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Old 11-26-2020, 03:22 PM   #21
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Just be glad you didn't sell all your stocks in March this year
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Old 11-26-2020, 03:39 PM   #22
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IMO you learn what you can from "mistakes" in the past, see how you can prevent them in the future, and move on.

So your "mistake" was keeping half your money out of stocks. Do you really think you should go 100% in now? I wouldn't. Nor do I think you made a mistake by going 50/50. Time to move on.
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Old 11-26-2020, 04:05 PM   #23
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Just be glad you didn't sell all your stocks in March this year
I have a friend who did this. Felt he couldn't risk his nest egg in the market after it started falling. He jumped out a week or two into the 4 week collapse so he didn't lose the full 30% that the rest of us who remained invested experienced, but he also missed out when the rocket ignited and the market shot back up. To be honest, I wondered at the time whether he was the smart one, with me being the dummy watching my net worth drop, but now that that we have recovered and I am up 20% from the pre-collapse high, I am very happy I rode it out.
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Old 11-26-2020, 06:53 PM   #24
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Don't we all wish we were either clairvoyant or had access to a time machine. However one hard cold fact remains - I've never been so financially well off in my life than I am right now. So I must be doing something right.
Yeah - great point! We feel very blessed. So what if it could have been more?
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Old 11-26-2020, 07:47 PM   #25
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Yeah - great point! We feel very blessed. So what if it could have been more?
Indeed. I feel so lucky to have "enough". Wanting more is what ruins your life.
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Old 11-26-2020, 08:49 PM   #26
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But seriously: would you think NOW of changing your allocation?
Some might argue that would be reactionary...closing the barn door after the horse is out.
But of late we have entered a new era, it seems, of ultra low in interest rates: those modest fixed income returns are now potentially LOSING you money if they are yielding below inflation.
Therefore the counter argument is that it is not too late now to up the equity level (only if you had been worried about low equity levels).
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Old 11-26-2020, 09:12 PM   #27
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When I started investing years ago, I made so many mistakes that I nearly lost all of DW 401k money. But I learned from mistakes and made corrections then move on. My goals are still out there (e.g. dream house and helping my kids with student loans/house down payments) so I still make decisions with AA to grow my stash but not at the expense of losing sleep over it. I do not know market future, just to apply what I currently know and accept that it's not going to match the market 100%.
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Old 11-26-2020, 09:14 PM   #28
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Think how much more you'd have if you kept working.
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Old 11-26-2020, 09:14 PM   #29
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Think how much more you'd have if you kept working.
Exactly!
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Old 11-26-2020, 10:19 PM   #30
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Indeed. I feel so lucky to have "enough". Wanting more is what ruins your life.
exactly. Enough. It feels good

I was 100% stocks through 2000 (dot com bust) & the 2008 recession...which in my business (SFR housing) was really a depression. Not only did the market tank but our business lost 70% of revenue. Many after dinner walks with DW as I'm trying to figure out if we even have a viable business.

When the market recovered I got more balanced. I know it was a sunk cost & I should have decided & moved more conservative right away
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Old 11-26-2020, 11:02 PM   #31
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Think how much more you'd have if you kept working.
That was actually what was behind this post. When I was working I was the only one among my colleagues expressing a desire to ER. When they questioned the financial prudence of such a move my stock answer was, "Well, I could always use another million bucks, but do I really need it?"

This response was both flippant, because $1M seemed like an awful lot of money to bandy about so casually, and serious in that I suspected 5 years more work would have indeed increased my savings by at least that much. Needless to say to the crowd here at ER.org, I don't regret my decision to retire.

In any case, what occasioned my OP was the realization that my 5 year ER anniversary lent itself to some similarly big round numbers - $1M more than I started with, $1M less than I might have had with a more aggressive AA. I guess I may not have been clear enough in my initial post, but I don't particularly regret my AA in that I feel it was appropriate for my age and circumstances. That said, just as when I was working "I could always use another million bucks" so I'll always feel a little pang when I see the concrete result of my conservative financial policy.

Unlike picking a big winner in the stock market, asset allocation is a choice we all get to make. I just thought it worth noting how large a difference AA can make over a relatively short time.
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Old 11-27-2020, 12:27 AM   #32
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I ER'd just about 5 years ago, and by most standards I've done OK. Started with around $2M at the end of 2015 and now have a bit over 3. But, I've done that with a conservative AA of around 50/50. During those 5 years the equity half of that has roughly doubled (S&P 500 up 90%, some other holdings slightly better). The bond/cash half, however, has returned 10-15% in that time.

