As has been discussed in the other thread with @Jil, the upcoming rate hikes may lead to pain in the stock market. I have really been inspired by so much of the discussion in this forum and I have learned so much from you all, which leads me to share something like this.
I have been working on this personal plan since I had my “panic moment” that the market was about to crash a week or so ago. It was a wake up call for me. I wanted to share my plan and learn what others are considering too.
The main theme is that I am moving cash to the sidelines and out of the stock market. I work for a company that gives me RSUs so I can’t help having a large chunk “invested” in stock already. I’ve decided that’s enough exposure to the stock market for me.
Note: I’m sure no one will follow this since there are far more knowledgable people to listen to in this forum, but wanted to be clear this is NOT financial advice! I operate mainly on intuition and reading lots of news, which has worked for me personally. I welcome feedback!
- I sold a bunch of stock last week and am selling almost all the remaining stock I own once I hit LT cap gains in early April. It’s time to say thank you very much and lock in gains. (I considered selling now and offsetting gains with crypto losses but it’s a bit complicated with alll the trades I did.)
- I’m keeping 6K of match group stock, 2K or so of PCG since that’s a dividend based stock (and I’m curious to see what happens with the wildfire stuff), and 2K of stitchfix for sentimental reasons (female founder all the way to IPO and am excited to root for her in a downturn!)
- I will sell my company stock when it vests each quarter and immediately after I do discount stock purchase.
- I will keep 10K of Amazon stock I have in my Roth IRA.
- My 401K is currently 70 percent tracker funds and 30 percent bonds. I will move it out of stocks completely. Maybe to bonds? Am not sure. I took finance classes in college and studied this exact thing (bonds in a recession) but I remember embarrassingly little.
- I’m going to get a home equity line of credit for my primary residence. I plan to leave this untouched but I want to have it available. I’ve heard a heloc can be taken away but I’m not sure how likely that is.
- My sf investment property has 3 years of fixed rate left on its ARM at a rate of 3.25%. I need to make a plan for this one. I will probably refinance into another ARM if that’s cheaper at end of the 3 years.
- I don’t enjoy thinking about this category because while I am still up it’s dropped a lot. I have decided not to think about it until May and then execute a tax optimized selling plan that will leave me with 5-10% net worth in crypto.
- I will continue to keep some cash in pound sterling as well as dollars.
- If the stock market overall falls a certain percentage, I plan to buy defense stocks to hedge against a potential war. I find this idea extremely depressing so I might not do it. I’d also buy back a bit of my match stock back if there’s a fall (people still date during a downturn!) I need to decide on an entry point. I also like Amazon stock and maybe some Tesla when it first goes down. I can imagine Tesla pivoting to doing some military work in a war situation. I need to read up on Elon’s philosophy more.
- If ww3 doesn’t seem imminent but contractors become cheaper in a downturn, I will use some of my cash to improve my sf investment property and primary home. I would like to paint, improve the kitchen, maybe even add some windows.
- plus TBD
- My home is in a desirable sf neighborhood for Airbnb yet I’m often traveling for work. As an experiment I am going to rent it out for 10 nights this year to get about 5K tax free which I will add to my cash holdings. It will also help me become comfortable with this idea for the future if needed.