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I have tried so very hard to outsmart the market, read so much stuff and this is the result compare to S&P500: http://i.imgur.com/fEZvLod.png http://i.imgur.com

by smtddr 11y ago

I have tried so very hard to outsmart the market, read so much stuff and this is the result compare to S&P500: http://i.imgur.com/fEZvLod.png http://i.imgur.com/fEZvLod.png , for all my time & energy I could have just dumped all my savings into SPY and call it a day. I am now solidly convinced that anyone who beats the market is either win-the-lottery lucky or has illegal insider info. P.S., that falling blue-data in 2nd half of the graph is WholeFoods falling from about $65 to $31.... =/

toomuchtodo 11y ago
Here's the breakdown betterment has me in for 90% stocks/10% bonds allocation: https://i.imgur.com/IEcWuYC.png https://i.imgur.com/IEcWuYC.png
- smtddr 11y ago
  Oh, nice! Now I think I want an "Ask HN" for everyone to post their stock-allocation charts. :)
- kasey_junk 11y ago
  For the record that is a very similar allocation to a Vanguard 2040 target fund. https://personal.vanguard.com/us/funds/snapshot?FundId=0696&FundIntExt=INT#tab=2 https://personal.vanguard.com/us/funds/snapshot?FundId=0696&... You might want to a) compare the price of betterment + those funds to the target fund and b) use that target fund as your benchmark.
  - toomuchtodo 11y ago
    I pay Betterment something like ~$180/year for over $100K in assets, and it includes tax loss harvesting on my non-retirement accounts. Could I go with Vanguard and their terrible web interface with less features? I could. I don't mind paying Betterment what I do though. I don't want to waste time on managing my stock/bond assets; I just want to fund the account and have it be managed programatically. https://www.betterment.com/pricing/ https://www.betterment.com/pricing/
  - nerfhammer 11y ago
    Don't forget to take taxes into account. Vanguard's Target funds are not at all tax-optimized, no private wealth manager would put the total/international bond market funds in your taxable account. IMO this is one feature the roboadvisors clearly have going for them.
    - saryant 11y ago
      Target funds are also clearly geared towards people not yet at the point where that will make any difference. That's why they have such a low minimum. They're a stepping stone until you have enough capital to qualify for Admiral funds.
- EC1 11y ago
  What app is this? Is it available in Canada?
  - toomuchtodo 11y ago
    https://www.betterment.com https://www.betterment.com. I don't believe its available for Canadians unfortunately.
    - EC1 11y ago
      That's shitty. I have some savings but have no idea how to go about investing them into anything. All seems so complex.
  - aianus 11y ago
    Wealthsimple is the Canadian clone. If you're interested here's a referral link that gives us both an extra $5k investment without fees: http://wsim.co/1LcrxXW http://wsim.co/1LcrxXW.
hinkley 11y ago
I came to an understanding that the real reason to start investing early has nothing to do with the compound interest theory that is usually provided. It's true but ultimately boring and doesn't really inspire. The reason you start investing early is so that you get practice investing before you have any real money to lose. All of the dumb stuff I did trying to figure out how the market works, I did when I had a couple thousand dollars. The worst I could do (since I didn't do margin) was lose a couple thousand dollars. Now if I bet wrong on my IRA, I could lose that much for a 1% drop, but I have the confidence and experience to know that 'let it ride' is the right strategy about 90% of the time. The only time I sell is when I get tired of an underperformer, or when I see clear signs of baseless exuberance (eg, an Apple media event is tomorrow) and then I buy back in when people have calmed down.
- smtddr 11y ago
  >>but I have the confidence and experience to know that 'let it ride' is the right strategy about 90% of the time. Truth, that was an expensive lesson for me. First bitcoin took about $3,000 USD from me in exchange for that lesson. Then since apparently I didn't learn it enough the first time, I sold my Facebook stock at $16..... oh what could have been... c'est la vie...
  - tedmiston 11y ago
    If it makes you feel any better, I learned that lesson investing nearly all of my savings months before the 2008 recession.
- jerf 11y ago
  "the compound interest theory that is usually provided. It's true..." It really isn't. It's true only if every year you get the promised interest rate. You don't. This is one of my favorite charts ever: http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html http://www.nytimes.com/interactive/2011/01/02/business/20110... Read what it is carefully. The green and red are not that year's return, it's the cumulative return across the represented time span. Red spaces represent spans of investing for which it did not keep up with inflation. The "compound interest" argument comes with so many caveats that in practice, it is simply false.
rubicon33 11y ago
Over time I have formulated a belief system that goes something like this: Anyone who is beating the average, is either lucky, or cheating. The basic theory supporting this is that in any given endeavor you can assume the average participant is trying to improve their situation. This puts them in competition with everyone else, who similarly, are trying to improve their situation. The result, is a net 0 gain. We might all get stronger by going to the gym, but relative to each other, we're stagnant. To make 'non-average' advances, you need an edge. In stocks, I think it comes in the form of insider trading, or highly advanced HFT access. The average Joe trying hard, has no more a chance at beating the average than they would in a game or coin flipping.

