Investing: Excitement to Boring

[Dicast]

I've always been very interested in investing.  My first real exposure and what really got me interested was the collapse of the dot.com bubble and specifically Enron pushed me in deeper.  I'm not quite sure what it was about everyone losing so much money that drew me into the stock market but I knew it was the place I should go.  I started investing in stocks in 2002-2003.  I spent the first year watching stocks go up by pennies, getting nervous and selling, holding on to long to losers...and somehow didn't lose much money (filing my taxes was painful though).  I started reading about day trading, fear&greed, psychology of investing, value investing, Peter Lynch, Benjamin Graham.  Started the buy and hold value investing technique, less exciting but seemed to perform better than my first year.  But then I got to med school and had a mountain of debt so I "invested" in a start up pharma company...very exciting again, watching the valuation every day...eventually losing all of my money...

Somewhere in there I had started reading about index funds and held onto excitement that one day I might be able to have an income and start investing again.  Well I'm now 3.5 years into work and I'm getting kind of bored looking at this stuff.  I set up automatic contributions.  I don't see the need to rebalance very often.

I have a written financial plan for the next 3 years that includes

• paying off both my student loan and my wife's student loans


• buying a house (20% down, already put aside, not going to change this)


• fully funding a 529 for my daughter


• moving my SEP to a solo 401k so that I can do backdoor roths


• a budget that puts us using 48% of our income to create positive net worth (includes house principal payments and paying down loan principal)


• funding a taxable account when we have comfortably reduced loan debt

This last month I've read bogleheads guide to investing (pretty good), Simple Wealth Inevitable Wealth (good but kind of a long sales pitch for why you need an advisor), and currently reading random walk down wall street (I do enjoy history).  I've read many other books about investing and while they often get me excited about compound interest, the reality that investing takes a long time and is boring, never really changes.

Alas, I'm starting to think I am spending too much time looking at things I have no plan to change at the moment.  I probably re-hash this whole plan once every day or two and I'm starting to think I'm wasting valuable time that could be applied elsewhere.  Anyone else feel like they are spinning their wheels without much production of new thought?

[G]

Yes.  Some people like reading about golf...I like reading about personal finance.  I read/listen to 6-10 investing books each year, with very little actionable result.  As long as it isn't to the detriment of something else, I hardly think that it is spinning wheels.

[jfoxcpacfp]

With the knowledge you've gained from educating yourself, what drives you to rehash your plan every day or two? Obviously I'm not a psychologist, but that borders on obsession, imho. You've done exactly what you need to do (written plan, etc.) and beyond that, the only adjustments you need to make are for events that change the plan. Your written plan includes numbers, right? i.e. - defining "comfortably" reducing your debt, goals for how much to put in taxable accounts and the annual/monthly targets, etc. I can't imagine what you would be accomplishing by checking it so often.

As you read in SWIW, a good investing plan is boring once in place. Letting your emotions affect any money decision (excitement or fear) is always a bad idea. Maybe it's time for another hobby.

[Kennyt7]

It is very boring but indexing your way to wealth is the superior way

That's a no brainer; after a while any more reading just reinforces what you should know

ITS A MARATHON not a sprint

As Buffett says take a look after 30yrs-put it on AUTOPILOT

 

Random Walk made me wealthy as it shows how crooked wall street is and BOGLE clearly elucidates the tyranny of compounding related to the cost factor

FEES kill your profits big time

[Zaphod]

Definitely once you have a master plan of sorts it does seem exciting and like something should happen...but it is a process and super slow. I think everyone that starts this up in earnest has this issue at first. I still love reading things, but now feel things are mostly on autopilot. Trying to transition my early morning free time where I read and follow the market into exercise time instead of trying to fit it in before/after dinner.

[Kennyt7]

The REAL excitement begins when compounding kicks in

there were years in the 90's.  96-98 I think , that averaged 20% a year, sp500

sp 500 tripled since Obama at its high

[chrisCD]

To gain some excitement in investing (if you need it) keep a portion to put in individual stocks.  That is basically what I have done.  Although, my total portfolio is quite small and most of it is in ETFs or Brokered CDs, a portion is also in individual stocks.  I am able to make regular contributions so I re-balance with those.  Some months I just buy ETFs, sometimes I buy a new CD, and sometimes I hold contributions for a couple of months and add a stock that I find compelling.

