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View Poll Results: I have retired early, and I attribute my investment success to...
Buy and Hold "boring" investments 69 84.15%
An aggressive approach involving individual stocks, etc. 13 15.85%
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Re: I Attribute My Investment Success To...
Old 07-05-2006, 10:01 PM   #21
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Re: I Attribute My Investment Success To...

Al--
I have to answer "both". During the accumulation years, I had my big wins from starting a company and selling it -- it was a completely undiversified strategy where I bet the farm, bet on myself and my partners' ability to make the thing work, and then got lucky enough to find someone who'd pay us today for the future earnings potential of the firm we'd built. Success then was defined as: build up a nest egg big enough to ER on." Non=diversification helped me get there fast.

But now that I'm ER, I have a completely different approach, defining investment success as "have a low-volatility portfolio that delivers 8 or 9% on average and doesn't take much time or emotional energy from me". For this stage, it's all about hanging on to what we have and making it work as the ER engine, giving us those monthly living expenses without emotional angst. Buy-and-hold, widely diversified but boring indexes are now driving our 'success'.

So I guess it depends...
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Re: I Attribute My Investment Success To...
Old 07-05-2006, 10:07 PM   #22
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Re: I Attribute My Investment Success To...

Quote:
Originally Posted by unclemick2
A little cross thread - going with Missouri 529. Drum roll please - Vanguard age based sliding asset mix, moderate option.

Who'd of thunk it.

heh heh heh heh heh heh* heh
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Re: I Attribute My Investment Success To...
Old 07-05-2006, 10:13 PM   #23
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Re: I Attribute My Investment Success To...

Quote:
Originally Posted by ESRBob
But now that I'm ER, I have a completely different approach, defining investment success as "have a low-volatility portfolio that delivers 8 or 9% on average and doesn't take much time or emotional energy from me".
What is low volatility? 8 or 9% return is the high side of market return in the next ten years according to the 'experts'.
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Re: I Attribute My Investment Success To...
Old 07-05-2006, 10:26 PM   #24
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Re: I Attribute My Investment Success To...

Spanky,
For me, low volatility is a portfolio with a standard deviation below about 8%, which is to say, below the standard deviation of a simple 50-50 SP500/US Treasury portfolio.

That means that 68% of the time, annual returns can be expected to fall between one SD below and one SD above the average return. 95% of the time, returns can be expected to fall between 2 SDs below and 2 SDs above the mean. (In this case, between -7% and 25%) Short term volatility may still bite you, but annually these numbers hold up historically.

For overall expected portfolio return, whether 8-9% is on the high side definitely depends on whether you think the future will be worse than the past. Historically, 8-9% has held up over long periods if you keep the cash and short-term bonds part of the portfolio to a minimum.
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 03:13 AM   #25
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Re: I Attribute My Investment Success To...

i dont fall into succsess i fail into success
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 05:46 AM   #26
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Re: I Attribute My Investment Success To...



Neither. After I realized I had enough to ER or ESR, I opted for boring buy and hold investments. I accumulated the money by LBYM and some nice pay days.
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 06:38 AM   #27
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Re: I Attribute My Investment Success To...

Marrying smart. I'd be a pennyless idiot without DW. Now I am much happier idiot.
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 09:00 AM   #28
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Re: I Attribute My Investment Success To...

Interesting how many ERs took considerable financial risk to get a big enough nest egg to ER (risk that any financial advisor would strongly counsel against), and then switch to a super conservative approach after retirement.

Of course - that's not surprising at all to me. It takes risk to build considerable financial reserves. It takes a conservative strategy to then preserve the wealth (and major risk is no longer required).

But it might not have been obvious to those not yet ER'd that the strategy during accumulation phase is drastically different from the strategy after retirement.

Audrey
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 09:16 AM   #29
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Re: I Attribute My Investment Success To...

I buy individual stocks for domestic equities and rely on MFs for foreign. I don't think of it as any more risky than buy and hold index funds. I have ~ the same industry weightings as the S&P (really fundemental indexation weightings but that is a long discussion) and rebalance often. My beta is slighly under 1, and though I have never measured it I imagine my standard deviation is near the markets. I will buy individual bonds when that time comes but I am only 28 so the small portion attached to bonds now is in MFs as well.
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 09:21 AM   #30
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Re: I Attribute My Investment Success To...

