What I Do With My Portfolio When the Market Panics
This week reminded me how quickly the market can make you question yourself.
The Nasdaq-100 slipped into correction territory, roughly 11% below its June peak, after the Dow dropped more than 1,100 points in a single session on the back of the Fed’s latest decision. South Korea’s KOSPI had it worse — down nearly 11% in one day, then a second straight circuit breaker, the first time that’s ever happened in the index’s history. By the time it was done, it sat close to 40% below its June high. The trigger was almost absurdly specific: SK Hynix posted its most profitable quarter ever and still missed estimates, and that was enough to set off a wave of unwinding in Korea’s leveraged ETFs, on top of growing worry that Chinese chipmakers are catching up faster than anyone priced in.
Then, almost as quickly, both markets bounced. The KOSPI’s reversal was violent — over 13% in a single morning, enough to trigger an upside trading halt, as SK Hynix and Samsung tore higher. If you only looked at that one session, you’d think the panic was over. Some of that bounce is genuine relief. A lot of it is just what happens when forced, leveraged selling finally runs dry — the bigger the bounce, the more violent the prior unwind, not necessarily the more conviction behind it. The Nasdaq’s move has been calmer by comparison, up around 3% on Thursday. Whether that holds is something I’ll only know once tonight’s US session opens.
Maybe the correction is over. Maybe it isn’t.
I don’t know whether this becomes something broader, or stays contained — Nasdaq’s story is really a Fed-and-rates story, Korea’s is two chipmakers unwinding hard. Nobody can honestly tell you which one wins out. What I do know is that this is usually the exact moment investing gets uncomfortable. You open your portfolio, see more red than usual, and stocks that felt unstoppable a few weeks ago are suddenly down 20, 30, even 40%.
Feeling worried isn’t the problem. Making a decision while you’re worried probably is — whether it’s the fear on the way down, or the FOMO on the way back up.
I realised I didn’t need another prediction about where markets go next. I needed something that would stop me from reacting to either the fall or the rebound before I’d actually thought it through.
Interestingly, my biggest dilemma this week wasn’t even one of the stocks that had fallen. It was Alibaba — the one position going the other way.
While most of my portfolio was under pressure, Alibaba had been quietly rallying on genuinely good news: Apple Intelligence got regulatory approval in China using Alibaba’s Qwen models, and a long-running US Justice Department case tied to Alibaba.com finally got resolved. The shares are still well below my average cost, but for the first time in a while, I caught myself asking:
Should I finally trim Alibaba, now that it’s recovering?
Then I realised that wasn’t really the question. The better one was:
If I were building my portfolio from scratch today, would I still want Alibaba to be my largest position?
Similar questions. Not the same question.
That’s what sent me down this whole exercise — instead of trying to guess what the market does next, I went through every holding using the same five questions.
The five questions
Most of us don’t really review our portfolios. We review the share price. Green feels safe. Red feels risky. But the price alone tells you almost nothing about the risk you’re actually carrying — a stock can fall 30% and still be a solid business underneath, and another can rise 50% and quietly become your biggest single risk, just because the position got too large without you noticing.
So I built something simple enough to apply to every holding the same way. Five questions, each scored 1 to 3:
| Question | 1 | 2 | 3 |
|---|---|---|---|
| Is the company still losing money? | Profitable | Marginal | Losing money |
| Is a lot of future success already priced in? | Mostly current business | Some growth assumed | Multi-year execution priced in |
| Does the investment depend on one or two things going right? | Diversified | Some concentration | Single product, customer or approval |
| Is it highly exposed to government or regulatory decisions? | Limited exposure | Some exposure | Heavy policy or jurisdiction risk |
| Would I buy the same position size today? | Yes | Smaller | No |
Add the five up and every holding lands somewhere between 5 and 15. Weight that by current market value — not what you paid — and you get a portfolio-level score.
| Score | How I read it |
|---|---|
| 5–7 | Relatively resilient |
| 8–10 | Moderate risk; worth reviewing |
| 11–13 | Higher risk; deserves more attention |
| 14–15 | Speculative |
This isn’t meant to be a scientific model. It’s deliberately simple, because I need to be able to use it while the market is moving fast and I’m not thinking as clearly as I’d like. Some of the questions are just facts — a company is either profitable or it isn’t. Others are judgement calls, and two people can look at the same valuation or the same regulatory risk and land on different numbers. That’s fine. The point was never to get the “correct” score. It’s to stop myself from judging a company differently depending on whether the share price happens to be up or down that day. And it has real blind spots — a profitable company can still be a terrible investment, and an unprofitable one can turn into a fantastic one. The score isn’t precision. It’s consistency.
