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Old 05-29-2014, 09:51 AM   #21
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Since some people were saving and others not, or not so much, it would seem to me that an IRR between two specific dates would be a better yard stick than a graph of the balance over time.
Agreed, though that data is not readily available, and I'm too lazy to figure it out from spotty records...
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Old 05-29-2014, 06:17 PM   #22
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A market crash is a godsend for people who are accumulating, IF they have the guts to buy.

Yep. The years following the crash were my biggest accumulation years in my 401k- maxing out contributions with catchup contributions at highly reduced share prices. I never changed my AA. I've had a 133% gain in the 401k balance since the bottom.
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Old 05-29-2014, 07:47 PM   #23
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Based on my annual IRR data, here is a graph of my normalized cumulative returns since 1/1/2000. After the 2008 scare, we ramped up the risk considerably by concentrating our portfolio, which accounts for the excess returns in the later years.
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Old 05-29-2014, 08:24 PM   #24
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After the 2008 scare, we ramped up the risk considerably by concentrating our portfolio, which accounts for the excess returns in the later years.
Your high returns in the recent years look like what I got myself in the years 2003-2007. You were concentrated in biotech, I assume, while I was betting on material stocks back then.

Curious people can just look back at price charts of SUNE (formerly WFR, the premier silicon wafer company for solar panels), POT (potash production), FCX (copper mining), even X (US Steel), etc... All were driven by the Chinese economic expansion, or the housing bubble. I was chicken and was not 100% in these stocks and always held 20-30% of cash, else would get more than the 3.3X factor in 4 years.

I have read earlier that active stock pickers have to work to stay on top of things to maintain the performance, and the moment you get complacent you get creamed. I am more conservative now. Look how hard these stocks crashed in late 2008. These are real companies with decent P/E, and no dotcoms.


PS. Even though I was sector-concentrated, I spread my bets out among 50 to 100 stocks. This sector play is easier now with sector ETFs. Of course, one can try to pick the hottest one in each sector, but I did not count on being so lucky (cojones not that big ).


PPS. I did not really trade that much, and tended to ride the stocks until something big broke fundamentally. It was in late 2008 that the demand for raw material suddenly dried up, as if the world stopped spinning.
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Old 05-31-2014, 08:18 AM   #25
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A market crash is a godsend for people who are accumulating, IF they have the guts to buy.

Retirees are like people who are out of ammo in a duck hunt and can only watch.
Well, at least we get to rebalance.
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Old 05-31-2014, 08:33 AM   #26
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Yep. The years following the crash were my biggest accumulation years in my 401k- maxing out contributions with catchup contributions at highly reduced share prices. I never changed my AA. I've had a 133% gain in the 401k balance since the bottom.
+1......I was able to do the same thing for the last three years at work from 2007-2010. The catch up clause in my 457 allowed me to almost double my contributions at that point. I remember people at work telling me I was going to lose everything.
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Old 05-31-2014, 10:46 AM   #27
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FWIW, here is our portfolio's ride over the last decade. Currently 9% above inflation adjusted starting value.



and the AA picture:



Please note the pretty colors .
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Old 05-31-2014, 11:46 AM   #28
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First thing I noted was the pretty colors.
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Old 05-31-2014, 03:00 PM   #29
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... and I see some "bang-bang" control on international/US stock allocation. No visible effects on the bottom line though. Or am I missing something here?
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Old 05-31-2014, 04:52 PM   #30
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... and I see some "bang-bang" control on international/US stock allocation. No visible effects on the bottom line though. Or am I missing something here?
My international allocation is split between large international and midcap international. Each international component is tested against it's US cap equivalent and I go with whatever is doing best. This is a broadly based, completely mechanical algorithm, and employs monthly data. Have done this since 2009 after doing studies going back decades. So far it has done better then holding just straight international.

The portfolio graph includes spending so one cannot easily infer performance from the AA.
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Old 05-31-2014, 07:56 PM   #31
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Agreed, though that data is not readily available, and I'm too lazy to figure it out from spotty records...
It probably looks like one of these anyway.
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