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Post by Deleted on Oct 27, 2022 11:39:18 GMT
I thought it would be useful to start sharing any lessons learned over the last two or so years - since the pandemic stock market bottom. These will likely be highly individualistic, so please take as such and take from it what is useful to you.
For me so far as a pre-retiree looking for a certain amount of income over the next 30 years (fingers crossed):
1. An 85-15 portfolio allows me to sleep relatively well at night. I say relatively as this has been my first real bear market. So far the plan is working. I am primarily a dividend growth investor.
2. Diversification has worked well for me - I have 40+ holdings - and cushioned when one of those has not done well.
3. Concentration has also worked well for me, but is likely a double edged sword. 12% of my portfolio is in energy, 9% in AAPL. AAPL could have a bad day tomorrow. Only something I would do with high conviction.
4. Take capital gains when a stock doubles.
5. Sell losers and set a limit for that for other than US large caps. I did not sell BABA or COIN as quickly as I should have.
6. International, while a drag on my portfolio, is an allocation decision I made considering a long term timeframe. I will stick with it as I will with my allocation. The allocation is based on expected returns, income generated, and risk tolerance over the long run.
7. When a large cap has a paltry dividend increase, cut the cord. Wish I had done that with MMM this year. If VZ does the same, I will cut my losses. It usually doesn't get better and why take the risk. I am now flipping positions to decrease exposure in MMM - I bought a fair amount of CVX awhile back and now that MMM has moved up some 15% off its lows will sell some.
8. Monitor financials - particularly when there is a trend in poor earnings. META is the prime example for me - they went crazy spending this winter, faced competition from Tik-Tok and took a hit on advertising from AAPL. Cut the cord. I did and it was not easy for me to do. It will be easier next time and I have no doubt there will be a next time. I still had a good profit
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Post by Deleted on Oct 27, 2022 12:29:47 GMT
I have learned that it is good to have cash with higher rates. After January's market decline, half is in fixed income and half in money market. I have no interest in buying/collecting individual stocks or bonds, having done enough of that before. It's interesting to read what others are doing and why.
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Post by mnfish on Oct 27, 2022 12:36:11 GMT
I've been invested since the mid-90s (late 80's if you count CDs) in a variety of stocks and been through all of the downturns since. If memory serves, I was down more than 40% in 2000-01 and 2008-09. I'm hanging on pretty well in 2022 because of dividends and energy stocks. I do expect more bad days to come but am not going to cash. I got a little lucky in the 2020 Covid crash as I had 2 - Ally CDs come due in Feb and cashed out which allowed me to purchase a number of stocks (CVX, XOM, VNQ) at very good prices but I jumped the gun (FOMO?) this year on a few (META, DOW, C) and have to be more patient. As far as META, I will probably add to it. Maybe Zuck will eventually pull his head out of his ass and convince people he's not willing to risk the company for his vision. $42B in cash and only $9B in debt is worth something. No Int'l for me. Plenty of money to be made here. I usually think about trimming a stock when the cap gain is 10x the annual div. I've trimmed AAPL a few times but still have a large position.
