Quiet board - time to buy?

[seajay]

Bitcoin has become more mainstream recently, which limits backtesting however from 2021, after all of the big-up's as it became more accepted, 25/50/25 bitcoin/stablecoin/gold compared against stocks https://www.portfoliovisualizer.com/bac ... 95k8P7yq22

With that you could hold BTC/USDC/PAXG crypto currencies/tokens, perhaps in a offline wallet where you are the bearer holder (eliminates counter party risk in depository systems and exchanges), could pass the private keys to anyone you like directly as a form of wealth transfer and you can trade 24/7.

Prefer a more PP like holding and ... reduce the BTC down and increase the stablecoin holdings https://www.portfoliovisualizer.com/bac ... 5urMrYuewF

After the US weaponized SWIFT and now with Trumps tariffs pushing uncertainty to extremes many are moving away from investing-in/lending-to the US and transitioning over to the likes of the crypto assets. Presently USDC/USDt type dollar based stable coins are preferred, however other choices are rising that diversify away from the dollar. Trumps is also helping that along after he became fond of crypto after his family were de-banked by the democrats, is keen to promote the widespread adoption of crypto - which somewhat conflicts with his dislike of the BRICS and their establishing alternatives to the dollar.

[mathjak107]

What is the job?

Any chance there could be more than one?

well the job in the accumulation stage for our long term money is to have your money work for you while you work for your money .

it’s to take advantage of the two most powerful tools we have , TIME and COMPOUNDING.

i know in my accumulation stage i didn’t want my money having a low end job so i compounded it as best as i could with 100% diversified equity funds . no bonds , no cash .

now in retirement the job of the portfolio is to sustain a relatively, safe , secure withdrawal rate that keeps up with inflation. and unexpected large expenditures or in our case we have planned large expenditures we like to spend on .

it’s no longer about maximizing our returns .for the most part we won that race , now it’s about enjoying that money and sustaining that income for as long as we live

[Jack Jones]

Many who want to do what’s comfortable can’t afford to so they are using the wrong tool at the wrong time in their life

And it hurts them and they ended up giving up more money then they would ever lose

This an interesting take, but I disagree with it. Due to behavioral issues and life satisfaction, it is more important to be comfortable with your portfolio than optimizing for the highest net worth, even during accumulation.

[mathjak107]

i would disagree , what we may be comfortable with and what we need to have to meet our goals are two different things .

many retirees have been hurting themselves , in fact dangerously as they try to go with what they are comfortable with as opposed to the allocation they need to maintain their draw rate they are counting on .

most of us workers don’t have the luxury of going with what we are comfortable with in the accumulation stage because we need one of the most powerful forces on earth working hard for us and that is compounding .

the best way to have an underfunded retirement is go with what you are comfortable with .

if one can’t handle the proper amount of equities to adequately grow their money than get a money manager who can .

this is where most would benefit paying a money manager.

vanguard has done a few studies on this and they are the grand pappy of do it yourself investing but they found most small investors would do better letting someone else handle their money

[flyingpylon]

Things aren't quite as black and white as you make them out to be.

[mathjak107]

nothing is ever black and white . most things are just different shades of gray .

but the more one can manage to save for retirement the better off they likely will be .

that doesn’t change.

the less cash you can save for that goal the more compounding you will, need . that also doesn’t change.

your personal feelings or comfort level don’t pay the rent or put food on the table when the pay check stops.

the mistake is not having others manage it for you if you aren’t comfortable.

in fact morningstar small investor returns shows that more conservative investors just have a lower tolerance level and the more conservative funds show the same poor investor behavior when things get volatile as the more aggressive funds

[seajay]

When modest/deep downturns occur even those that let others manage their money may capitulate, its a common time for high flows out of more aggressive funds. Those that manage their own initial more aggressive asset allocation, or have managers doing that for them, end up after capitulation with less than had they selected/stuck with a conservative asset allocation.

IIRC emotions induce something like a 5% drag versus mathematical aggressive asset allocation gains that drags down actual rewards to lower than conservative asset allocations. Many think they're suited to aggressive until things turn sour. Groucho Marx was a aggressive investor but then swapped over to safe/conservative after he saw his portfolio value collapse - bought high, sold low. In his case he still had more than enough, however overall that residual portfolio value was less than had he been conservative from the start.

It's a matter made worse by the ease/speed of trading nowadays, where a emotion can kick in and a button is pressed, alongside a constant bombardment of information flow temptation to press the button. Some of the best investors are those that took little/no interest. Those that take interest in the media/technology are the ones that are more inclined to capitulate, such as those reading here compared to those who've bought and held and aren't even aware of the board or current assets prices/valuations.

[mathjak107]

We saw how fast many here dumped the pp over the rising rate era we just had despite it supposedly being the safest portfolio as designed

There were so many dr Frankenstein versions as investors dumped parts they did not want

[dualstow]

tsk tsk tsk. People have no discipline.

[yankees60]

tsk tsk tsk. People have no discipline.

Just take a look at your average American and that should be no surprise.

[glennds]

Mathjak makes a valid point. It's all a balancing act. They say you can never change anyone else, you can only change yourself.
So in that context, if your own comfort level stands in conflict with the returns you need for the retirement goals you have, it may not be a bad idea to look internally at your personal comfort level and work on it.

Not to say you should try and go from ultra conservative to a reckless risk taker, but if anxiety is an obstacle; instead of building a portfolio around it, maybe work on the root causes of the anxiety and see if you can reduce it enough to get into a healthier relationship with risk.

