RetireJapan

Deep Blue wrote: ↑Sun Mar 03, 2024 9:11 am
Investing is a bit like losing weight. It's very simple and the actual steps of eating less, eating healthier and doing more exercise are not rocket science. Same with long term investing - buy a simple low cost diversified passive equity fund and then don't touch it.

However, in practise it is harder and emotions and real life get in the way of both.

Just like eating half a packet of biscuits, the urge to take profit is strong... and we can always find ways to justify why it's "ok" to do what we want...

Help me understand. Isn’t the idea to keep investing until you need the money? In your example of the biscuits, you can continue after the binge, watching what you eat and continue on the right path. But doesn’t taking profits fly in the face of everything we know? Does that money lie in the bank eroded by inflation? How is that not timing the market?

Deep Blue wrote: ↑Sun Mar 03, 2024 9:11 am

banders wrote: ↑Sun Mar 03, 2024 8:31 am
It was a 'comfort thing' when I declined to buy more All Country in the new year because it was at an all time high. Guess what. It continued higher. So I bought higher. You either time the market or you don't. That is timing, but your message is always not to do so. So which is it? If you are no longer investing, then fine; to the victor go the spoils. Otherwise, I don't think it's a good idea to meddle.

Investing is a bit like losing weight. It's very simple and the actual steps of eating less, eating healthier and doing more exercise are not rocket science. Same with long term investing - buy a simple low cost diversified passive equity fund and then don't touch it.

However, in practise it is harder and emotions and real life get in the way of both.

Just like eating half a packet of biscuits, the urge to take profit is strong... and we can always find ways to justify why it's "ok" to do what we want...

+1

banders wrote: ↑Sun Mar 03, 2024 8:31 am It was a 'comfort thing' when I declined to buy more All Country in the new year because it was at an all time high. Guess what. It continued higher. So I bought higher. You either time the market or you don't. That is timing, but your message is always not to do so. So which is it? If you are no longer investing, then fine; to the victor go the spoils. Otherwise, I don't think it's a good idea to meddle.

I think we're moving into the 'figure out how to spend it' phase rather than the 'save and invest it' phase.

Not completely, but just starting to feel our way.

It's fascinating, as the psychology and mindset is completely different.

I’m still in the accumulation stage, but when I get to the next stage I am supposed to still stick with my portfolio, the asset allocation that I decided upon, assuming it does what I need.

When taking money out, I am supposed to sell assets so as to keep the asset allocations in line with my model portfolio, just rebalancing on the way out.

I tried now zeroing out my 20% bonds allocation and shifting it to developed market equities (using myindex.jp). As a result the returns went up by 1%, and the risk went up by more than that, with negative impact on the Sharpe ratio. Maybe I would be ok to do that now while I am accumulating, but I doubt I would take that option in the next stage.

RetireJapan wrote: ↑Sun Mar 03, 2024 10:12 am

banders wrote: ↑Sun Mar 03, 2024 8:31 am It was a 'comfort thing' when I declined to buy more All Country in the new year because it was at an all time high. Guess what. It continued higher. So I bought higher. You either time the market or you don't. That is timing, but your message is always not to do so. So which is it? If you are no longer investing, then fine; to the victor go the spoils. Otherwise, I don't think it's a good idea to meddle.

I think we're moving into the 'figure out how to spend it' phase rather than the 'save and invest it' phase.

Not completely, but just starting to feel our way.

It's fascinating, as the psychology and mindset is completely different.

OK, then that’s a different story. But for those of us that aren’t ready to draw down, let’s say I bought 100 shares or index funds at $100 and the price rises to $200. I have made $10,000. If I sell 50 shares/units, I will have 50 left and I’m where I started. If the price then rises to $400 I will have $20,000 but if I hadn’t sold any I would have $40,000. So with 50 shares the price would have to rise to $800 to be in the same position. That’s the potential. If the price falls I wouldn’t be selling anyway. Am I right in thinking taking profits isn’t beneficial to those of us still saving?

I’m not taking profits, and it is not in my plan to try to take profits.

