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We all choose what investment strategy to follow. I have chosen other strategies that have smaller drawdowns. In the case where I have to tap into my retiremen

We all choose what investment strategy to follow. I have chosen other strategies that have smaller drawdowns. In the case where I have to tap into my retirement account because of unlucky life circumstances, I'm happier that I'm selling something I bought for 100 at 75 vs having to sell it at 50 (hypothetically).

Zetice 3y ago
Except 50 was never on the table, and 75 is a fraction of what it would be worth if you stopped trying to actively manage your portfolio. I cannot overstate how bad of an idea this is. Investing is not the same as decorating, there are objectively bad ways of managing your investments and this is one of them. You will end up poorer as a result of this behavior. I hope that happiness is worth it, because you are paying through the nose.
- fantasticshower 3y ago
  I think we're agreeing that you need a strategy and you need to stick to it. Where we differ (I think) is you think my strategy is objectively bad and yours is objectively good. I don't think we really know what each others strategies are though. I'll assume you're a proponent of B&H SPY and continuing to buy $X/month of SPY until you retire. I'm just saying there are other ideas than that that you can use that have smaller drawdowns and comfortable returns to risk. You could B&H 60/40 SPY/treasuries for example. Is it active management if you rebalance 60/40 once a year? What if you rebalance quarterly? At what point is it active management and therefore bad?
  - Zetice 3y ago
    This isn’t up for debate; it’s been shown, time and time again, that timing the market is a bad long term investment strategy.
    - fantasticshower 3y ago
      For the curious thread-reader, here are some websites that offer ideas that might make you question whether all "timing the market" is the same and equally bad long term. - https://portfoliocharts.com/portfolios/ https://portfoliocharts.com/portfolios/ (one step up in activity from B&H one ETF forever) - https://allocatesmartly.com/blog/ https://allocatesmartly.com/blog/ (another step up in activity from sticking to one asset allocation that you simply rebalance periodically) - https://qoppac.blogspot.com/p/systematic-trading-start-here.html https://qoppac.blogspot.com/p/systematic-trading-start-here.... (several steps up in complexity and activity)
      - Zetice 3y ago
        Note, dear thread-reader, how these links are all blogs, none of them are actual academic literature, unlike the dozens of citations in even an introductory book such as A Random Walk Down Wall St. If pablum on the Internet is your preferred method of investing advice, by all means care about a blog. If understanding finance as it operates is your preference, I recommend staying far, far away from the Internet blogosphere.
        fantasticshower 3y ago
        I don't believe the EMH is settled nor that markets follow a random walk. There is academic literature to back up both sides of both of those beliefs. Things aren't as settled as you make them out to be, and that's OK. What's important is that you have enough confidence in your methods, whatever they are, to stick with them. In the end, the stickwithitness may be more important than what you stick to.
        Zetice 3y ago
        EMH being settled isn't of issue here, and I did not claim the markets followed a random walk. It's the name of a book, not a theory pushed by the book itself. The fact that you haven't even heard of the book speaks volumes as to your education in personal finance. The basics of investing are settled for individuals, and you are not operating at a level of sophistication to rise into the areas of finance that are debated. These aren't "my" methods, they're the methods. You either do these basic things as a retail/individual, or you lose money. Period.

Zetice 3y ago

Except 50 was never on the table, and 75 is a fraction of what it would be worth if you stopped trying to actively manage your portfolio. I cannot overstate how bad of an idea this is. Investing is not the same as decorating, there are objectively bad ways of managing your investments and this is one of them. You will end up poorer as a result of this behavior. I hope that happiness is worth it, because you are paying through the nose.

fantasticshower 3y ago
I think we're agreeing that you need a strategy and you need to stick to it. Where we differ (I think) is you think my strategy is objectively bad and yours is objectively good. I don't think we really know what each others strategies are though. I'll assume you're a proponent of B&H SPY and continuing to buy $X/month of SPY until you retire. I'm just saying there are other ideas than that that you can use that have smaller drawdowns and comfortable returns to risk. You could B&H 60/40 SPY/treasuries for example. Is it active management if you rebalance 60/40 once a year? What if you rebalance quarterly? At what point is it active management and therefore bad?
- Zetice 3y ago
  This isn’t up for debate; it’s been shown, time and time again, that timing the market is a bad long term investment strategy.
  - fantasticshower 3y ago
    For the curious thread-reader, here are some websites that offer ideas that might make you question whether all "timing the market" is the same and equally bad long term. - https://portfoliocharts.com/portfolios/ https://portfoliocharts.com/portfolios/ (one step up in activity from B&H one ETF forever) - https://allocatesmartly.com/blog/ https://allocatesmartly.com/blog/ (another step up in activity from sticking to one asset allocation that you simply rebalance periodically) - https://qoppac.blogspot.com/p/systematic-trading-start-here.html https://qoppac.blogspot.com/p/systematic-trading-start-here.... (several steps up in complexity and activity)
    - Zetice 3y ago
      Note, dear thread-reader, how these links are all blogs, none of them are actual academic literature, unlike the dozens of citations in even an introductory book such as A Random Walk Down Wall St. If pablum on the Internet is your preferred method of investing advice, by all means care about a blog. If understanding finance as it operates is your preference, I recommend staying far, far away from the Internet blogosphere.
      - fantasticshower 3y ago
        I don't believe the EMH is settled nor that markets follow a random walk. There is academic literature to back up both sides of both of those beliefs. Things aren't as settled as you make them out to be, and that's OK. What's important is that you have enough confidence in your methods, whatever they are, to stick with them. In the end, the stickwithitness may be more important than what you stick to.
        Zetice 3y ago
        EMH being settled isn't of issue here, and I did not claim the markets followed a random walk. It's the name of a book, not a theory pushed by the book itself. The fact that you haven't even heard of the book speaks volumes as to your education in personal finance. The basics of investing are settled for individuals, and you are not operating at a level of sophistication to rise into the areas of finance that are debated. These aren't "my" methods, they're the methods. You either do these basic things as a retail/individual, or you lose money. Period.