3 Lessons Learned From the Early 2020 Stock Market Crash (How I Would Have Invested Differently)

3 Lessons Learned From the 2020 Stock Market Crash (How I Would Have Invested Differently)


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How to build a quality monthly dividend income portfolio: https://youtu.be/hyFyXJcLbAM


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Lesson 1: Use of stop losses


Normally I'm a buy and hold kind of investor, but this where I missed out on some great opportunities to take profits.


A few investments I own strictly for capital gain purposes. Meaning I don’t hold them for cashflow. The idea is hold them, let them appreciate in value and sell them off take the profit and reinvest that profit into cashflow producing investments.


I’m still young so I don’t mind riding this thing out, sometimes doing nothing is the best strategy


just like if you are couch potato right now you are considered a very caring and selfless person during this strange times. Finally your laziness is paying off.


But in this instance I really wished I would have locked in a stop loss to secure my gains. That would have been the smart move. I got so caught up in the busy ness of life. I thought i’ll get to eventually, but not never did and it cost me some nice gains.


From this last crash we could see how difficult it is to time the market. In a bout 10 day time period the market lost 15% of its value. So if you were trying to time the right time to sell and maximize your upside we’ve been in a bull market market for the past 10 - 11 years so out of 520 weeks the market has been moving upward you your odds of picking the perfect time to sale would be 1/520 which is far less than a 1% chance if you think of that way.


Lesson 2: Less betting and more hedging :


Effective hedges during this crash
Long-term bonds
Inverse ETFs
Gold
Clorox
DLR


Lesson 3: 401(K) Falling out of love with the 401(K).