I have theories that some people might try to take profits at opportune times (and now does sort of seem like one), but if you are in this for another 10 or 20 years then you ought not think about it.

(I do speculation on the side, which perhaps helps whet my appetite for market timing with my long term investments.)

banders wrote: ↑Sun Mar 03, 2024 10:32 am Am I right in thinking taking profits isn’t beneficial to those of us still saving?

That's what we did until we got over our 'number' and close(r) to retirement.

If you haven't reached your goal, what would you do with the profits? Reinvest them later? In that case probably better just to leave them in.

We're looking at a safe withdrawal rate of under 3% if we retired now, and that is without taking our pensions into account. So while I am still slightly paranoid, I think things are as good as they might be.

captainspoke wrote: ↑Sun Mar 03, 2024 9:58 am

Deep Blue wrote: ↑Sun Mar 03, 2024 9:11 am

banders wrote: ↑Sun Mar 03, 2024 8:31 am
It was a 'comfort thing' when I declined to buy more All Country in the new year because it was at an all time high. Guess what. It continued higher. So I bought higher. You either time the market or you don't. That is timing, but your message is always not to do so. So which is it? If you are no longer investing, then fine; to the victor go the spoils. Otherwise, I don't think it's a good idea to meddle.

Investing is a bit like losing weight. It's very simple and the actual steps of eating less, eating healthier and doing more exercise are not rocket science. Same with long term investing - buy a simple low cost diversified passive equity fund and then don't touch it.

However, in practise it is harder and emotions and real life get in the way of both.

Just like eating half a packet of biscuits, the urge to take profit is strong... and we can always find ways to justify why it's "ok" to do what we want...

+1

I would say that budgeting matches weight maintenance more closely. Investing might more closely match weight training or bodybuilding.

Self-control, delayed satisfaction, gradual progress, and long-term commitment.

RetireJapan wrote: ↑Fri Mar 01, 2024 3:49 am Just did my monthly net worth spreadsheet. Seems like everything is going up at once.

Makes me nervous

Another year of living expenses accumulated in Feb. Net worth ATH. Pretty crazy stuff.

How's everyone else doing out there?

I thought you’d never ask. I added up the value of my properties, stocks, bonds, cash, gold, silver and Silver Age comic books (you laugh!) and came up with a ridiculously small total. I’m no hot-shot self-proclaimed investment guru or Big Time Gaijin in Japan Tycoon, just an English teacher who used to do weddings. No NISA. One ETF. 21 stocks. Five government bonds in an Anglo-Saxon democracy. Cash in the bank. Cash and such in my getaway bag.

And no one helped my wife and I to buy our properties. No inheritances. Just the two of us and my massive down payments on the house we live in and our second property. Actually, our last three properties were bought with no down payment. Yes, it can be done.

This forum is full of great information.

Don’t follow the crowd.

Tsumitate Wrestler wrote: ↑Sun Mar 03, 2024 1:47 pm

I would say that budgeting matches weight maintenance more closely. Investing might more closely match weight training or bodybuilding.

Self-control, delayed satisfaction, gradual progress, and long-term commitment.

Or "revenge".

Which in my humble opinion gets painted in an unfair light.
It's said "revenge is a dish best served cold" (But even better to ensure it has no odd tastes or aroma..)

My "revenge" is to be able to stop working in corporate hell in my mid-50s.
Curbing expenditure these last few years, along with maximizing our investing have made me feel like Andy in Shawshank prison slowly chiseling away.

And before someone helpful suggests it.
It would have been pointless to move someplace else as that would be more of the same with risk of even more "strong personality" possessing man-children. The fin-tech space large occupied by 'self made men who worship their creator'. (Not sure who that is credited to.)
Moving to another industry and "retraining" (or in my case "training") would ensure I'd be working until 70+ due to the drop in income.
So here I've sat for several years, quietly biding my time. Then wham! One day in the not to distant future I'll be gone taking the good stapler with me!
OK. I'll admit, as revenge plot arcs go it's not going to have Hollywood fighting over the script.
Much more Wes Anderson than a DiCaprio vehicle.