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Post by win1177 on Oct 27, 2022 13:45:07 GMT
I thought it would be useful to start sharing any lessons learned over the last two or so years - since the pandemic stock market bottom. These will likely be highly individualistic, so please take as such and take from it what is useful to you. For me so far as a pre-retiree looking for a certain amount of income over the next 30 years (fingers crossed): 1. An 85-15 portfolio allows me to sleep relatively well at night. I say relatively as this has been my first real bear market. So far the plan is working. I am primarily a dividend growth investor. 2. Diversification has worked well for me - I have 40+ holdings - and cushioned when one of those has not done well. 3. Concentration has also worked well for me, but is likely a double edged sword. 12% of my portfolio is in energy, 9% in AAPL. AAPL could have a bad day tomorrow. Only something I would do with high conviction. 4. Take capital gains when a stock doubles. 5. Sell losers and set a limit for that for other than US large caps. I did not sell BABA or COIN as quickly as I should have. 6. International, while a drag on my portfolio, is an allocation decision I made considering a long term timeframe. I will stick with it as I will with my allocation. The allocation is based on expected returns, income generated, and risk tolerance over the long run. 7. When a large cap has a paltry dividend increase, cut the cord. Wish I had done that with MMM this year. If VZ does the same, I will cut my losses. It usually doesn't get better and why take the risk. I am now flipping positions to decrease exposure in MMM - I bought a fair amount of CVX awhile back and now that MMM has moved up some 15% off its lows will sell some. 8. Monitor financials - particularly when there is a trend in poor earnings. META is the prime example for me - they went crazy spending this winter, faced competition from Tik-Tok and took a hit on advertising from AAPL. Cut the cord. I did and it was not easy for me to do. It will be easier next time and I have no doubt there will be a next time. I still had a good profit Sara, Agree with most of your points. I differ as far as the selling when a stock doubles, I sell when it becomes “overvalued”, as defined by common measures of valuation. Also trim if it rises above 5-6% of portfolio (for an individual stock) for diversification reasons. If I had sold when a stock doubled, I would have been out of some of my best performers. I am leaning towards a 90% equity, 10% bonds/ cash mix. My 10% in “safe” bonds/ cash is enough to tide us over for several years (5+) in case of a severe downturn, so we won’t ever have to be forced to sell in a bear market. I can handle drops in market value/volatility. Diversification has also worked for us, down less than the market averages for the YTD. Have a few “drags”- VZ, MMM, INTC, NEM, but won’t sell them now. Just staying the course. Win
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Post by steelpony10 on Oct 27, 2022 13:53:10 GMT
I learned my lessons during Stagflation. This isn’t it yet.
If one is not going to panic I know buy and hold could eventually force me to sell depleted assets in retirement during market swoons reducing a portfolio quicker or I’d have to go into skinflint mode after a couple years for an unknown period to further slow down that free fall. Two choices. My opinion is all that other stuff doesn’t work in bad markets. I’ve seen it for real in multiple instances and in multiple families. There is no holy grail of solutions.
Also I believe this will be a long one since nothing has been addressed yet. So whatever a long one means to you. It’s 5-10 years maybe starting from Covid to me. There were 2 recessions during Stagflation and multiple market incidences from 1999-2010. What if inflation isn’t the big one and something else is? So label me paranoid, battle scarred or shell shocked.
Having a steady income slows the free fall if forced to spend down in any market and reasonable life circumstances. Think of a parachute. How big do you want that parachute to be? There was no way my parachute was ever going to be handled by Mr. Market or his cousin Mr. Lucky. I needed 3-4 parachutes also. Better safe then sorry. Lol.
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Post by Deleted on Oct 27, 2022 14:21:46 GMT
steelpony10 , Fair enough. But am really interested in observations for this downturn and how it was handled. For instance, as I recall we had a bit of a debate about whether to dump FB/META or not after its pretty horrible earnings last Winter. Is your son still holding? If so, what is the thought? To me, the earnings and nebulous and very expensive business plan for an unproved concept cemented that when you start having your moat materially attacked, might be time to bail. NFLX has done a good job at addressing the attack on its moat. TSLA has been an exception as well. Neither of those are spending incredible amounts on an unproven concept though - the metaverse. Also - CEFS - have you found this to be a good time to add? Is this the "sale" you have referred to as waiting for at times over the years, or not. Why?
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Post by Deleted on Oct 27, 2022 14:58:42 GMT
I have learned that it is good to have cash with higher rates. After January's market decline, half is in fixed income and half in money market. I have no interest in buying/collecting individual stocks or bonds, having done enough of that before. It's interesting to read what others are doing and why. Haven - do you have a plan or do you just make changes/decisions as you go along? I.E. What factors do you consider and do you feel you would or would not change your decision process going forward? Do you plan to re-enter equities (indexes/funds/etfs I assume)? Maybe you can share how you make that decision once you do.
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Post by Deleted on Oct 27, 2022 14:59:34 GMT
win1177, Understand about capital gains and the reason why I am stuck at taking just 20% out of the position.