There was a great article on Seeking Alpha the other day:  http://seekingalpha.com/article/3902826-zero-effort-retirement-20-years-dollar-cost-averaging-s-and-p-500

Turns out boring can be quite profitable.

cd :O)

[NJDoc]

Agree with all the prior comments. Keep a small "play" account if you must and trade individual stocks, options, have fun.

That's what I did years ago, it kept me happy and didn't affect the long term plans. Long term investing is boring....sorry.

One hedge fund guy told me: you don't make money in the market by doing things, you make it by not doing things.

 

[The White Coat Investor]

Good investing is boring investing. If you want to continue to learn and grow and read, concentrate on helping others.

[Dicast]

Thanks for the replies.  I do like to help others and encourage their growth in personal financial knowledge but at some point I think I'm way more interested than some of the people who initially engage in conversation.

The idea of having a play account for stocks seems appealing to me until I think about the hassle of taxes and the slippery slope of essentially gambling on stocks as I did in med school.

Johanna may be right about getting a new hobby.  I've had a few things I've tried to pick up in the past that I haven't been able to keep up with (guitar, spanish, golf)...maybe it is the right time to pick one of them back up.

[YYjames]

Different methods to invest

I think people on this board should realize that index fund investing is boglehead investing. Not everyone lives by it.

Here is a contrarian view: I do deep value investing. I've done better than index finders

Eric tait (check other threads) swears by real estate and I bet he's beating index funds

Point is if you want to really learn and do it as a small business then to me that's exciting. The easy way is index funding which is put it and forget. It works and works well and should be considered a very nice way of making passive income stress free.

[Zaphod]

YYjames wrote:

Different methods to invest

I think people on this board should realize that index fund investing is boglehead investing. Not everyone lives by it.

Here is a contrarian view: I do deep value investing. I’ve done better than index finders

Eric tait (check other threads) swears by real estate and I bet he’s beating index funds

Point is if you want to really learn and do it as a small business then to me that’s exciting. The easy way is index funding which is put it and forget. It works and works well and should be considered a very nice way of making passive income stress free.

Click to expand...

You dont have to do some kind of individual selection to not be simply buy and hold 100% of the time. Even tactical portfolios do best with etfs. In a few years stock selection will be done much less than even now. Its a relic of what people grew up with, you couldnt buy an index, etc...there werent a million different cheap ways to buy into x, y, or z. Now, people are growing up with an etf flavor for anything at prices that cant be beat on an individual level. You can get pretty granular but still avoid the risk of single companies. I imagine I will have a hard time never buying individual stocks if events like august or the recent couple weeks occur with regularity and offer quick wins as they often do.

For example, financials have been likely over punished and 2 weeks ago I bought financials etf IYM and a smidgen of BAC within 30 cents of the most recent low. bac not a forever hold, but good swing (obviously have stop loss limits in place to protect position, which is less than 1%).

[YYjames]

Well yes what you are describing is fine and I do that as well but realize that we both are either momentum investing or value investing. Different than putting it in diversified etf or S&P500 and ride with it. Diviing it up on large cap mid cap international companies etc is different than picking IYM. Pennies in the dollar with cheap PE is value investing in the definition of graham and dodds

I'm just clarifying boglehead style which really is put in these 3-4 etfs and rebalance and keep going.

[Zaphod]

YYjames wrote:

Well yes what you are describing is fine and I do that as well but realize that we both are either momentum investing or value investing. Different than putting it in diversified etf or S&P500 and ride with it. Diviing it up on large cap mid cap international companies etc is different than picking IYM. Pennies in the dollar with cheap PE is value investing in the definition of graham and dodds

I’m just clarifying boglehead style which really is put in these 3-4 etfs and rebalance and keep going.

Click to expand...

Oops, turns out I meant IYF the financials etf. Yes indeed, I find there is always something one can do that is probably better today than it was last year or the next, counter cyclical even which I guess is also a form of value investing.