RetireJapan

Ive found this discussion really helpful and probably reinforces the idea that putting cash to work, wether that be lump sum or DCA is important.

For one thing, people really want o believe they are doing the best thing, and if there is anything I've learnt is, just to put the money to work.

Most people point to certain times when the market dipped or rose, but after reading some articles, it made me realize we can't predict the future, and yet the people who work in the stock market seem to believe they can . I'll keep the emergency fund, and put the rest to work, as I wonder if most of it is noise, just behavior. All the noise about Ukraine, or the noise about a pandemic.
These links regarding the stock markets in the war and pandemics kind confirms it for me. just keeping doing what we do as long as we're happy.
I wonder if women out perform men in this field as men seem to be on "mines better than yours", chasing something.
https://medium.com/exploring-history/ho ... ed3bd71de8

https://www.investopedia.com/the-histor ... ts-5093256

https://www.investopedia.com/solving-th ... le-4780889

Well what ever it is, apparently women are outperforming men in this area, because they aren't trying to time the market.
https://www.cnbc.com/2021/10/11/women-i ... finds.html

This was written in 1971, before the 1973 Crash...

https://www.youtube.com/watch?v=sS_biO0-2b8
Chapter 9 - Figuring the Odds
2:35:00
(Most great advances in the stock market result from combination of rising earnings and rising price-earnings ratios. Buying right will do you little good unless you hold on. But holding on will do you little good unless you have bought right.)

P/E Ratio Discussion.
2:45:00

Chapter 10 - The quality of earnings is strained
3:00:00

Tkydon wrote: ↑Fri Feb 25, 2022 10:46 am This was written in 1971, before the 1973 Crash...

https://www.youtube.com/watch?v=sS_biO0-2b8
Chapter 9 - Figuring the Odds
2:35:00
(Most great advances in the stock market result from combination of rising earnings and rising price-earnings ratios. Buying right will do you little good unless you hold on. But holding on will do you little good unless you have bought right.)

P/E Ratio Discussion.
2:45:00

Chapter 10 - The quality of earnings is strained
3:00:00

The obvious solution then is to buy the entire market, invest with each paycheck, and hold on for decades.

You do not need to worry about finding a needle, if you just buy the whole haystack.

Haystack wrote: ↑Fri Feb 25, 2022 12:28 pm The obvious solution then is to buy the entire market, invest with each paycheck, and hold on for decades.

You do not need to worry about finding a needle, if you just buy the whole haystack.

Well said. Explains the moniker as well!

mighty58 wrote: ↑Fri Feb 25, 2022 4:17 pm

Haystack wrote: ↑Fri Feb 25, 2022 12:28 pm The obvious solution then is to buy the entire market, invest with each paycheck, and hold on for decades.

You do not need to worry about finding a needle, if you just buy the whole haystack.

Well said. Explains the moniker as well!

I have to agree.
The war in Ukraine has only just shown that, even though the markets went down, the stock markets just seem to offer blips and dips.
Good companies should be good companies no matter what the news is. So I'll just keep doing dropping in extra money into our funds. Hopefully that will buy a lot of needles.LOL

Worrying about when to time the market just shows a short-term mentality towards investing.
Here are some of differences between long-term and short-term thinking, off the top of my head.

LT mentality: focused on 20-30 years down the line
ST mentality: focused on what's happened last year, now, and what might happen next year

LT mentality: How can I grow my money over 20 to 30 years?
ST mentality: Is now a good time to invest?

LT mentality: Major risk is permanent loss of capital
ST mentality: Major risk is market fluctuations

LT mentality: Feeling of confidence that things will be up in 20-30 years
ST mentality: Feelings of worry and fear about the short-term effect of current events

I typed out the important part from the Audio File I posted earlier.



Relative Price-Earnings Ratio

https://www.multpl.com/shiller-pe

Similar to the thinking of Benjamin Graham...

