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  • #61
    Originally posted by ENT Doc View Post
    I’d like to ask whether or not anyone is looking at the current situation in a positive light? Not from an epidemiology standpoint. But strictly financial. Cases in China are dropping, factories are going online. People here are freaking out. The downsides of this disease are terrible. But those things are beyond our control. Is anyone else looking at this as a massive buying opportunity? Best time to buy is when others are going bat $hit crazy. When did we forget this?
    I was really happy yesterday! Felt guilty for feeling that way. Buy yeah, toilet paper from costco..........wow........people are really rational.

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    • #62
      Originally posted by Dont_know_mind View Post
      Potential problems with the plan I see:
      1. You do not act and do not allocate and remain too allocated to cash compared to your long term preference
      2. Behavioural errors - eg you miss -30%, it rallies, you have FOMO and allocate at a higher price (eg-25%) point than planned, a sort of slippage
      3. It goes down more than 40% and you can’t buy as much as you want at say 50% or something
      4. You end up in ICU as a patient and can’t press the buy button.
      5. The negative performance drag from cash is not compensated for over the cycle with your strategy somehow.

      In case of 4, I have given wife instructions.

      I think you were too early to refi fixed, but if it probably doesn’t matter much.
      Thanks!!!!

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      • #63
        Originally posted by Tangler View Post

        I put in 40k yesterday. Felt like I won the lottery and then I felt a little guilty because old/sick/immune compromised folks will get sick and do poorly.
        Weird. You clearly have forgotten about the rest of pain and suffering and income inequality of the world....

        Comment


        • #64
          Probably the main risk is listening to random people (like me) on the internet who don’t know your particular situation or preferences or you well enough to be able to improve your POV.

          You know you better than anyone else, so figure out where you can slip up and try to plug holes in your plan. Visualise it, rehearse it a thousand times, then do it. I guess if you make a mistake, there is always the next cycle.

          Btw, your plan sounds quite reasonable. As you are starting from a conservative AA, and not using leverage, you have more margin for error.

          My strategy has a higher % risk asset setting over the cycle and employs some leverage/debt, so I am only willing to forego a cash buffer for quite extreme swings. I would be quite happy for the settings to deploy cash to never be hit and my performance would be better if they weren’t.
          Last edited by Dont_know_mind; 03-13-2020, 05:26 AM.

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          • #65
            Originally posted by Peds View Post

            Weird. You clearly have forgotten about the rest of pain and suffering and income inequality of the world....
            Not sure what this statement means.

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            • #66
              Originally posted by Zaphod View Post
              This is a tough situation, and ultimately pointless. This is a massive, coordinated, shut down of the global economy. I am trying to think of it as a large one time incurred expense for companies. Then there will be some drag as things do not get back to normal immediately, then poor numbers will start in, etc...highly likely we hit a recession on a technical level (that is, growth contraction), though I hope in a qualitative fashion its not noticed or felt.

              Some of this is definitely priced in now, nothing is rational and prices dont ever have to make sense, aka could be better or worse and we could have seen the bottom already, even if reality worsens.

              At some point depending on your time frame, it doesnt matter and this is an excellent opportunity. Load up, forget your password and check in a couple years.

              As far as market swings, we hit 76 on VIX yesterday, just shy of an all time high close during the GFC. You can expect absolutely meaningless swings of the market in the 5-6% range, they are of no informational value. Could be up 8% today on fatigue, down 5% monday on 'jitters'.

              I will say I have hope given the US local response and things getting shut down that we are going to significantly bend the curve and decrease our issues with the virus, yes some areas are already hard hit, but we're starting to take action and it will help meaningfully.
              I’m surprised it’s not majority priced in that there will be a technical recession.

              Say your average country is in lockdown for 2 weeks. That is 5% GDP. And if the lockdown is 4 weeks with a phase in and out, that is a very large transient GDP effect, which we started to see in oil even before the OPEC meeting.

