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Should’ve Bought The Damn Dip
Guess you should've bought the dip. Who knew, right?
Even absent the myriad structural factors which tend to tamp down volatility (which is anyway mean reverting) and put a floor under stock prices, you should know that equity pullbacks are more likely to be buying opportunities than falling knives, and not just because stock prices "always" go up on a long enough investment horizon.
Central banks spent the better part of a dozen years post-Lehman optimizing the Pavlovian response function tha
Ever consider dollar cost averaging like the Vanguard crowd and never think about this stuff again?
I’ve been a Vanguard client since I was… well, since I was much younger than I am currently, let’s put it that way. The vast majority of my investments are at Vanguard. Vanguard got a cameo in “Where Were You When The World Didn’t End?” —> https://heisenbergreport.com/2020/01/25/where-were-you-when-the-world-didnt-end/
I mean, look, the (self-evident) fact is that anybody who tells you they’re consistently outperforming by actively trading at home is lying to you. Particularly when you factor in the cost of a terminal. That’s what amuses me about the so-called “financial blogosphere” defined as this community of people who, implicitly or otherwise, pretend to be besting the market. They’re making it up. It’s just that simple. And in some cases, they’re charging an exorbitant amount to tell you about it. That’s one (among many) reasons I assiduously avoid associating myself with any of the other people who write about markets regularly in a non-Wall Street capacity. That entire group — the “newsletter” writers, the bloggers, Twitter’s legions of “ex-Goldmans” and “ex-Bridgewaters,” the Substackers and all the rest are every one them full of sh-t in one way or another, in my opinion. To be sure, about half of them are probably richer than I am, but it didn’t come from trading their own accounts, and it’s anyway irrelevant because a majority of what they have is tied up in home equity or psuedo-encumbered by the many “joys” of marriage and child care. Whereas me —> ~90% liquid, childless, single, 100% unburdened by other people’s problems and a staunch advocate of dollar-cost averaging at the lowest possible expense ratio, which is to say less than 10bps ideally.
Well then, thanks for writing your reports for us chumps who should know better but can’t stop trying to find a way.
“God’s work.”
I’m up bigly if you ignore those bad trades I made and include the good trades I didn’t make but mentioned on an internet message board!
Oh my! I am truly gob-smacked and only good on ya’. About 35 years ago my in-laws, in an attempt to create a surprise for my wife and I, secretly invested in a Ponzi scheme run by their tax accountant. They wanted to make us a gift of money for our child’s college costs. The guy died and left nothing for his victims. The folks called me confessing all and begging me for advice. They lived five miles down the road from Vanguard’s main campus so I took their savings and stuck them into a Vanguard PA muni fund. They had other income so I dollar cost averaged all their earnings and savings into several Vanguard tax-exempt funds funds. After they passed away all those funds came to my wife and I, where their monetary relatives remain with their other Vanguard kin. The expenses run about 5 bp and these sweeties are about 35% of my current portfolio. Not my best winners right now, but steady growing income and solid as a rock. Bogle was a rock star.
My 55% SPY and 45% in about ten individual tech names (aapl, nvdia, avgo, googl, microsoft, etc.) portfolio has done better than SPY – but it can be nerve wracking when tech dips. I have had pretty close to this portfolio for over ten years and see no reason to change this allocation. Before that, I would put almost 100% of whatever I had saved into an individual stock, such as appl, avgo, etc. whenever they significantly sold off and then hold through recovery and beyond. That was when I made my “serious” returns. However, now that I am older and don’t ever want to have to go back to work- I no longer am willing to take that type of risk.
Other than in February, 2020 -when I freaked out over covid and went 100% to cash- I just hold through any volatility- which has worked well for me.
I have never bought/sold options, leveraged my investments or shorted a stock, either.
This last dip didn’t even negatively affect my ability to get 8 hours of nightly sleep. GLTA.
I regret not buying the dip this time.
H-Man, we all know that if your long the market with a long term horizon, you make money. We speculate on the spaces in between those markets.