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Post by Deleted on Oct 27, 2022 15:00:32 GMT
mnfish, Somewhat the same question as to Haven - anything you would do differently or not in a similar future situation?
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Post by Mustang on Oct 27, 2022 15:49:36 GMT
I've learned that the traditional stock/bond diversification doesn't work as well when the fed is keeping interest rates near zero. When they raise rates both sides suffer.
Nothing has changed enough to do anything different. And, its too early to have learned many lessons. I don't think its over. We still have 2023 to get through and I plan to keep doing what I am doing.
I might speculate on a couple of things. I think it will be a long time before growth stocks recover. With higher interest rates they are not going to reach P/E levels in the 30s or 40s. The more I hear the more I believe value stocks will take the lead. But, I think its too early to tell. If you ask me in a few years I will know more. I have pretty good hindsight.
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Post by Deleted on Oct 27, 2022 16:11:55 GMT
I have learned that it is good to have cash with higher rates. After January's market decline, half is in fixed income and half in money market. I have no interest in buying/collecting individual stocks or bonds, having done enough of that before. It's interesting to read what others are doing and why. Haven - do you have a plan or do you just make changes/decisions as you go along? I.E. What factors do you consider and do you feel you would or would not change your decision process going forward? Do you plan to re-enter equities (indexes/funds/etfs I assume)? Maybe you can share how you make that decision once you do. Be as it may, I usually plan, but as the saying goes, Life Happens. I especially like simplicity. There is too much volatility in the current market for my comfort. Some equity CEFs interest me, and I own a few in small amounts. I had planned to buy AIO in January, but fortunately that never happened. My most recent attempt was to buy CII, but the bid went unfilled. I might buy next year if the market outlook improves.
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Post by steelpony10 on Oct 27, 2022 16:52:46 GMT
@slooow ,
Well my kids are very well off in their own right. As far as META I remember my one son invested at $17. He’s only 40 now so that was in his 20’s sometime. I’m pretty sure all our kids are pretty much buy and hold investors so no thoughts on that. Another son has a whole ROTH account full of CEF’s all on his own accord. From emails I can tell he’s a neophyte in that area. My son in law owns his own tech company.
I did the individual stock route up until the late 90’s, early 00’s. That was the last equity failure I needed to see. As far as a sale, everything is on sale. From reading posts nobody had (s) a plan.
I dumped all available cash into CEF’s just before the summer rally this time. Basically we’re set through age 90. Realistically part of our afterlife is already financed. We’re probably just going to accumulate cash from now on. Financial security for me wasn’t brain surgery. I don’t understand the “handle” part. No matter what market conditions are practically speaking there is never again anything to handle.
Take your whole portfolio net value today and multiply it by 8% for example then take that income times 90-your age and you’ll see what I mean. So a bird in hand or roll the dice endlessly on a future unsolvable unknown just because. I backed off to about 50% of our portfolio for no particular reason other then that’s what I did with my mom’s portfolio in about 2001-2002 and to leave my wife a large cash allocation if I pass first along with investments in VTI and VWAHX on reinvestment.
So as far as your OP I had worked out the solution to this present situation in the late 90’s after the tech bubble (-50% drop) and before 9/11 (-30% drop), converted during the bank crisis (-30%? drop) added during Covid (-20%? drop) and now (-20%? drop). 75% of our holdings distribute free money from this point on from those early investments, meaning we received all the initial investment back already. That’s how we did it. Those 8% er’s are distributing 10%+ now so 72/10%+ = about 7+ years maybe to get that initial investment all back.
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Post by Deleted on Oct 27, 2022 17:43:36 GMT
steelpony10, Yes - it was the son who invested at $17 who was "loading up" after the face plant at the start of the year. Okay - understand - nothing changed for you.