Sheryl

Yep *- not related - 4 of them: twin girls 3mo, boys 5 and 10.

Back to the thread - 1966-1992 all my great but risky adventures were so so, lost money or broke even when all was said and done. Luckily back at the ranch - I maxed 401k, IRA - before I rode forth with great investment ideas.

I was unemployed at 49 - mentally shifted to retirement in the stretch - crossed the million about 6/7 yrs into ER - mainly cause I'm a cheap bastard and the history of the 90's with boring balanced index.

Now I'm trying to reverse lifestyles a tad before before 60's become my 70's. Another mental shift. Cheap was a lot of fun.

Ah that elusive balance thingy.

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Re: I Attribute My Investment Success To...
Old 07-06-2006, 09:28 AM   #31
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Re: I Attribute My Investment Success To...

I knew that it might be hard to fit yourself into one category or the other; you just need to find the one that most nearly matches your style.

I also took more risk when younger. *That pattern may be due to hormones, or to learning. *I'm quite sure that if I'd done all my investing in an S&P index fund, I'd have done better than with my active approach in early years. *If I just figure in the $12,000 that was totally lost in two limited partnership deals around 1980, I'd see a difference.
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 09:41 AM   #32
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Re: I Attribute My Investment Success To...

Quote:
Originally Posted by TromboneAl
I knew that it might be hard to fit yourself into one category or the other; you just need to find the one that most nearly matches your style.

I also took more risk when younger. *That pattern may be due to hormones, or to learning. *I'm quite sure that if I'd done all my investing in an S&P index fund, I'd have done better than with my active approach in early years. *If I just figure in the $12,000 that was totally lost in two limited partnership deals around 1980, I'd see a difference.
I also took more risk when I was "younger". My first stock buys were in the early 1990s and were blocks of 100 shares at a time of a few basic companies. Over time, these were added to or sold off and other blocks purchased from time to time. I also ventured into a couple of MFs along the way and one I still own. (Vanguard Healthcare Fund).

Over the past few years I have traded a lot less and am now buying MF instead of individual stocks. I am still out of balance on the equity side but plan on correcting that over the first few years of ER. My rollover IRA is already balanced but my current 401k is heavy in equities...but all are mutual funds.

I was never really much of a "trader" per se. I collected stocks and hated to sell them off. I now have a plan to start the sell off and reinvestment cycles to eventually eliminate almost all my individual stocks. I think my hormones are under control and I would prefer a set it and forget it portfolio to one I have to watch all the time. I have better things to do with my time than play at day trading. Besides, I am too lazy to invest all the time required to research indidividual stocks. It just seems too much like work.
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 01:21 PM   #33
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Re: I Attribute My Investment Success To...

As of today most of my money (as an investor) was made / is still in real estate...
Paychecks and cashing shares of a startup later listed on the nasdaq fueled the system.

Percentages are given as % of my total NAV

Commercial RE: 36,49%
Other RE: 46,63%
Paper RE: 1,61%
Cash: 1,01%
Money Market: 2,87%
Bonds: 0%
Stocks: 12,82% decomposed as (3% europe 8% US 1% Asia) & trading 1%
Running debt (mainly taxes, etc.) -2,03%

I've been very aggressive on stocks these last three years, growing by 2% per year the exposure... which makes a lot of money in fact. I was somewhere around 13,35% of NAV early May and hoped to reach 14% by year end, but the market does not help me. Should be 20% of my total NAV in less than 3 years anyway.
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Re: I Attribute My Investment Success To...
Old 07-06-2006, 09:13 PM   #34
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Re: I Attribute My Investment Success To...

Started buying fourplexes in southern california in '96 after accumulating a few dollars from two years of paychecks.* This after a fledgling business I started never took off.* Early 90s... flat broke* :P

Have 1031'd up the real estate food chain.* Now I'm primarily invested in apartment buildings.*

Other NW in 401k, ESOP and, like Laurence, bubble-icious San Diego home equity.
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Re: I Attribute My Investment Success To...
Old 07-08-2006, 10:05 AM   #35
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Re: I Attribute My Investment Success To...

