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Old 09-21-2021, 10:00 AM   #81
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I just ran my numbers this morning. My last peak was on 9/3, up 15.29% for the year. I'm now up 11.13%. So, I've been knocked back 4.16%. Not quite 5% yet, for me, but it's in the realm of possibility.
Actually that glass is still 72% full. Pretty good.

I don't think I've ever done that kind of calculation on our portfolio. No reason to, really, as the number is not actionable. A comparison to a benchmark can be interesting and I have been doing that on some nonprofits' portfolio, but our stash is indexed so nothing really to watch.
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Old 09-21-2021, 10:05 AM   #82
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Actually that glass is still 72% full. Pretty good.

I don't think I've ever done that kind of calculation on our portfolio. No reason to, really, as the number is not actionable. A comparison to a benchmark can be interesting and I have been doing that on some nonprofits' portfolio, but our stash is indexed so nothing really to watch.
Yeah, if I watch too much, I just might DO something. Usually, doing something has led to a mistake on my part. YMMV
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Old 09-21-2021, 10:19 AM   #83
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Yeah, if I watch too much, I just might DO something. ...
Yes. The behavioral finance studies have shown that on average retail investors who watch too closely have inferior returns compared to those who do not.

It has to do with humans' risk aversion bias. The "downs" make a bigger impression on us than the "ups," leading to excessive selling.
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Old 09-21-2021, 11:42 AM   #84
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I just ran my numbers this morning. My last peak was on 9/3, up 15.29% for the year. I'm now up 11.13%. So, I've been knocked back 4.16%. Not quite 5% yet, for me, but it's in the realm of possibility.

You made me look. As of yesterday, I was down 3.9% from my high watermark. Thought that was bad, but the S&P was down roughly the same from its high.

However, my stash and the S&P reached their respective high points on different dates. Additionally, I am not 100% in stock, so my stuff has a higher beta than the index, and I have always kept that in mind.
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Old 09-21-2021, 12:57 PM   #85
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Yes. The behavioral finance studies have shown that on average retail investors who watch too closely have inferior returns compared to those who do not.

It has to do with humans' risk aversion bias. The "downs" make a bigger impression on us than the "ups," leading to excessive selling.
Heh, heh, apparently we developed those defense mechanisms back when the bears had big teeth and sharp claws instead of now when the bears are measured in points on an index.
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Old 09-21-2021, 01:09 PM   #86
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Heh, heh, apparently we developed those defense mechanisms back when the bears had big teeth and sharp claws instead of now when the bears are measured in points on an index.
Yeah. Evolution has given us quite a few baked-in behaviors that are not well-suited to modern times.

Another one is the "endowment effect." This shows up in investing as "I'm going to sell it as soon as it gets back to what I paid for it."

Richard Thaler ("Misbehaving") and Daniel Kahneman ("Thinking Fast and Slow") have a lot to teach investors.
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Old 09-21-2021, 01:40 PM   #87
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Another one is the "endowment effect." This shows up in investing as "I'm going to sell it as soon as it gets back to what I paid for it."
The example given sounds to me like the concept of loss aversion.

The endowment effect is assigning a higher value to something that one owns versus something that one would want to own. The classic example I think is randomly distributing concert tickets to a class, and the holders of the ticket ask a higher price to sell than the non-holders are willing to offer.
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Old 09-21-2021, 01:46 PM   #88
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The example given sounds to me like the concept of loss aversion.

The endowment effect is assigning a higher value to something that one owns versus something that one would want to own. The classic example I think is randomly distributing concert tickets to a class, and the holders of the ticket ask a higher price to sell than the non-holders are willing to offer.
Actually I think it's both. Thaler's endowment effect experiments began with coffee mugs. https://www.coglode.com/research/endowment-effect

Fascinating stuff.
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Old 09-21-2021, 06:02 PM   #89
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Heh, heh, looks like the market is doing what I've been too lazy to do: Rebalance my "excessive" equity position back to 30%. YMMV

Anecdotally, it seems like there’s almost always an autumn tumble like this. The reasons that the financial press drum up are always different, but tumble in September-October it often does.
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Old 09-21-2021, 06:53 PM   #90
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Anecdotally, it seems like there’s almost always an autumn tumble like this. The reasons that the financial press drum up are always different, but tumble in September-October it often does.
And to my credit or to my shame, I haven't even looked at my portfolio since my June 30 statements arrived (Sept. 30 is coming right up - I can wait until then to get the "bad" news.) For several years, I've not watched the financial porn channels as they are (for me) worse than nothing. I figure if the world comes to an end, I'll hear about it someplace. YMMV as always.
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Old 09-21-2021, 07:00 PM   #91
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Yeah, once a month when the (paper) statements come in and I remove the old from the 3 ring binder and install the new.
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Old 09-21-2021, 07:14 PM   #92
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The buy on the dip crowd didn't seem to be quite as active as I expected today. The ides of September/October?
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Old 09-21-2021, 08:36 PM   #93
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Yeah, that plummet took us alllll the way back to late July! The horrors!
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Old 09-21-2021, 08:58 PM   #94
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I am knocked back to late August. But then, I don't track one-on-one with the S&P.
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Old 09-21-2021, 09:11 PM   #95
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Yeah, that plummet took us alllll the way back to late July! The horrors!
Sorry. I missed it. Didn't turn on the TV today - except to watch a movie. YMMV
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Old 09-21-2021, 09:18 PM   #96
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Market open today will be bumpy. Get your buy orders ready.
I wouldn't jump in at the first signs of a reversal. One big down day does not mean BUY! BUY! I would want to see several down days.
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Old 09-23-2021, 07:45 AM   #97
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The drop and pop this week shows how difficult it is to time the market. I wonder how may who go out before the dump are still on the sidelines waiting to get back in and missed the pop. Could drop again, could go up, could move sideways. I have found that my crystal ball just isn't reliable enough to forecast the market movement.

I did get lucky as I put away a stash of cash (just lucky - but I'm OK with being lucky) and had dry powder to use and bought on the dip.
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Old 09-23-2021, 09:41 AM   #98
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The buy on the dip crowd didn't seem to be quite as active as I expected today. The ides of September/October?
It wasn't much of a dip, but I did buy $30K worth, as I'm not going to buy bonds these days.
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Old 09-23-2021, 09:45 AM   #99
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Was it a 5% drop? I'm not sure how to calculate it? The DOW? S&P?

Also curious how many bought the drop?

I missed it for two reasons. I wasn't watching and I don't have extra cash. Other than that, it would seem like a possible strategy to buy on the drop. YMMV
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Old 09-23-2021, 09:48 AM   #100
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The buy on the dip crowd didn't seem to be quite as active as I expected today. The ides of September/October?
I have some money I want to move from bonds to stocks. I moved about 1/5th of this money on Monday after the close (Vanguard MFs).

My plan is to continue doing so on the dips. If it had dropped more, or when it does drop again, I'll move more chunks over.

Mathematically this is wrong. I should just reallocate now. But (a) it's a really small amount of money (about 1% of NW), (b) it doesn't matter (I'm at <1% net WR), and (c) it makes me feel better when the market is dropping that I'm at least buying at "bargain" prices.

(I also could just spend more, which in my spreadsheet math would also fix my minor AA issue.)
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