they show periods with loss sequences like we're seeing now, despite the fact that the overall performance of back tests over time was solid. So drawdowns are a part of the journey, and I find it helpful to keep that in mind.
And by the same token, in back tests, even during drawdowns, trades continued to be taken. And since my goal is to stay in lock step with the back tested approach, that's why I took on more trades today when they set up. But it's not easy. It's one thing to see the results of a back test on paper. It's another to live through it. One of the things that makes it so hard is that there is very real risk involved.
In the main account, I bought stock positions for DHI and ALC as well as option positions for BX and KMI. In the options account, I bought options for PFE. In the double down account, I bought stock positions for BK and BXP.
If you have any questions or feedback, I'd love to hear from you.