I didn't have any investments until I was in my late 30's and joined a company with a 401(k) plan. I am a UK import who came over on temporary assignments from '87 to '92 when the company offered me a permanent position working in the USA. This was the 4th company I had worked for and was starting on my 4th final salary based pension plan and fortunately realized that I needed to look into some other way of enabling me to RE.

I bought a 3-month trial subscription of Money Magazine because it came with a free book on strategies for building wealth to retire early. I have learned a LOT more about this subject but that book really set me on the right course and I have pretty well followed it's advice.

I have only ever invested in mutual funds but as I have aged my mix has changed from 100% stocks to 40% stocks, to 60% bonds now that am close to ER. (this is now more conservative than the advice in the book but I had some great years during the 90's plus very good promotions to greatly increase savings and I am at the point where I could ESR now no problem).

I have always re-balanced every 6 months and DCA'ed. As my salary increased I maintained my standard of living rather than buying bigger cars, boats and houses etc.

I do find that the closer to ER the harder it is to keep working, particularly now my DW has ER'ed and can do things go to England for 6 weeks in the summer (that's where she is now).
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Re: I Attribute My Investment Success To...
Old 07-08-2006, 10:46 AM   #36
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Re: I Attribute My Investment Success To...

Save the max (or very near the max) in the 401k; open an Ameritrade account and fund it as fast and furious as possible; throw mucho money into CDs.
Own Dodge&Cox funds, also.
Have no debt, except for the house. Buy automobiles on credit, but pay the loan with great speed.
Big purchases from Lowe's or Home Depot or furniture stores are initially bought on credit (safe way because you don't have to pay before receiving the product); credit with 6 or 12 months same as cash; and then paid off before having to pay any interest charges.
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Re: I Attribute My Investment Success To...
Old 07-08-2006, 11:13 AM   #37
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Re: I Attribute My Investment Success To...

My fool-proof plan (plesae feel free to try it out for yourself):

1. Save until it hurts.
2. Save some more.
3. Invest it all in the stock market.
4. Keep it there, untouched, for at least 35 years.
5. Sleep well.
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Re: I Attribute My Investment Success To...
Old 07-08-2006, 11:23 AM   #38
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Re: I Attribute My Investment Success To...

Quote:
Originally Posted by mickeyd
My fool-proof plan (plesae feel free to try it out for yourself):

1. Save until it hurts.
2. Save some more.
3. Invest it all in the stock market.
4. Keep it there, untouched for at least 35 years.
5. Sleep well.
That's very similar to my plan, except for 3, I do it via MF rather than individual stocks.

As for the topic at hand, I attribute my success, albeit limited, to screwing up in college and racking up CC debt. I don't think I'd have as healthy of an appreciation for money if I hadn't made those mistakes in the first place.
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Re: I Attribute My Investment Success To...
Old 07-08-2006, 03:55 PM   #39
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Re: I Attribute My Investment Success To...

Quote:
Originally Posted by mickeyd
My fool-proof plan (plesae feel free to try it out for yourself):

1. Save until it hurts.
2. Save some more.
3. Invest it all in the stock market.
4. Keep it there, untouched, for at least 35 years.
5. Sleep well.
Yep. that pretty close to what I have been doing for 20 years. I've also learned that by having no debt, being a savy shopper, & working the tax angle you can be a good saving & yet still have "rich" lifestyle. Last year we spent only 27K (not including taxes) & saved the rest. However there are only 2 of us.
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Re: I Attribute My Investment Success To...
Old 07-08-2006, 04:07 PM   #40
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Re: I Attribute My Investment Success To...

Quote:
Originally Posted by dmpi
Yep. that pretty close to what I have been doing for 20 years. I've also learned that by having no debt, being a savy shopper, & working the tax angle you can be a good saving & yet still have "rich" lifestyle. Last year we spent only 27K (not including taxes) & saved the rest.* However there are only 2 of us.
"Only 2 of us" - Boy, I'm looking forward to that day - may be within a year. Daughter is graduated, married and got a good job. Son is, hopefully, 7 - 8 months away from graduating, then got to get a job etc. I'll never get to 27K/year though, unless needs must of course.
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