So I reach the inescapable conclusion that my conservative approach has cost me about a million dollars over those 5 years. Classic "glass half empty" view of the situation, but it still stings a bit. Granted that I probably wouldn't have slept during those 5 years if I'd gone with the 100% equity allocation that would have given me ~$4M today, but still...

coulda, woulda, shoulda.
Yes, that is now. How about back on 3/23/2020? The balance of a 100% allocation was $2,372,314 while the balance of a 50% allocation was $2,253,450. The difference was only $118,864. What if the S&P500 continued to decline, would you say that your 50% allocation was correct or prudent and pat yourself on the shoulder.
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Old 11-27-2020, 06:49 AM   #33
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It's hard not to look at things like that. An underperforming international equities slice also makes you wonder "what if I had just been more xenophobic?" I track the YTD total return for Vanguard's target retirement 2030 fund which closely mirrors my AA as my benchmark. It is easy to look at our combined gain for the year and compare it to VTHRX instead of just the S&P or some other equity index.
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Old 11-27-2020, 07:20 AM   #34
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One coulda, shoulda, woulda event I play out in my mind is this... in early 2005, I took out an HELOC. The limit they gave me was $175,000. Also, around that same time, I bought a few shares of Apple stock for something like $88.60 per share.

If I had maxed out that HELOC buying AAPL, at the time it would have gotten me about 1,975 shares. Well, soon after that, AAPL did a 2:1 split. Then in 2014 it was a 7:1, and just this year, a 4:1. So, if I had done that purchase, and left it alone, today I'd have about 110,609 shares.

As of yesterday's close, it was $115.17/sh, which would put my holdings at $12,738,894. Even at the 82 cent/share dividend it pays, that would be about $90,699 per year.

Looking back though, I don't know if I would have had the stomach to let it all ride, like that, for all those years. AAPL has had kind of a wild ride, even if the long term trend has been up.

But, while that kind of nest egg would be nice, I'm still happy where I am, financially. I mean, more is always nice, but it's not like I'm starving, in danger of losing the house, or anything like that!
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Old 11-27-2020, 07:28 AM   #35
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Hindsight is a wonderful thing, but it doesn’t matter much in investing your own money.

The purpose of investing is to accumulate enough to achieve financial independence, “once you’ve won the game why keep playing?” Once you reach FI, why look at “woulda, coulda, shoulda? I had a couple 10 and 15 baggers in my 30’s and 40’s, no need to keep taking those risks.

If your objective is to endlessly make highest returns possible, it’s going to be a wild ride with exhilaration and lost sleep...no thanks.
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Old 11-27-2020, 07:50 AM   #36
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When the company finally went public I realized that my master’s degree - which I went part time to get - had been very expensive because I missed out on a 2nd round of lucrative stock options. Stock options were extremely limited after that.

Does it matter now? Nope! I still reached my goals.
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Old 11-27-2020, 08:12 AM   #37
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I thinking just being on the plus side, worth more and just having enough is a blessing. The one comparison mentioned >> Originally Posted by GravitySucks View Post
Think how much more you'd have if you kept working.

makes me even more content with what I have gained in the last 4 to 5 years. I could of made more or done better but I have enough also.

Greed may have gotten us to where we are today and that can be a hard habit to over come.

I can say, if you aren't in the market no matter what AA you have would be very devastating to me. I would rather make a little then not be playing the game.
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Old 11-27-2020, 08:36 AM   #38
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Indeed. I feel so lucky to have "enough". Wanting more is what ruins your life.

Yep. That's it right there. Free from "want" is very freeing; I actually have that most of the time thankfully.
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Old 11-27-2020, 08:37 AM   #39
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I’m certainly not immune to this kind of second guessing of my decisions. Of course I wish I’d owned more U.S. equities in recent years! I similarly recall during the early 2000s wishing I owned more international equities (especially emerging markets), then more real estate, then during the financial crisis, more bonds, all in that order, followed pretty quickly by relief that I did not own more of those specific asset classes.

I guess the feeling of missing out comes with investing. All I know to do is try to be exposed to a little bit of everything with a 50/50 AA to globally diversified index funds, keep costs and trades low, adopt a 20+ year perspective and let each class cycle as it will. Who knows anything? The outlook for bonds is awful but, OTOH, we learned this week that home prices in our neighborhood are up 8% so far this year, both situations due to extremely low interest rates.
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Old 11-27-2020, 08:47 AM   #40
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It is not too late to recover your 'loss'. Start taking more risks, e.g., increased equity allocation or/and bitcoins - which is almost $20K now and estimated to be >200K by the end of 2021.
Easy way to "lose" another million. Or get fantastically rich. Nobody knows for sure.
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