I have a friend who is a tax preparer. He is so ultra conservative that even the Permanent Portfolio would keep him up at night. So his investment strategy is to put his excess income into a CD ladder with a large bank.
Okay, so he sleeps at night. But the amount of opportunity cost he has incurred over three decades is ENORMOUS. You have to wonder how much wealthier he would be if he could have increased his personal risk tolerance even a notch or two. Will his inflated CD dollars lead him to an impoverished retirement?

[boglerdude]

Back when people needed your savings (loans) that wasnt crazy. days of easy returns from skilled population growth are over. S&P will need to eat small business and get fedbux to keep "growing"

[mathjak107]

Mathjak makes a valid point. It's all a balancing act. They say you can never change anyone else, you can only change yourself.
So in that context, if your own comfort level stands in conflict with the returns you need for the retirement goals you have, it may not be a bad idea to look internally at your personal comfort level and work on it.

Not to say you should try and go from ultra conservative to a reckless risk taker, but if anxiety is an obstacle; instead of building a portfolio around it, maybe work on the root causes of the anxiety and see if you can reduce it enough to get into a healthier relationship with risk.

I have a friend who is a tax preparer. He is so ultra conservative that even the Permanent Portfolio would keep him up at night. So his investment strategy is to put his excess income into a CD ladder with a large bank.
Okay, so he sleeps at night. But the amount of opportunity cost he has incurred over three decades is ENORMOUS. You have to wonder how much wealthier he would be if he could have increased his personal risk tolerance even a notch or two. Will his inflated CD dollars lead him to an impoverished retirement?

my son and his wife are like that .

they are very high earners .he is a full equity partner in one of the top labor law firms in the country and she runs the tax dept for a world famous hedge fund and they are ultra conservative when it comes to what they do with their own money

it almost hurts me to see their opportunity costs pass them by .

but at least they can make up for it because they do save quite a bit .

it just doesn’t compound a lot .

but most americans are not in that category.

we needed that powerful compounding over the decades and accumulate as much as we could .

we always planned on trying to live as much as financially stressless life as possible we could in retirement.

so i used the power of diversified stock funds , but always 100% equities.

it wasn’t until i was 50 to where the really big real estate deals came in to play.

up until that point it was equity funds that did the heavy lifting

[dualstow]

Mathjak makes a valid point. ...
So in that context, if your own comfort level stands in conflict with the returns you need for the retirement goals you have, it may not be a bad idea to look internally at your personal comfort level and work on it.

Not to say you should try and go from ultra conservative to a reckless risk taker, but if anxiety is an obstacle; instead of building a portfolio around it, maybe work on the root causes of the anxiety and see if you can reduce it enough to get into a healthier relationship with risk.
…

I think that’s fair, but details are important, lest we paint a picture that pp investors are just timid crabs afraid to come out of their shells.

Avoiding the stock market can come at a huge opportunity cost. There is of course another side to that coin: the reckless risk taker which you mentioned, Glenn. Concentrated bets in individual stocks instead of the broad market. Putting money you can’t afford to lose (anytime soon) into the market, and then selling prematurely to pay off debts or pay bills. Borrowing money you cannot pay back. Day trading.

I love the stock market and I am stock heavy, but but I would rather see my friends suffer from inflation than treat the market like a casino and lose everything.

[yankees60]

Mathjak makes a valid point. It's all a balancing act. They say you can never change anyone else, you can only change yourself.
So in that context, if your own comfort level stands in conflict with the returns you need for the retirement goals you have, it may not be a bad idea to look internally at your personal comfort level and work on it.

Not to say you should try and go from ultra conservative to a reckless risk taker, but if anxiety is an obstacle; instead of building a portfolio around it, maybe work on the root causes of the anxiety and see if you can reduce it enough to get into a healthier relationship with risk.

I have a friend who is a tax preparer. He is so ultra conservative that even the Permanent Portfolio would keep him up at night. So his investment strategy is to put his excess income into a CD ladder with a large bank.
Okay, so he sleeps at night. But the amount of opportunity cost he has incurred over three decades is ENORMOUS. You have to wonder how much wealthier he would be if he could have increased his personal risk tolerance even a notch or two. Will his inflated CD dollars lead him to an impoverished retirement?

I also have a CPA friend who was conservative in all things in life except for his investing.

He would never accept index investing, thinking he could outsmart the market. Never could. It was always stressful to him each time he was buying and selling.

Decided that he could not take it any longer and completely abandoned all equities.

Fixed income only.

But he could not totally restrain himself as he sometimes took some risk in the fixed income for better yields.

[flyingpylon]

As with many things in life, it depends on where someone is on the satisficer - maximizer spectrum. If someone is satisfied with their career, income, savings, investment results, etc. and the lifestyle they provide then what right does anyone have to judge whether they have sufficiently maximized any of it? There are many other dimensions of life that can be maximized or not and it's up to each individual to choose.

[mathjak107]

the problem is most people are pretty bad at estimating what they will need .

they don’t understand its no longer about giving a pil of money that they think is a large amount .

someone with a million dollars may be worse off than my friend who retired with a 40k pension which is inflation adjusted once its all about the safe withdrawal rate it generates .

so i dont care really what anyone does with their money or thinks is enough .

i only see the results of all these underfunded retirements like my dad had or our friends who thought they had a large sum saved only to find they didn’t have the cash flow they needed from it .

so sadly they had to leave their family and friends and , move down south