Investment

Financial Responsibility

I've a separate retirement account and a fun account. The former account is invested in boring ETFs and bonds to hold forever. As for the latter, it isn't a big deal if I lost it all.

I also only allocate a few percentages of my portfolio for every risky play. So a single loss won't wipe my entire account. On the flip side, I'm not going to get rich any time soon.

Lessons

  • Follow The wheel strategy loosely. Roll for credit (never debit) or let the shares be called. If opportunity cost is great, let shares be called and use the funds for other plays. Rolling means closing a position and opening a new one; they are independent plays.
  • There'll also be ups and downs. As long as I manage my risks properly, I hopefully can live to fight another day.
  • It isn't worth it to do this full time; the profit is below minimum wage.

Plays

Beware: Survivor Bias belows.

These plays aren't investments, it's pure speculation at best and gambling at worst.

UPRO/TMF 55/45

I found about this through the subreddit; it was originally posted at bogleheads.

I invested most of my fun account into this play at the beginning of 2020. In March 2020, it was down by 30%. Luckily I didn't abandon the strategy and I also kept buying UPRO as it went down. I also did some re-balancing during that time, sold TMF and bought UPRO. Since then, it has steadily recovered. As of January 2021, it was about 20% up.

Retirement

My portfolio allocation is currently 55% SPY + VTI, 25% VEU, 15% BND and 5% cash + fun plays.

During March 2020, I sold a bunch of VTI and bought SPY to take advantage of tax-loss harvesting. At the time, I didn't know about about SCHB or ITOT and the performance difference between total market index and S&P 500 is small so I decided to buy SPY. I also considered VOO but I wanted to sell covered call so SPY was more liquid.

Hopefully at some point in the future, I can sell SPY and buy back into VTI to simplify my allocation.

Similarly I was holding VXUS and moved to VEU. Since VXUS has small cap companies, I also want to move back to it.

My planned portfolio is 55% VTI, 25% VXUS, 15% BND, 5% cash + fun play.

Random thoughts

Robinhood

I watched an interview about the increase in collateral for GME. On Thursday 1/28/2021, DTCC raised rate significantly; many brokers including Robinhood halted purchases of shares to protect themselves from liquidity problem. Robinhood had to raise money from investors to resume limited trading on Friday. Their blog post went into more details about that.

Their PR was bad, making their customers believe that they conspired with Citadel to protect hedge funds. But I think they'll survive and thrive despite that.