Max’s Market Correction Tactics (I’ve Got a Black Eye)

On Wednesday, I stared at my laptop as the market dove to a close at 3pm CT in annoyance and dismay. Ugh. Another down day. In fact, the Dow and S&P 500 dropped 5.7% and 5.9% last week, respectively, while the Nasdaq pulled back 6.5%. Headlines on March 23 read:

• Dow sheds more than 1,100 points in two days as trade jitters rock Wall Street
• Dow Dives 424 Points as Wall Street Assesses Potential Trade War
• Dow drops more than 400 points into correction, posts worst week since Jan. 2016

Max’s Black eye – Love, Da Marketz

From the S&P 500’s high on January 26th, the market’s fall almost reached 10% Monday (3/26). Ten percent. TEN FRIGGEN’ PERCENT! Ugh. As you can imagine, my equity holdings – the majority being in my 401k – took a five-digit-dive. The misses’s assets also stumbled.

Another casualty in this was my options account. I was set to write a post about achieving 27% returns using options… And then the market fell, specifically Tesla. TESLA why? It fell from $380ish to $250ish. My account value fell over 40% – from $6,350 to $3,680. *Insert Scream*. Losing almost $3,000 is likely to scare away most people from continuing whatever strategy is being pursued. But I’m either hard-headed, stupid, or both. I had to readjust my short puts a couple of times losing a few thousand in a week! ugh. Fortunately (hopefully), I’m sticking with it and made it back to $3912.38. I’ll let you know how the recovery goes (monthly update coming over the next few days!).

Max’s Cold compress for speedy recovery

I continued to deploy strategies I could outlined in this post.

1. Options: As stated above, i’m continuing to pursue my options strategy.
2. Strategically timed contributions:
   • Two rounds of $500 went in to our HSA.
   • Fortunately, a $3,900 contribution to my Roth IRA was on hold from Vanguard. This was less “strategically timed” but I’ll take it. Funds went in today and made a quick $53.
   • I called up my mom and made her throw $4,000 in the market.
3. Automatic contributions: Roughly $7,800 went into the MOREs Retirement accounts.

Despite this super sad market, I must remind myself that the market hasn’t fully recovered from last week and the market may continue to fall. It may fall when home sales fall, when consumer confidence falls, or if/when Trump falls. Who knows However, it won’t fall forever. Every time it does fall, I always tell myself I should throw money in. It’s always hard to do. But as I act on this advice more and more, I get more comfortable buying low.

It’s  like Bill Murray waking up to the same groundhog day *so put your little hand in mine…* orrrrrrr… Like Marty McFly took me back in time machine giving me the opportunity to invest MORE into the market. So how far back did we go in the Delorean? The S&P is roughly where it’s at as of 4 months ago – 12/1/17.Image may be NSFW.
Clik here to view.

GREAT SCOTT! Get in, *Insert your name here*!!!

Image may be NSFW.
Clik here to view.

The universe is telling me “Hey, I’m waiting for you to get on this rollercoaster. Don’t waste it!” I didn’t and I won’t. You shouldn’t either. Today the market close the end of the week/quarter with an up tick of 1.38% for the day. So remember:

1. Keep investing automatically – raise the contribution rates if you can.
2. Invest strategically when the market takes BIG dips.
3. Reallocate to get more aggressive when you can.

Lastly, when a crazy scientist named Emmett Brown with a Delorean pulls up, get in the car. You know what to do.

Godspeed!
-Max