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Post by Deleted on Oct 27, 2022 17:46:51 GMT
I've learned that the traditional stock/bond diversification doesn't work as well when the fed is keeping interest rates near zero. When they raise rates both sides suffer. Nothing has changed enough to do anything different. And, its too early to have learned many lessons. I don't think its over. We still have 2023 to get through and I plan to keep doing what I am doing. I might speculate on a couple of things. I think it will be a long time before growth stocks recover. With higher interest rates they are not going to reach P/E levels in the 30s or 40s. The more I hear the more I believe value stocks will take the lead. But, I think its too early to tell. If you ask me in a few years I will know more. I have pretty good hindsight. Well - please add any lessons learned as you go! Always want to hear them. I think we learned to stick to our plan and that has worked well enough.
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Post by Deleted on Oct 27, 2022 17:48:20 GMT
@haven ,
Simplicity is looking more attractive to me as well. That is a lesson learned.
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Post by win1177 on Oct 27, 2022 18:14:04 GMT
I've learned that the traditional stock/bond diversification doesn't work as well when the fed is keeping interest rates near zero. When they raise rates both sides suffer. Nothing has changed enough to do anything different. And, its too early to have learned many lessons. I don't think its over. We still have 2023 to get through and I plan to keep doing what I am doing. I might speculate on a couple of things. I think it will be a long time before growth stocks recover. With higher interest rates they are not going to reach P/E levels in the 30s or 40s. The more I hear the more I believe value stocks will take the lead. But, I think it’s too early to tell. If you ask me in a few years I will know more. I have pretty good hindsight. I’ve learned the same thing. When rates are kept “artificially low”, and then are raised (especially fairly rapidly), bonds will get creamed. 1. In the future, if we have a similar situation, bonds will be sold and kept in CASH. Wish I had done this earlier! 2. Also, be careful when trying to catch fallen stocks, you can easily get hurt! Examples are MMM, VZ, INTC, etc. I think they will (eventually) recover, but it may be awhile. 3. Mutual funds/ ETF’s tend to be more resilient when markets are volatile. Slowly increasing my amounts in mutual funds/ ETF’s. Win
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Post by FD1000 on Oct 27, 2022 21:58:26 GMT
The following is a generic post.
I will repeat what I have said 1000 times. What could help most investors and it doesn't take a lot of effort.
1) Be flexible. Markets may be similar but not equal.
2) Use limited number of funds, max 5. You can do it all with only 5 funds. It's easier to manage, and trade. Use cheap indexes + managed funds with wider range. Not a sector/country.
3) Use big picture analysis for your advantage.
4) How to do it? It's all in my (site) which is on the same network as this thread. After you go thru the process, it takes you maybe 2 hours 2-3 times annually.
5) Risk-adjusted return is the golden rule of investing. You can select funds with higher income (example: SCHD), as long as you follow the risk-adjusted return rule.
So, what does it mean? When you only have 5 (or less) funds and you keep changing these funds every 4-6 months based on risk-adjusted returns, you will stay within the best categories. History shows years of good/better performance within a few main categories, and US stocks should be your main stock investments.
You can't be too much behind. If you insist on being always diversified, you will lag.
1995-2000: US LC (SPY was just fine, you could use some growth too)
2000-2010: Value, SC, some international.
2010-2021: US LC, mainly growth (SPY was just fine, you could use some growth too).
2022: Value and high Div look good SCHD,HDV. Yes, you can hold just 2 funds for all your stocks and you will be OK. Why Buffett and Bogle can hold/recommend 1-2 funds for stocks and you can't follow it?
The above is a generic approach and can be accomplished by most investors, you don't care about valuation, bubbles, single stocks, the Fed, and 50+ other indicators.
Funny thing, several posters who followed the above, have been doing well for years. Some like to tweak it and use 8-10 funds, the main idea is to keep it KISS. You can decide to keep 3 funds forever (or many years) and play with only 2 funds.
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Post by Deleted on Oct 27, 2022 23:45:13 GMT
Okay - Let's go back to the OP question and revisit - what are lessons learned for YOU as far as what worked for YOU investing since the pandemic bottom? If it was you found the best way to navigate was to hold your breath or to be a receiver bobbing and weaving to get to the goal line, let's hear it.
I think we all should be secure enough to admit our successes and failures. That's how we improve. As I said - one of my main reasons I participate so heavily in these forums is many of you have helped me keep with my plan - by discussion, reassurance and challenges. I love to research and have learned a lot in engaging in discussions.