100 to 1 in the stock market - A distinguished security analyst tells how to make more of your investment opportunities by Thomas William Phelps

Chapter 10 - Figuring the Odds
Pages 100-104

"This may seem to belabor the obvious, but many investors are so intent on earnings that they fail to appreciate the oft-times greater significance of changes in the market price of each dollar of those earnings. Price-Earnings Ratios and Relative Price-Earnings Ratios measure investor expectations. Ofttimes more than half of the rise in the price of a stock (and therefore an Index of Stocks) is due to a change in investor psychology.
Paying attention to the psychological content of any stock price advance is important for two reasons:
1. What goes up on a rise of investor expectations can go down on a fall of those expectations. Both occur without any change in reported earnings.
2. It is rare for seasoned stocks to have Price-Earnings Ratios much over four times the Dow's. Hence, when a stock sells at 60 times earnings while the Dow is selling at 15 times earnings, the prospective buyer is on notice (a) that his optimism about the stock's future is widely shared, and (b) that the chances of a further rise in the price of the stock due to a further rise in its relative Price-Earnings Ratio are slim. What this means is that the buyer must look to a further increase in earnings to carry all of the burden of any further increase in the stock's price, which heretofore has been lifted both by a rise in its relative earnings, and by a a rise in its Relative Price-Earnings Ratio.
A stock can rise one-hundred-fold if its earnings increase twenty-five-fold while its Price-Earnings Ratio increases four-fold. (25 x 4 = 100). But, if its Price-Earnings Ratio remains unchanged, its earnings must increase one-hundred-fold to produce the same price advance. If, heaven forbid, its Price-Earnings Ratio should be halved, its earnings must double just to keep its price unchanged.
It is no more sound to buy a stock in anticipation of a rise in its Relative Price-Earnings Ratio than it is to buy a stock in anticipation of a rise in its anticipated earnings. Department Store buyers would be stupid indeed if they paid no attention to fads and fashions. But it is unsound to buy any stock without knowing to what extent its price is based on its relative earnings, and how much is based on its Relative Price-Earnings Ratio.
There is no such thing as a "correct" Price-Earnings Ratio. All depends on what the unknown future brings forth. But one does not have to be a financial genius to realize that when he buys a stock at a very high Relative Price-Earnings Ratio he is paying someone hard cash now for what is hoped for in the rather distant future.

...

If these comments seem inconsistent with my theme of "Buy Right and Hold On", I welcome the chance to make a point. Buying right will do you little good unless you hold on. But holding on will do you little good - and may do you great harm - unless you bought right.
After a stock has risen to 50 times what you paid for it, you can be quite sure you bought right. If it doubles once more, you have a 100 to 1. You can afford to run some risks for a reward of that size.
The new buyer faces a different problem. He must ask and answer correctly the question: "What are my chances of making 100 for one from here?". As we saw..., history is of no help. Only correct assumptions about the future are relevant. And unless those assumptions are materially better than the stock's price already is anticipating, there is no profit in them.
Relative value analysis provides no final answers. It does help to define what is expected, and thus afford a benchmark against which the investor can guage the profit potential in whatever assumptions he chooses to make.
In the bright light of hindsight it can often be seen that the stock market has gone to unjustified extremes. It is much safer for the investor to proceed on the basis that these unwarranted extremes result from the common human inability to foresee the future rather than from stupidity. As a matter of fact, in the stock market money tends to move from stupid to intelligent hands.

...

When one attempts to outguess the stock market he enters the lists against the distilled essence of the best financial brains of the world. It is a sobering thought. What should give the average man hope is the realization that the most expert, the most experienced are constantly retiring or dying, often being succeeded by inexperienced youngsters who insist on learning the hard way.
A further comforting thought is that since no one knows what the future holds, all of us are entitled to guess about it. We should not forget, though, that an informed guess has an edge over a wild one.

...

Let us suppose your stock is selling for $60 a share, and that its latest year's earnings are $2 per share. This Price-Earnings Ratio then is 30 (60 divided by 2 = 30). Let us suppose that the latest Price-Earnings Ratio reported for the Dow is 15. Divide 30, the Price-Earnings Ratio for your stock (or Index), by 15, the Price-Earnings Ratio for the Dow. The answer, of course, is 2. This means that the market is paying twice as much for each dollar of earnings of your stock (or index) as it is paying for the Dow-Jones Industrial Average.
The inference is that the market (that is, the consensus of investor money) expects the earnings of your stock (or index) to increase much more rapidly (or decline much more slowly) the earnings of the Dow-Jones Industrial Average. Using this method you still have to guess what the future holds for your stock (or index) relative to other stocks (or indices). If what you expect is better than what the market expects, you buy. If what you expect is less than what the market expects, you sell. But only if the difference between what you expect and what the market expects is great enough to give you a profit after allowing yourself a wide margin of error!"

