461–470 of 509 posts
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If you bet on a huge crash then your PUTs will lose the value anyway. So what if they give you 50% profit when the inflation is 1000%.
A huge crash will net you much more than 50% profit, you can pull that any day of the week for the last 4 months with the market volatility.
With inflation you can lose much more.
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Exactly this. Put your cash in S&P500 and live a peaceful life. For optimization: take out a little bit more when the price is considered to be high and take out a little bit less if it's low.
Is this not timing the market? How do you calculate what is "high" and "low" - rolling average increasing 7% per year, compare current price to that expectation?
> Mean reversion in finance suggests that asset prices and historical returns eventually revert to their long-term mean or average levels
The avg. 7% per year will break down into very good years and bad years. Let's say the S&P500 is already down -5% YTD and has underperformed over recent years, then you would it considered to be low, because you would rather expect the performance to increase in order to match the long-term avg. of 7%. So at this point you would happily buy in and expect mean reversion. But of course there's no such thing as perfect timing (except in hindsight) and no guarantee for mean reversion to happen.
Any answer here that includes the word bitcoin will be downvoted to oblivion, but it was the right answer 10 years ago and it is still the right answer today. Ignore and downvote at your peril!
Very few fortunes are lost by spending or excesses, they are mostly lost by bad investments and bad financial decisions
* It might be better to take your time and think long and hard before making any investment decisions
We are at a point of unbelievably crazy valuations and in the midst of a global pandemic
a lot of stuff is going to go tits up
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The strategy I described is sometimes called “time cost averaging” It is a form of timing the market. The idea is to buy at about the average price over some time period to avoid getting bitten by volatility. For reasons not involving investments, I had to have a large cash position until we were well into the recovery from the last crash. Buying index funds at all time highs during the biggest economic downturn of o…
One other thing, I recommended a robo over a manually rebalanced vti/bond split because they include some money in foreign indexes (increasing diversification), and auto-rebalance. Some also do fancy stuff like tax loss harvesting. All of that complexity supposedly beats simple manual approaches by a percentage point or two (after tax). Also, most robos are idiot proof.
Just skimming some of the replies here makes me think you will get better advice on the Bogleheads forum [1]. Despite the minimalist appearance it is actually a great place to get sensible financial advice. I would start with the wiki page on managing a windfall [2], then search through older replies to similar questions. This kind of question gets asked there a lot, so there should be some recent threads. [1] https:…
"Despite the minimalist appearance" As time goes on, a site remaining minimalist like this is a good indicator of value. I'll never understand the desire to move away from high density UX like this to the modern web junk UX that looks more appealing but makes everything more convoluted.
What I was trying to say, but didn't have the space to fully articulate, was that it can look a little noisy and random at first glance. As I write this some of the top threads include posts about replacing a toilet valve, herbicide use, and motivating a son in law. Once you filter through some of this though there are a lot of really smart people giving pretty good financial advice.
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The VINIX is down 3% YTD while the rest of the market ballooned. Looks like we "picked stocks" by picking the indexes here, too? I just don't understand the insistence on indexes. We're afraid of picking stocks that go bankrupt? We work in tech, and a lot of us are science nerds. Surely we can pick names based on how we think those technologies are likely to be successful. We have access to a lot more information tha…
S&P500 is also picking stock. Something like MSCI World is considerably less so.
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On the other hand, companies with long histories of sustained and rising dividend payments also tend to outperform the S&P500 in terms of total return (dividends + capital gains), and do so with lower volatility. Reasons include having a business that is profitable and stable enough to sustain such payouts and a management culture that appropriately balances shareholder interest (by paying dividend) against the long-…
Counter example: Apple. Low dividend, but all other check boxes apply.
1. I did not say anything about how high the dividend is, only that it has been sustained and has not decreased for a long period of time (multiple decades). Some companies on the list currently pay relatively low dividends as well.
2. It is a heuristic, so it will definitely miss a few great companies and some companies on the list will go on to do poorly (not that any method of stock picking will be any different).
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The historic worst case for the inflation-adjusted S&P 500 is not being up from 1929 - 1987 - 58 years. https://www.macrotrends.net/2324/sp-500-historical-chart-dat... Edit: This ignores dividend reinvestment as ummonk noted. https://www.officialdata.org/us/stocks/s-p-500/1900 suggests 1929 - 1944 was probably the longest time. We are in unprecedented times. Highest debt, lowest bond yields, crazy P/Es, historic GDP…
I tend to agree with this and I'm also long several gold miners, and I've swing traded some of them (one was a value buy with a long-standing issue with the Greek government that I was watching the news on for years). It baffles me how this Bogleheads philosophy has taken tech people. People can't wrap their heads around the idea that gold goes up in times of trouble, or that work from home tech is likely to go up, o…
Because while I might be lucky enough to trounce the market right now, that doesn't mean I'll trust anyone to pick the right companies. It's safer to go for average returns than to risk the market trouncing you, especially with the vast majority of your wealth. And no, this etoro account is not my main investment account.
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Exactly this. Put your cash in S&P500 and live a peaceful life. For optimization: take out a little bit more when the price is considered to be high and take out a little bit less if it's low.
Is this not timing the market? How do you calculate what is "high" and "low" - rolling average increasing 7% per year, compare current price to that expectation?