              Whether we have further declines depends on how the virus things pan out and whether anything systemically important was broken in the volatility storm. It could be over I guess, but I doubt it. If it does shake it, like after the Asian financial crisis then things could seriously melt up with too much liquidity.

              An interesting thing is that we haven’t had major dollar strength so it doesn’t really feel like we have had risk off yet. I don’t recall a crisis which didn’t end with the dollar getting super strong. It’s sort of missing and I wonder why. Or maybe it hasn’t happened yet.

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              • #67
                I was thinking about it more today and I think much of what has been happening to date has been from financial market professionals. I don’t think the mainstream has gotten around to doing anything yet so it will be interesting what happens.

                Back to Tangier’s query: your main risk is that you fail at being an active investor.

                “In real life, most people trying to be passive investors fail to achieve the average returns because they fail to be passive. They slip into active investing, and do a terrible job of it.

                So, the "worse than mediocre" returns that you see in passive investing are actually caused by active investing.

                To be successful at active investing requires knowledge and skills that are not needed for passive investing.

                Both benefit from patience and discipline. But, passive investing will also benefit from neglect. Active investing requires attentive action to navigate the shifting market environment. Truly passive investing ignores those shifts.

                Most people who are active investors fail to achieve the market average. Those active investors who do beat the average mediocre return are utilizing skills and knowledge that most investors do not have.

                Passive investors generally fail when they become active.”

                Index investing is the rational default though, but combining the 2 requires you become an active investor first and then become passive. Perhaps you could start passive and learn active. I haven’t heard of that much though. More common is : fail at active, learn how to be good at active, learn passive.

                Good luck

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                • #68
                  Husband came home last night saying we should invest in ---(drum roll)---

                  Apple

                  ....in 3 days.

                  I asked if "some guy" at work gave him that advice. He said no rather defensively so my guess is either his buddy with a strong penchant for gambling, or his dad who knows way more about investing than I ever will but mostly holds cash.

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                  • #69
                    Maybe it's because I just started my career and have a long time horizon, but I'm finding out that I definitely have the stomach for risk and dropping portfolios. Currently 90/10 in my 403b/457b and 100/0 in my Roth accounts and watching the indices every day hoping they keep going down. I have 2020's Roth ready to deploy, but I haven't pulled the trigger yet, expecting more drops.

                    Browsing Bogleheads, it's surprising how many people are failing to stay the course. Also perusing r/wallstreetbets and reading about options trading out of curiosity about a wholly different world of equities.

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                    • #70
                      A purchase today is a better purchase than any made through 2016-2020 thus far. So, if you don't feel having invested money in the last 4 years was a mistake, doing so today is not either.

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                      • #71
                        Originally posted by ENT Doc View Post

                        Not sure what this statement means.
                        Same! What?!

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                        • #72
                          Originally posted by Peds View Post

                          Weird. You clearly have forgotten about the rest of pain and suffering and income inequality of the world....
                          Sorry, ........what?

                          Comment


                          • #73
                            I think another problem is that people compare active investing with the model for passive investing.
                            What proportion of passive investors are able to get an index return ? I would posit very few. Many passive investors fail and so do many active ones. It’s just more obvious with the active.

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                            • #74
                              Originally posted by Tangler View Post

                              Sorry, ........what?
                              sorry, i just didnt understand the sad sentiment for investing your hard earned money compared to a viral pandemic.

                              Comment


                              • #75
                                TLH a lot. Got more than the $3,000 I can subtract from ordinary income.
                                Many of my stocks are down a lot this year. Large-cap -18%, International -33%, Emerging MKT -22%, Small-cap -34%
                                Adds up to several hundred thousand lost. I'm disappointed, but not selling. So not "realizing" a permanent loss by getting rid of shares. I guess that means I can handle this level of volatility.
                                I don't change my IPS or asset allocation based on market price.

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