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5 Year Review - How to Lose a Million Bucks
Old 11-26-2020, 11:48 AM   #1
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5 Year Review - How to Lose a Million Bucks

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.
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Old 11-26-2020, 11:54 AM   #2
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You've done well.
Your last sentence tells all. If you can't sleep, you probably have the wrong investment allocation.

This past year, I have realized I needed a more conservative approach and made adjustments.
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Old 11-26-2020, 11:56 AM   #3
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Hindsight is wonderful.
Wish I had sold everything, including my clothes, borrowed from loansharks and bought Tesla options a couple of years ago...
I lost a 100's of Millions of dollars ...
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Old 11-26-2020, 12:04 PM   #4
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My only question when looking back is whether I made the best decision I could at the time. @stepford, you made a decision similar to the decision most of us here made at the time -- to avoid taking 100% of the market risk. Decisions involve foreclosing options; by doing this wel foreclosed the option of to benefit 100% from any market rise. I'm still OK with that decision. No sting at all.
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Old 11-26-2020, 12:24 PM   #5
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Originally Posted by stepford View Post
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.
Wow! This is just sooo different than how I look at things. But I guess the world would be a pretty dull place if we all thought alike, whether it be financially, politically, philosophically or any other way.
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Old 11-26-2020, 12:26 PM   #6
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You've done good. But, you were not perfect.

When I get my time machine working again, I will give you a lift back about 10 years. Then we will both be Billionaires today. However, the part I need will not be ready until at least 2162 so don't hold your breath. (Note to self: when traveling into the past bring extra parts that were not yet invented in the past.)

In the mean time, never let the perfect become the enemy of the good.
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Old 11-26-2020, 12:29 PM   #7
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I foolishly did not show up in Mark Zuckerberg's dorm room and offer him $1000 for a share of stock which I then put into my Roth IRA.
Oh, well.
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Old 11-26-2020, 12:30 PM   #8
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Quote:
Originally Posted by stepford View Post
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.

Totally get why you would feel that way, but just think if you had only like 20% equity!??!?
That would be fetal position regret territory
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Old 11-26-2020, 12:30 PM   #9
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If I worried about all the things I could have (or even should have) done I'd never get any sleep.
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Old 11-26-2020, 12:33 PM   #10
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Originally Posted by Sunset View Post
Hindsight is wonderful.
Wish I had sold everything, including my clothes, borrowed from loansharks and bought Tesla options a couple of years ago...
I lost a 100's of Millions of dollars ...
Haha. What I need to time travel for about a few minutes (or more) a few times of my life - that would enable me to make millions if not billions.
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Old 11-26-2020, 12:40 PM   #11
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Quote:
Originally Posted by stepford View Post
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.
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.
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Old 11-26-2020, 12:43 PM   #12
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Originally Posted by OldShooter View Post
My only question when looking back is whether I made the best decision I could at the time. @stepford, you made a decision similar to the decision most of us here made at the time -- to avoid taking 100% of the market risk. Decisions involve foreclosing options; by doing this wel foreclosed the option of to benefit 100% from any market rise. I'm still OK with that decision. No sting at all.


Agree!
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Old 11-26-2020, 12:52 PM   #13
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I foolishly did not show up in Mark Zuckerberg's dorm room and offer him $1000 for a share of stock which I then put into my Roth IRA.
Oh, well.
Choe, a graffiti artist, made over $200 million (from his options $38/share in 2012) for painting a wall at Facebook.
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Old 11-26-2020, 12:57 PM   #14
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Be happy your equity allocation didn't have a big international component. The title of your post could have been "How to lose $1.5 million bucks"!
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Old 11-26-2020, 01:51 PM   #15
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What a day to be worried about "ifs" and "buts"...

All of us would have a lot more money if we could go back in time with the knowledge we have today.

Just consider that at a bit over $3 million, even with not "gaining" anything more, you have still done better than 96% of the U.S. and even better on a world wide scale. Something to be thankful for.
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Old 11-26-2020, 02:17 PM   #16
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Stepford -

I retired about the same time and have seen a similar gain, with a similar AA.

I see the glass half full overflowing. I am amazed and thrilled that I can have a middle of the road AA, spend over $400k in 5 years and still have more than a million more than I started with.
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Old 11-26-2020, 02:32 PM   #17
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What a day to be worried about "ifs" and "buts"...

All of us would have a lot more money if we could go back in time with the knowledge we have today.

Just consider that at a bit over $3 million, even with not "gaining" anything more, you have still done better than 96% of the U.S. and even better on a world wide scale. Something to be thankful for.
+1

Ya done good, Stepford. Be happy.
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Old 11-26-2020, 02:45 PM   #18
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When I sold my house I sat on hundreds of thousands of dollars for a year in a money market account. If I'd had it fully in the market I'd have made a made a ton of money. As it turned out, a few days before I was to close on a new house, the market plunged and I was glad I had it securely in that money market. So, yeah it sucks not to be clairvoyant.
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Old 11-26-2020, 03:07 PM   #19
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Wow! This is just sooo different than how I look at things. But I guess the world would be a pretty dull place if we all thought alike, whether it be financially, politically, philosophically or any other way.
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Old 11-26-2020, 03:17 PM   #20
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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.
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