Well,
This is what following these rules have looked like recently:
That's value of our largest broker account over 3 years. As you can see the recent crash has taken the aggregate value of all stocks in that portflio back to levels seen at end of 2018 and early 2017.
Some are still above 100% the buy price, but some have sank 50% of the purchase price. And the rest are in between these extremes.
Whatever time I have currently to spare to following market (and that's very little considering the exceptional situation we all are exposed to), I spend not focused on the daily swings of the market, but to the quality and financial condition of the corporations we continue to be invested in.
As Benjamin Graham has said and lately most famously echoed by Warren Buffett:
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
My experience with stock market crashes like this, 1999, 2008 and many more smaller ones is that market will overshoot both directions and it's close to impossible to find the top or the bottom. This is not to say I haven't made a lot of changes to the portfolio - I have. The point is that I make sure we are 90-100% exposed at all times because one day this craziness ends and markets correct very rapidly. We have stocks where the daily swings to both directions might exceed 15%. Missing few upward swings would be really bad especially now that we have taken the ride all the way down.
Rising tide will eventually lift all boats. The trick right now is to stay away from the boats that might sink and stay invested in the ones that will be there also very likely in 10-30 years.
Good health to you and your families and friends.
Stay safe.
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