A Twitter Poll

Yesterday I carried out my first poll on Twitter and received more responses than I thought I would. Thanks to all those who participated and RT’ed so as to reach more members.

How much of your Net worth is invested in Stocks (Direct / Mutual Funds / others combined). Please RT.

— Prashanth (@Prashanth_Krish) December 25, 2015

The outcome was interesting. The results were pretty much spread across the options. I do hope that most of those who voted based their calculation on the Liquid Net worth (especially those who voted for < 25%). My own exposure to stock markets is currently > 200% of my Net worth thanks to availability of Leverage.

Before you gasp as to whether I have bitten more than what I can chew, let me clarify that unlike a housing loan where one cannot get out of leverage easily, I can easily reduce my leverage to a more manageable limit (heck, if I go short, I can actually go to less than 0% exposure to markets).

A quote / phrase that I often see repeated by many folks says and I quote “Only invest what you can afford to lose”. The assumption here is that even if you lose what you invest, you can go along with your life as if nothing much changed. While I can agree with this quote if you are going to Las Vegas for example, its stupid to employ the same in markets. Yes, there is volatility which means that losses will be there for sure but if you don’t risk, you don’t win. It’s as simple as that.