RetireJapan

Haystack wrote: ↑Wed Feb 09, 2022 12:03 pm When someone is this certain they can call the market trajectory one has to ask...


Why not simply buy LEAPS puts on SPDR?

The answer is that no one really knows the market direction. Lumpsum investing, whether it be tsumitate style or dumping your bonus in as soon as it clears, is the best strategy statistically speaking. It requires no thought, planning, reading tea leaves, or studying Jerome Powell`s choice of tie colour during his last press conference.

For most investors, their emotions and their overconfidence in their own abilities lead to them underperforming the market. This is what we need to fight against.

Now you are advocating a strategy that is probably beyond the capabilities of most of the readership.

Haystack wrote: ↑Wed Feb 09, 2022 12:03 pm When someone is this certain they can call the market trajectory one has to ask...


Why not simply buy LEAPS puts on SPDR?

Lumpsum investing, whether it be tsumitate style or dumping your bonus in as soon as it clears, is the best strategy statistically speaking. It requires no thought, planning, reading tea leaves, or studying Jerome Powell`s choice of tie colour during his last press conference.

For most investors, their emotions and their overconfidence in their own abilities lead to them underperforming the market. This is what we need to fight against.

Now that's where we get totally lost. You're totally right about overconfidence, and peoples abilities.
So maybe the best strategy for me is to put that regular amount away, and then as Retire Japan said earlier about having "extra multiple months of deposit/money" put that money to work. This is what I have at the end of the month. Sometimes its a lot, and sometimes it's less.

Tkydon wrote: ↑Wed Feb 09, 2022 2:44 pm Now you are advocating a strategy that is probably beyond the capabilities of most of the readership.

With respect, advocating for a market timing strategy is exactly that, but even more dangerous because it's presented to the unsuspecting masses counched in language that makes it sounds plausible and doable.

To quote Burton Malkiel, on people that claim to have insight on how the markets are going to play out: "There are only three kinds of financial prognosticators: those who don't know, those who don't know they don't know, and those who know they don't know but who get paid big bucks to pretend they know."

Well, I am none of those!

https://youtu.be/JlEGU2ypr1Q

Tkydon wrote: ↑Fri Feb 11, 2022 12:09 pm Well, I am none of those!

https://youtu.be/JlEGU2ypr1Q

"For almost a half-century, value-investing icon Jeremy Grantham has been calling market bubbles."

The first line of the video description

A quote from Vitaliy Katsenelson's last newsletter,

"Then you have index funds. On the surface they are over-diversified, but they don’t suffer from the over-diversification headaches of managed funds. In fact, index funds are both over-diversified and under-diversified. Let’s take the S&P 500 – the most popular of the bunch. It owns the 500 largest companies in the US. You’d think it was a diversified portfolio, right? Well, kind of. The top eight companies account for more than 25% of the index. Also, the construction of the index favors stocks that are usually more expensive or that have recently appreciated (it is market-cap-weighted); thus you are “diversified” across a lot of overvalued stocks.

If you own hundreds of securities that are exposed to the same idiosyncratic risk, then are you really diversified?"

I think the market performance over the last 2 years since after the COVID Crash of Feb 2020 is anomalous, and will be completely wiped out in the forthcoming reversion to the mean...

I wish you all the best of luck. I have stated my position, and I will run the experiment for 2 years...

RetireJapan wrote: ↑Fri Feb 11, 2022 2:05 pm

Tkydon wrote: ↑Fri Feb 11, 2022 12:09 pm Well, I am none of those!

https://youtu.be/JlEGU2ypr1Q

"For almost a half-century, value-investing icon Jeremy Grantham has been calling market bubbles."

The first line of the video description

An interesting video. Lots of doom & gloom predicted which should worry people. If only we COULD predict the future.

runmanTX wrote: ↑Sat Feb 12, 2022 12:04 pm Lots of doom & gloom predicted which should worry people.

I would love some doom and gloom. The only doom and gloom I had a real shot at was the March 2020 crash, and it didn't last long enough to give us a chance to buy in.

RetireJapan wrote: ↑Sat Feb 12, 2022 12:26 pm

runmanTX wrote: ↑Sat Feb 12, 2022 12:04 pm Lots of doom & gloom predicted which should worry people.

I would love some doom and gloom. The only doom and gloom I had a real shot at was the March 2020 crash, and it didn't last long enough to give us a chance to buy in.

We are over here arguing about LSI and DCA, and your sitting on a keg of dry powder?

Why are you holding so much cash? Is it your spouses preference?

That`s why we have over a years worth of spending in cash. Japanese preferences. Nothing wrong with it, eliminates the need for bond holdings early on. Japan is a very low-inflation environment too, so it does not get eaten away too fast.

We had a reasonable cash reserve in 2020 -about ten million yen or so, both as a kind of super-emergency fund and as dry powder, but of course what I had overlooked was the fact that as the stock market and economy were crashing my wife's business was also in trouble and we weren't sure if it was going to survive.

So we needed our dry powder to keep the business afloat or shut it down. Hence no new investing during that delicious dip.

This time we have a bit more powder (we sold a lot of our US stocks this year, not so much due to market timing so much as lifestyle timing), so I would love to see a substantial dip sometime in the next year or so. If we don't get a dip I'm happy to drip it back into mutual funds.

It's funny that we are basically doing what Tkydon is talking about, although not exactly for the same reasons, and only with a portion of our portfolio