I am still positive on this and fingers crossed. If a portfolio had a maximum drawdown of 15 and an annual return of 10, then MAR 10/15 0. Well, we are seeing some good news or data on Covid-19 from South Africa and UK in regards to Omicron, do hope that this Omicron will be the last VOC ( Variant Of Concern). Will more loose monetary policy in China help to add some stimulus to some of the sectors which are still struggling like property and techs?ĭiverging monetary policies in US, China may provide some balance to global economy Will this crisis turn out to be an opportunity this tim e around? I really don't know, but again, make sure you do understand your " risk tolerance " and have a diversified portfolio if you want to venture into the HKG market. Having a diversified portfolio across different markets and sectors may help to mitigate such max-drawdown from certain sectors in your portfolio. I don't have a crystal ball to tell how and when it will recover or it may not recover at the end of the day, but you should know this is the risk you would face in investing in these tech stocks, from day one you pressed the "BUY" button.Īs we all know, the market always moves in a cycle and I still believe in " mean reversion" in the long run. I am sitting with a paper loss of more than -$100K as of now but I am ok to have the patience to wait and ride through this turbulence. NIFTY (you may consider any stock, bond etc.) and the. The program defines risk as a maximum drawdown rather than an a multitude of standard. OK, for me, no exception, I am doing as bad as the market, my max-drawdown is bout -39% for the tech stocks in my portfolio ( total Tech is around 12.3% in my portfolio). This is a very simple python function that takes the DataFrame containing the close prices of our asset i.e. Stock investing would be only profitable for the happy few. 5.98K Follower s Follow Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors. You can see that even Hang Seng Tech Index 3067 had a max drawdown of -50.4% from peak-trough and some like Alibaba is worse. ![]() Imagine if you have a very concentrated portfolio with just a few HKG/CHN Tech stocks in your portfolio, I am sure the psychological impact and stress will be tremendous by looking at your stocks mostly down by -40 to -70%. ![]() This, we are talking about the overall " market", for individual stock, I am sure the swing will be much higher, especially the so-called high growth/tech stocks. Exhibit 2: 1-Year Maximum Drawdown of Meme Stocks vs. Just look at the above chart, even at the market level, we can see that the intra-year swing of the market could be huge and at any year it could be as high as -20% to -30%, such intra-year swing is quite common. Despite meme stock mania having cooled, retail traders market participation continues trending.
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