2022 NZX Stock Picking Comp

[Rawz]

I agree that we could easily slip into bear market territory, down 20% or more before, hopefully, some sort of recovery in the second half of the year.
Many of the heavyweight market darlings still have very stretched metrics for a rising interest rate environment and if the economy cools down with higher interest rates watch out, the bear could really go rampant ! Then there's how the Omricon outbreak will affect things.

I started the year with 60% cash and short term deposits, now 70%. Actions speak louder than words, that tells you what I really think regarding the near term prognosis for the market.

Wise Beagle- I am curious as to what you are looking for to get back into the market in a meaningful way?

Is there a certain % drop?
Some TA signal?
Fundamental analysis, like market P/E avg? Or inflation numbers, GDP numbers?
Is it stock specific?
Or is it just good old fashion gut feel when the time comes you'll know?

70% cash 30% stocks is certainly defensive.
I am 90% stocks, 10% cash. My strategy is to simply DCA into the basket of companies I hold to get me through 2022. I am fairly happy with my portfolio mix so no stress. One must be stress free and happy with their chosen path during these times.

[Beagle]

https://www.nzherald.co.nz/business/...M7WUGHGSANKWQ/

Not sure where to post this...but the title is World's largest wealth fund warns 'permanent' inflation will hit returns and its paywalled.
Except: The world's largest sovereign wealth fund has warned that investors face years of low returns as the surge in inflation becomes a permanent feature of the global economy. Nicolai Tangen, chief executive of Norway's US$1.3 trillion oil fund, told the Financial Times he was "the team leader for team permanent" in the fierce debate over whether the jump in rates is transitory or a lasting threat. Consumer price inflation is running at its highest level for more than two decades in the world's big industrial economies, in particular in the US, where the annual pace of price growth hit 7 per cent in December, up from just 0.1 per cent in May 2020.

Rawz. Everyone needs to develop their own plan for these extraordinary times. What is right for me at 60 given the very pleasing returns I've enjoyed in my portfolio over the years will be completely different for someone in their 20's, 30's 40's or even 50's.

To me its clear that we've enjoyed an unprecedented era of rising asset prices off the back of long term interest rates heading steadily down over the last decade and more recently from record amounts of central bank stimulus.

My sense is this is likely to be an exceptionally challenging year with Omricon, persistent high inflation, central banks around the world winding back stimulus, slowing economic growth and ongoing supply chain issues to name some of the headwinds.

Tell you a somewhat interesting story. I was watching CNBC in November 2021, pretty close to my 60th birthday and one expert on there came on and talked about age appropriate asset allocation strategies. Not a new subject to me by any means but a salient reminder that one's strategy needs to be tailored for one's unique situation and for the risks and opportunities apparent. The suggestion was that the amount of one's portfolio that is directed away from equities to more conservative investments such as bonds, cash and short term deposits should be roughly the same as one's age, e.g. a 20 year old might own 20% bonds and cash and 80% equities where someone my age should be thinking about just a 40% exposure to equities and so it became that I decided after a couple of truly exceptional years in the market I was feeling so content that I would take a very conservative position for a while, subsequently tweaked a bit this year. So far this has worked incredibly well with my portfolio overall inclusive of cash and short term deposits down just 2.5% in January against the NZX50 down just under 10%. I'm never happy about seeing my portfolio value go backwards but in the extraordinary month of January, (the worst start to a year I can ever recall) we've just experienced I feel I probably should be.

How long do I stay with an extremely defensive portfolio allocation ? First up, I don't think bonds are going to work either, (rising interest rates undermine the capital value of bonds so I am cash and short term deposits with that ~70%). I think its unlikely I'll still have 70% as extremly defensive by the end of this year though. What I'd like to see is how Omricon, higher interest rates, a much higher inflation rate and other headwinds affect equities as the year goes on and once we get some clarity around those issues and their effects and maybe the storm has passed by a bit I'll probably very gradually look to expand my allocation to risk assets on a case by case basis as deep value and a bottoming process emerges. TA is probably one's best tool here. Waiting for a break back up through, say the 30 day MA for a half sized re-entry position into a share and 100 day MA for the rest of that position are good risk management tools to ensure one isn't punting on the possibility the bottom might be in, but waiting to see it it is likely to be so and investing based on a new established uptrend.

You can probably guess that my strategy is built upon my belief that I already have enough to retire comfortably on so its currently about managing the downside risk in these turbulent times. More upside will come in due course but I am not in any way anxious to go looking for it.

Others will have a completely different approach in these times and there's no completely right or wrong answers, just what you believe is right for your own unique circumstances and goals.

[dubya]

I managed to find a free copy :

https://www.ft.com/content/10fc6f3f-...6-bb4a9d9afa0c

[winner69]

Feb off to a flying start …might look back at Easter and say what was Jan all about

[Rawz]

https://www.nzherald.co.nz/business/...M7WUGHGSANKWQ/

..

Rawz. Everyone needs to develop their own plan for these extraordinary times. What is right for me at 60 given the very pleasing returns I've enjoyed in my portfolio over the years will be completely different for someone in their 20's, 30's 40's or even 50's.

..

Great post Beagle. Really appreciate you taking the time to share your thoughts

[Jay]

yeah great post Beagle (post #92) thanks for sharing

[bullfrog]

Great post Beagle... but 60 is the new 40 apparently

[nztx]

Great post Beagle... but 60 is the new 40 apparently

Great post - Beagle

I still haven't worked out where those 20 years went

Oh to be 40 again with all the extra learned since

[peetter]

Hi All,

Still some pain happenning, but we have couple people in green this week.

https://1drv.ms/x/s!AghAKgaJuFZyjjrV...p6aZO?e=VFHxVj

Top 10 for week closing on 04/02/2022:

Rank	Username	Pick 1:	Pick 2:	Pick 3:	Pick 4:	Pick 5:	Summary	Percentage
1	Crackity	ZEL	GXH	MCK	CO2	IFT	50666.94622	101.33%
2	Evoman	ARV	MHJ	PGW	SKT	STU	50359.97082	100.72%
3	Bobdn	ASR	APA	USV	FNZ	EMF	50164.38828	100.33%
4	Dassets	SAN	TWL	WBC	ZEL	STU	50021.19428	100.04%
5	Waiuta	HGH	GNE	NZR	SPK	IFT	49730.43589	99.46%
6	Anthony read	NZX	AGL	ANZ	GBF	NZB	49645.82121	99.29%
7	Black Knat	NZR	RAK	HGH	PGW	SAN	49640.38888	99.28%
8	Whirly	APA	MMH	SCT	SKL	TPW	49503.63326	99.01%
9	worldwide	NPH	CVT	SCT	AFT	PHL	49403.29825	98.81%
10	Killdevilhills	ARB	CDI	HGH	NZL	WBC	49335.53365	98.67%

[Grimy]

Many thanks Peetter