by smtddr 11y ago

toomuchtodo 11y ago

Here's the breakdown betterment has me in for 90% stocks/10% bonds allocation: https://i.imgur.com/IEcWuYC.png https://i.imgur.com/IEcWuYC.png

smtddr 11y ago
Oh, nice! Now I think I want an "Ask HN" for everyone to post their stock-allocation charts. :)
kasey_junk 11y ago
For the record that is a very similar allocation to a Vanguard 2040 target fund. https://personal.vanguard.com/us/funds/snapshot?FundId=0696&FundIntExt=INT#tab=2 https://personal.vanguard.com/us/funds/snapshot?FundId=0696&... You might want to a) compare the price of betterment + those funds to the target fund and b) use that target fund as your benchmark.
- toomuchtodo 11y ago
  I pay Betterment something like ~$180/year for over $100K in assets, and it includes tax loss harvesting on my non-retirement accounts. Could I go with Vanguard and their terrible web interface with less features? I could. I don't mind paying Betterment what I do though. I don't want to waste time on managing my stock/bond assets; I just want to fund the account and have it be managed programatically. https://www.betterment.com/pricing/ https://www.betterment.com/pricing/
- nerfhammer 11y ago
  Don't forget to take taxes into account. Vanguard's Target funds are not at all tax-optimized, no private wealth manager would put the total/international bond market funds in your taxable account. IMO this is one feature the roboadvisors clearly have going for them.
  - saryant 11y ago
    Target funds are also clearly geared towards people not yet at the point where that will make any difference. That's why they have such a low minimum. They're a stepping stone until you have enough capital to qualify for Admiral funds.
EC1 11y ago
What app is this? Is it available in Canada?
- toomuchtodo 11y ago
  https://www.betterment.com https://www.betterment.com. I don't believe its available for Canadians unfortunately.
  - EC1 11y ago
    That's shitty. I have some savings but have no idea how to go about investing them into anything. All seems so complex.
- aianus 11y ago
  Wealthsimple is the Canadian clone. If you're interested here's a referral link that gives us both an extra $5k investment without fees: http://wsim.co/1LcrxXW http://wsim.co/1LcrxXW.

hinkley 11y ago

I came to an understanding that the real reason to start investing early has nothing to do with the compound interest theory that is usually provided. It's true but ultimately boring and doesn't really inspire. The reason you start investing early is so that you get practice investing before you have any real money to lose. All of the dumb stuff I did trying to figure out how the market works, I did when I had a couple thousand dollars. The worst I could do (since I didn't do margin) was lose a couple thousand dollars. Now if I bet wrong on my IRA, I could lose that much for a 1% drop, but I have the confidence and experience to know that 'let it ride' is the right strategy about 90% of the time. The only time I sell is when I get tired of an underperformer, or when I see clear signs of baseless exuberance (eg, an Apple media event is tomorrow) and then I buy back in when people have calmed down.

smtddr 11y ago
>>but I have the confidence and experience to know that 'let it ride' is the right strategy about 90% of the time. Truth, that was an expensive lesson for me. First bitcoin took about $3,000 USD from me in exchange for that lesson. Then since apparently I didn't learn it enough the first time, I sold my Facebook stock at $16..... oh what could have been... c'est la vie...
- tedmiston 11y ago
  If it makes you feel any better, I learned that lesson investing nearly all of my savings months before the 2008 recession.
jerf 11y ago
"the compound interest theory that is usually provided. It's true..." It really isn't. It's true only if every year you get the promised interest rate. You don't. This is one of my favorite charts ever: http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html http://www.nytimes.com/interactive/2011/01/02/business/20110... Read what it is carefully. The green and red are not that year's return, it's the cumulative return across the represented time span. Red spaces represent spans of investing for which it did not keep up with inflation. The "compound interest" argument comes with so many caveats that in practice, it is simply false.

rubicon33 11y ago

Over time I have formulated a belief system that goes something like this: Anyone who is beating the average, is either lucky, or cheating. The basic theory supporting this is that in any given endeavor you can assume the average participant is trying to improve their situation. This puts them in competition with everyone else, who similarly, are trying to improve their situation. The result, is a net 0 gain. We might all get stronger by going to the gym, but relative to each other, we're stagnant. To make 'non-average' advances, you need an edge. In stocks, I think it comes in the form of insider trading, or highly advanced HFT access. The average Joe trying hard, has no more a chance at beating the average than they would in a game or coin flipping.