Second Month of my 2 year experiment to test whether a Single Lump Sum or Dollar Cost Averaging is the better strategy right now...

We commited you to Y200,000 invested in the S&P 500 VOO at price, 412.52 on Sat 05 Feb 22
https://finance.yahoo.com/quote/VOO?p=VOO

We know your Average Price. It's 05 Feb 22 price, $412.52 x 05 Feb 22 USDJPY 115.18 = Y47,514.0536
We know how many units you have. It's Y200,000 / 05 Feb 22 USDJPY 115.18 / 05 Feb 22 price, $412.52 = 4.209 Units.

05-Feb-2022 Y200,000 / USDJPY 115.18 / price $412.52 = 4.209 Units.

Value as of 05-Mar-2022:
4.209 Units x 05 Mar 22 USDJPY 114.78 x 05 Mar 22 price, $397.34 = Y191,958.538 = -4.02%



And I will put my Y200,000 cash into the S&P500 starting 05 Feb 22, Y10,000, and Y10,000 on the 5th. day of every month (or the previous working day) for the next 19 months, and then, at the end of January 2024 we compare the result.
https://finance.yahoo.com/quote/VOO?p=VOO

05-Feb-2022 Y10,000 / USDJPY 115.18 / price, 412.52 = 0.2104 Units.
05-Feb-2022 Y190,000 in the bank at 0% Interest.
05-Feb-2022 Total 0.2104 Units

05-Mar-2022 Y10,000 / USDJPY 114.78 / price, 397.34 = 0.219 Units
05-Mar-2022 Y180,000 in the bank at 0% Interest.
05-Mar-2022 Total 0.4294 Units


Value as of 05-Mar-2022:
0.4294 Units x USDJPY 114.78 x price, $397.34 + 180,000 = Y199,583.51 = -0.2082%



And a third scenario:

My Alter Ego will one day decide to invest another Y200,000 Lump-Sum at the time of my choosing, sometime between now and the end of January 2024. Until then, the Y200,000 of dry powder sits in the bank at 0% Interest...

Not Yet.


Or how about eMAXIS Slim全世界株式(オール･カントリー), as this is so popular...
https://finance.yahoo.co.jp/quote/0331418A

We commited you to Y200,000 invested in the eMaxis at 05 Feb 22 price, Y16,093.
We know your Average Price. It's 05 Feb 22 price, Y16,093
We know how many units you have. It's Y200,000 / 05 Feb 22 price, 16,093 = 12.42776 Units.

05-Feb-2022 Y200,000 / price Y16,093 = 12.42776 Units.

Value as of 05-Mar-2022:
12.42776 Units x Price, Y15,547 = Y193,214.38 = -3.39%


And I will put my Y200,000 cash into the eMaxis starting 05 Feb 22, Y10,000, and Y10,000 on the 5th. day of every month (or the previous working day) for the next 19 months, and then, at the end of January 2024 we compare the result.

05-Feb-2022 Y10,000 / price Y16,093 = 0.62138 Units.
05-Feb-2022 Y190,000 in the bank at 0% Interest.
05-Feb-2022 Total 0.62138 Units

05-Mar-2022 Y10,000 / price Y15,547 = 0.64321 Units
05-Mar-2022 Y180,000 in the bank at 0% Interest.
05-Mar-2022 Total 1.26459 Units


Value as of 05-Mar-2022:
1.26459 Units x Price, Y15,547 + 180,000 = Y199,660.59 = -0.1697%

And again, the third scenario:

My Alter Ego will one day decide to invest another Y200,000 Lump-Sum at the time of my choosing, sometime between now and the end of January 2024. Until then, the Y200,000 of dry powder sits in the bank at 0% Interest...

I will commit to making this investment when the Shiller S&P P/E falls to a more reasonable level...
https://www.multpl.com/shiller-pe

Not Yet

Watch this space.

I've used about half of my available cash over the last couple weeks. Didn't get the timing perfect, but we'll have to see what happens going forward.

I sold a lot of our US stocks in January, which means we have a lot of cash right now. I've been slowly trickling it back into mutual funds. At the current rate it will take about 20 months to do so, but if there is a more substantial fall we'll throw more in.

This is not advice and was a result of me becoming unemployed while the yen was weak and US stocks seemed high, finding out about the possible forex complication for US dividends, and wanting to simplify things.