If you didn't learn anything through this sea change - good for you! You made it. Still more to come I think. Me - I learned beaucoup things about me, the market, and the economy.
My goals going forward are to avoid dividend cuts, too slow dividend growth, determining margins of safety better.
Edit - another thing I learned - I am comfortable with my strategy and don't plan to convert to another method.
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Post by steelpony10 on Oct 28, 2022 0:21:40 GMT
@slooow ,
I’ll also edit adding to what I know:
1. Barring unknowns that only affect our spending mostly, with an 8.7% SS raise next year coupled with an 8-10%+ income flow there’s going to be a larger surplus of excess cash to needs then usual. Although stimulus money and last this years SS raise led to the same result. If inflation begins to be tamed it will be even larger.
2. I have no idea about the direction of equity values, dividend growth, distribution cuts or conventional bond payouts. Hope is not an investment technique I ever ran across.
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Post by Deleted on Oct 28, 2022 0:51:01 GMT
@slooow , I’ll also edit adding to what I know: 1. Barring unknowns that only affect our spending mostly, with an 8.7% SS raise next year coupled with an 8-10%+ income flow there’s going to be a larger surplus of excess cash to needs then usual. Although stimulus money and last this years SS raise led to the same result. If inflation begins to be tamed it will be even larger. 2. I have no idea about the direction of equity values, dividend growth, distribution cuts or conventional bond payouts. Hope is not an investment technique I ever ran across. Yes, so you have learned to stick to a strategy where you don't have to know about those things - value, growth, cuts, bond yields. Very important lesson in my opinion - stick to what you know.
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Post by Deleted on Oct 28, 2022 2:47:34 GMT
Lessons learned - 1. Trying to predict what will do well in future is turning out to be fools errand for me. 2. Listening to other peoples or expert's predictions is worse. At least when I predict it is mine. 3. Assuming that markets know or have priced in what is known is wrong. It unknowable what markets have priced in. Markets may be efficient in long run but we will all be dead in long run too.
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Post by FD1000 on Oct 28, 2022 3:48:00 GMT
Yes, let's go back to the OP. I already gave one easy option.
Here is another one. Pay attention to the Fed, they are very influential. When they say several times they are going to raise rates to combat inflation, it is one of the easiest way to know you must sell a big % to cash...or...play their book, which is buying the Dollar and/or shorting bonds.
Here are more: when bonds + stocks don't do well + the charts are in a downtrend...you sell.
Here is another one: be flexible and try to learn other ideas. Most of them were developed based on something I read or heard on several forums and TV shows.
But hey, what do I know? I nailed the last 3 meltdown. If someone wants to stay ONLY in their lane, why ask?
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Post by Norbert on Oct 28, 2022 5:13:12 GMT
@slooow
"I thought it would be useful to start sharing any lessons learned over the last two or so years - since the pandemic stock market bottom."
The broad, sharp, panicked Covid crash of 2020 was quite different than the 2022 stock market action, which feels more like a slow correction of overpriced sectors, particularly in Growth stocks.
Lessons learned:
(1) Keep my asset allocation flexible in response to changing market opportunities and risks.
The Spring 2020 bottom was a fantastic opportunity to increase stocks exposure, as stocks were suddenly cheap, plus the Fed + Government told us that would act to prevent economic collapse. So, I went outside my usual conservative stocks allocation and was rewarded.
By contrast, valuations were high in early 2022, inflation concerns became real, and the Fed told us that they would be reversing their easy money policies. High valuations + tightening liquidity do not a happy market make. I went over 70% cash and bought some hedges. Still, I'm down over 3% ...
(2) Execute my convictions
Although I had an excellent 2020-21, it was a time to be even greedier when others panic, to use Buffett's famous advice. Ditto for 2022, when it was time to be fearful. I should have gone net short the market, but didn't.
(3) I'm too conservative, particularly when it comes to shorting the market.
I normally run a conservative portfolio and am pretty sure I have underperformed investors like Sara, Chang, and Win over the long term.
