Psychological Threshold: Portfolio Turning Red (Mid-January 2016)

Well, it's been a bumpy ride, but it isn't the worst that things could get. These last few months have been marked by volatile and declining markets, which have given me reason to slightly pause from my current path. However, since New Years the declines have accelerated and this past week of January 11, 2016 marked a turning point: my primary non-registered portfolio crossed over into the Red.

Leading up to the New Year my portfolio was in the green $10,000 then declined further as we crossed into 2016. By January 11 all the paper gains evaporated and on that first day it seemed fine with an overall ~-$100 loss. As the week wore on it accelerated and has now closed -$5,160.79. My other portfolios were already in the Red for some time, so they have not been of any surprise.

What does this mean? Having gone through superficially the Internet/Dotcom bubble and the 2007-2009 "Financial Crisis" there is a certain amount of fear in my mind of the potential declines. My portfolio and strategies have evolved since that time, but so has my experience. I discovered long ago that trading and timing is definitely not my forte so the route of passive income and growth was how I geared my portfolios. Hence, I've created my DRIP'd Report and 50K Report in order to keep track of my income goals and to stay on track.

A couple factor have added to some uncertainty; my extreme home bias and the declining CAD$. Both of which I will need to fix, although it is late in the game and buying USD at these low CAD rates is definitely not preferable.

Looking forward, I am absolutely expecting a lot more pain in the markets as it feels the declines within the peripheries of the global economy have crept deeper in the core areas. This Wednesday January 20, 2016 will be another Bank of Canada "Interest Rate announcement and release of Monetary Policy Report", it is expected that we move towards another rate cut. The BoC also noted they have in their back pocket the ability to do Quantitative Easing and Negative Interest rates. In their back pocket for extreme circumstances and regardless of whether they will pull those tools out; they are now in the back of our minds.