What Alibaba showed me
Alibaba ended up scoring a 9. That didn’t surprise me. It’s profitable. It has several businesses across commerce, cloud and AI. But a lot of today’s excitement still depends on cloud and AI becoming much bigger than they are right now, and there’s always the China policy angle sitting underneath all of it.
But it was the fifth question that actually caught me.
I’d scored my US-listed shares and my Hong Kong-listed shares separately. Looked at on its own, each one got the same answer: yes, I’d probably buy this size again.
Then I realised I was answering the wrong question. They’re the same company. Combined, Alibaba is roughly 13% of my portfolio — my single largest position. If I were starting from scratch today, would I really put 13% into one name? Honestly, probably not.
That doesn’t make me bearish on Alibaba, and it doesn’t mean I should sell it. It just means the position is bigger than I’d choose to build today. Scoring the two listings apart let me answer a smaller, more convenient question. Putting them together forced me to look at what I’m actually exposed to.
What the weighted score revealed
Once I’d scored and weighted every holding, my whole portfolio came out at 9.54.
I thought that number would tell me what to do next. It didn’t. What was actually useful was understanding why it landed at 9.54 — and Alibaba is the clearest example. A 9 on its own isn’t alarming. A 9 sitting on 13% of my portfolio is one of the first things I should look at properly, not because Alibaba is a bad investment, but because a moderate-risk holding is carrying an outsized share of my capital. The score tells me where to look. It doesn’t make the call for me.
How I’m actually using it
These are my own rules. Someone else might use the same scores completely differently, and that’s fine.
5.0 to 7.9: I leave it alone unless the macro environment has changed drastically. No need to manufacture activity just because the market got nervous.
8.0 to 10.9: I start monitoring the higher-scored holdings sitting in this range more closely — latest results, valuation, whether the original thesis still holds. Probably nothing to do yet, but worth actually knowing that, not assuming it.
11.0 to 13.9: This is where I spend the most time — does the size still match the uncertainty? And am I quietly stacking several holdings that are really the same bet?
14.0 to 15.0: I need to question myself on why I’m playing the speculative game across so many holdings at once, not just look at each name individually. Not an automatic sell — just a much higher bar to clear.
I’ll also track the overall weighted score over time — not daily, that’s a recipe for anxiety, but every quarter, or in moments like this one when markets start behaving strangely. 9.54 isn’t good or bad on its own; that depends on my own risk tolerance. But if it drifts from 9.54 to 11.5 over the next couple of quarters, I want to know why. Did I deliberately take on more risk? Did my speculative names just get bigger after a rally? Or did I keep adding exciting stocks without noticing how much the whole portfolio had shifted underneath me? The trend, honestly, might end up mattering more than the number itself.
What I actually got out of this
I didn’t build this because I think a spreadsheet can tell me what to buy or sell. I built it because I know that when the market turns red — or snaps back just as fast — I’m going to feel like I should do something. Sometimes trimming will be right. Sometimes adding will be right. Sometimes the answer is that nothing’s actually changed, and doing nothing is the harder, better choice.
The score doesn’t remove the fear, or the FOMO. It just gives me something to do with either one besides react.
What it really did was force me to separate three questions I kept blending into one: is this still a good company, is it still a good investment at today’s price, and is it still the right size for my portfolio. Those can all have different answers.
Alibaba might still be a company I want to own. I might still think it’s attractively priced. But wanting to own Alibaba and wanting 13% of my portfolio in Alibaba turned out to be two completely different questions. Funny enough, that ended up being the biggest thing I learnt from this whole exercise.