Locked Out of My Account!

March 2023 Newsletter

I have been locked out of my trading account… again! This is not the first time, it would appear that even with today’s technology it’s difficult to ask for reliable service. To be fair, I am traveling in a van, in central Mexico, nevertheless, you would think that service continuity would be a priority for my bank’s service goals. All in the name of security, my trading account requires two-factor authentication, meaning that they need to be sure it’s me accessing my account in two different ways. My password (something I know) and a time-sensitive numerical code (something the bank sends me). This year, instead of having them send me a secret code via text message (not practical with our Mexican SIM cards nor safe) I opted to use TD’s own authenticator app, which basically spits out time-sensitive numerical codes that I use to open my account. That sounds good and it was working fine until the app spit out a code that my account did not accept. Ok, try it with a new code… buzzer sound! Locked out!

Fine, their technology screwed up. After 30 minutes on the phone with a TD rep, convincing them it was me, they finally unlocked the account. Great! This gives me the chance to reset my settings so that my account only asks for a secret code now and then, instead of every time I log in. After resetting everything, the app throws a “just want to be sure it’s you” message and wants to send a text message to the phone I do not have. Arghh! Locked out again.

So what is the point of this rant other than to say that I have no performance data to share with you? Interestingly enough, my situation is not the end of the world. Annoying yes, but not in any way terminal. The point is as I have said in the past, investing should be boring. If it’s not, you’re doing something wrong. The reality is that I do not make a lot of trades each year. The majority of my trades are to rebalance the portfolio now and then. The timing is rarely critical. I do know, that before the lockout, that I pulled ahead of the S&P 500 a bit, but since then, who knows?! It really does not matter, as I am quite comfortable holding most of my stocks for years. Many of my positions have been held for over a decade. I know statistically that the more you trade the lower your returns, it’s counter-intuitive but true. If by some weird technology fluke, I could not trade for an entire year, I do not think my performance would be hampered all that much. It’s a great portfolio question, are you comfortable with all your positions even in the event that you could not trade for a year or two afterward?

Why Trade or Rebalance at All?

There is an argument for building a portfolio and rarely touching it. However, the reality is that the benefit eventually works against you. As time goes by, you will eventually have positions that do super well and possibly become oversized in your portfolio. That is good news, but would you really want to hold one position with a 20% weighting in the portfolio, especially if it could be overvalued? Not likely, because your portfolio performance would be relying too much on one or two stocks. To reduce the volatility of your portfolio, it would only make sense to sell off some of the high flyers and buy something that has become underweight. Another example would be a stock that has run into problems and its future just no longer looks so good. Imagine holding Blockbuster while new streaming technology makes its way into the market. Holding Block buster till its demise is not necessary, leave that one to the speculators.

So What Now?

I will continue to harass my TD Direct Support Team until they finally fix this problem. Everything is much more complicated when not only out of the country but physically on the road and often in remote areas. To complicate things I can not even reach TD on the 1-800 number provided for unknown reasons and must call another TD Department so they can transfer me to the right office. The next step will be to go back to the original not-so-secure text message two-factor authentication approach using my Mexican phone. Hopefully, that will work.

Until then, I am comfortable knowing that a well-diversified portfolio will remain resilient for quite a while. The real frustration for me is more related to the “Hobby” side of things, in that I am unable to see what is happening to the portfolio on a daily basis. It’s similar to how some people like to play Wordle or the New York Times crossword puzzle every day. You sort of look forwards to it, it’s part of my daily routine. It keeps me thinking about new ways I could beat the market, or at the very least come up with new ideas that can potentially make me a better investor. I do admit that the forced break has its advantages; it has made me realize that investing is not the most important thing in the world and that it’s okay to spend my time doing other things, like eating tacos.

Looking Forward

Although I’m locked out of my account, I can still see what is happening in the market. There appears to be some banking weakness with some US regional banks. As I mentioned in my last post on cryptocurrency, the monetary system is based on confidence. So any weakness as it relates to the confidence of a bank is a big deal as it could very easily result in questioning the integrity of all the banks. Bank failures are rare and in the past required government intervention to ensure the integrity of the entire system. Weak banks were left to die to ensure a survival of the fittest. The government has to balance the need to keep the entire system running but at the same time, it does not want to be in the business of bailing out badly run banks. So I expect a period of much higher volatility in the markets with lots of weakness in financials for which I am overweight (Sigh). This also means that there could be opportunities to pick up strong financials at a big discount, so if you are low on financials, now would be a good time to consider such a move.

Marc’s Monthly Moves

Nada…still locked out.

Marc’s Portfolio Year-to-Date Performance

I really do not know. Sorry, you do not know how much this kills me. I think I am doing well… maybe.

Happy investing!