I consider myself a coward for not Implementing my convictions in January 2022. Although I did manage to preserve most of my capital, I lost to inflation and failed to profit by an opportunity handed me on a silver platter to go net short. It's probably too late for that now.
(4) There's are several roads to Dublin.
Sara, Win, and probably Chang don't (to my knowledge) make big changes to their asset allocation. They have high conviction in stocks for the long term, though do pay close attention to opportunity and risk on a company or sector level. They're not indexers, for the most part. They're willing to tolerate higher portfolio volatility than I.
I'm learning that excessive focus on portfolio volatility is a loser's game. It's smarter to focus on long-term returns, though that shouldn't necessarily preclude asset allocation changes based on changing market opportunities.
Fwiw, N.
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Post by Deleted on Oct 28, 2022 10:19:10 GMT
Yes, let's go back to the OP. I already gave one easy option. Here is another one. Pay attention to the Fed, they are very influential. When they say several times they are going to raise rates to combat inflation, it is one of the easiest way to know you must sell a big % to cash...or...play their book, which is buying the Dollar and/or shorting bonds. Here are more: when bonds + stocks don't do well + the charts are in a downtrend...you sell. Here is another one: be flexible and try to learn other ideas. Most of them were developed based on something I read or heard on several forums and TV shows. But hey, what do I know? I nailed the last 3 meltdown. If someone wants to stay ONLY in their lane, why ask? It sounds like you have learned a short term view works best for you in this environment. I have learned a long term view works for me and that my plan should work the rest of my life. Learning to listen to the Fed is a very good one. Every investor should be mindful of their actions and act accordingly. I have learned to listen and mostly disregard - personally. With rising interest rates though I did learn multiples do indeed contract - dramatically if high, valuation does matter, and in inflation, that bond holders pay the inflation tax. As I see dividend increases above inflation, I have learned (increased my conviction) that equities likely will outperform inflation in the long run. This environment has been a test lab of sorts for this concept. Being flexible and listening to ideas is good in all areas of life.
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Post by Deleted on Oct 28, 2022 10:31:48 GMT
@slooow "I thought it would be useful to start sharing any lessons learned over the last two or so years - since the pandemic stock market bottom." The broad, sharp, panicked Covid crash of 2020 was quite different than the 2022 stock market action, which feels more like a slow correction of overpriced sectors, particularly in Growth stocks. Lessons learned: (1) Keep my asset allocation flexible in response to changing market opportunities and risks. The Spring 2020 bottom was a fantastic opportunity to increase stocks exposure, as stocks were suddenly cheap, plus the Fed + Government told us that would act to prevent economic collapse. So, I went outside my usual conservative stocks allocation and was rewarded. By contrast, valuations were high in early 2022, inflation concerns became real, and the Fed told us that they would be reversing their easy money policies. High valuations + tightening liquidity do not a happy market make. I went over 70% cash and bought some hedges. Still, I'm down over 3% ... (2) Execute my convictions Although I had an excellent 2020-21, it was a time to be even greedier when others panic, to use Buffett's famous advice. Ditto for 2022, when it was time to be fearful. I should have gone net short the market, but didn't. (3) I'm too conservative, particularly when it comes to shorting the market. I normally run a conservative portfolio and am pretty sure I have underperformed investors like Sara, Chang, and Win over the long term. I consider myself a coward for not Implementing my convictions in January 2022. Although I did manage to preserve most of my capital, I lost to inflation and failed to profit by an opportunity handed me on a silver platter to go net short. It's probably too late for that now. (4) There's are several roads to Dublin. Sara, Win, and probably Chang don't (to my knowledge) make big changes to their asset allocation. They have high conviction in stocks for the long term, though do pay close attention to opportunity and risk on a company or sector level. They're not indexers, for the most part. They're willing to tolerate higher portfolio volatility than I. I'm learning that excessive focus on portfolio volatility is a loser's game. It's smarter to focus on long-term returns, though that shouldn't necessarily preclude asset allocation changes based on changing market opportunities. Fwiw, N. Thank you for sharing. I did make a big change to my allocation in that I had 15% bonds/cash when is used to be 2%. I learned I liked that and it helped me immensely psychologically through all this. Your comments on the forum are some that have helped me. In one you mentioned that as a 60 year old, I might want to protect my capital more. That will be a comment I use/consider when I look at my plan for next year to see if I should make any allocation revisions.
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Post by acksurf on Oct 28, 2022 12:58:26 GMT
I learned/realized I could potentially be closer to retirement than I had been thinking/planning. This resulted in me moving towards a more dividend/income oriented portfolio. I like the idea of steady dividends/income covering basic needs with growth covering the rest. I had been heavy in VTI/FXAIX. I am not sure broad indexes are the place to be going forward so am now focused more on ETFs like SCHD, VIG, VYM. As I make the transition, currently at 67% equity with the rest in cash and a little in bonds. I also re-learned I am not a great trader - partially because I travel a lot and go periods where I don't focus on what's going on in the market.
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Post by Deleted on Oct 28, 2022 13:11:08 GMT
acksurf , Would very much like to hear more about your plan and allocation. Do we have a thread for plans?
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Post by chang on Oct 28, 2022 13:13:09 GMT
Sara, Win, and probably Chang don't (to my knowledge) make big changes to their asset allocation. They have high conviction in stocks for the long term, though do pay close attention to opportunity and risk on a company or sector level. They're not indexers, for the most part. They're willing to tolerate higher portfolio volatility than I. I'm learning that excessive focus on portfolio volatility is a loser's game. It's smarter to focus on long-term returns, though that shouldn't necessarily preclude asset allocation changes based on changing market opportunities. I've made way too many cock-ups to be held up as an example of anything worth following. But Norbert is basically correct that I am mainly a B&H investor, who massages his portfolio a little from time to time. The biggest exception was bonds: I was late, but R48's advice to get out of Dodge was correct: I started selling bonds sometime in 1H2021, first PIGIX, then VBILX and DODIX, then everything. My bonds are still 100% in RPHIX, and I'm waiting for more certainty about Fed hikes, and maybe to see some big CEF discounts. While others seem to be stampeding back into bonds, I don't think I've missed any great opportunities yet. I also try not to obssess about volatility, as long as it's just volatility and not a trend (obviously this can be a major fly in the ointment). I don't understand obssession with the VIX. It seems to me that investing only with the VIX is under ___ (pick your number) is a sure way to minimize volatility and minimize long-term returns. My instinct tells me to invest when the VIX is over ___, not under. Anyway, the easiest way to avoid volatility, I have found, is not to look at your portfolio balance too often. Also, I keep my volatilile LCG in my IRAs, which has the longest time horizon and which I might never even tap during my lifetime, so it's easy to ignore volatility. I've steered my taxable in recent years to large cap, blue-chip stocks (US and foreign) with decent and/or growing dividends, high and sustainable ROEs, wide moats -- which often have low beta. I have made very few changes in the last three months, no movements more than 0.25% PV.
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Post by retiredat48 on Oct 28, 2022 15:14:46 GMT
At chang ,...who posted: "I've made way too many cock-ups to be held up as an example of anything worth following. But Norbert is basically correct that I am mainly a B&H investor, who massages his portfolio a little from time to time. The biggest exception was bonds: I was late, but R48's advice to get out of Dodge was correct: I started selling bonds sometime in 1H2021, first PIGIX, then VBILX and DODIX, then everything."--------------------------------------- Glad to have helped. The bond downturn in Q1/2022 was about the largest and swiftest in history. Even just sitting in Money Market Funds is now yielding about 3%. Edit to add: The lesson learned was to take advantage of the fed overstaying its zero percent interest rate policy...and selling bonds when yields at historic lows. That lesson today is to TAKE ADVANTAGE of the feds usage of its only tool to fight inflation, namely, raising rates, for which yields will go to unsupportable highs given a likely economic downturn. Lock in the yields, be it treasury or corporate bonds...and get longer dated maturities at some point. Not there yet. 2-5 yr treasury OK for now. R48
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Post by retiredat48 on Oct 28, 2022 15:20:13 GMT
chang,...note I edited above.
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