Originally Posted by PsyopRanger
How did you invest in your 20’s versus their 30’s, 40’s, etc?
20's: Got married in 1982 while still in grad school.* No money, so not much in the way of investing, but lived below our means.* We knew about mutual funds and IRAs. CDs were paying 12% to 15% interest rates in those days and we had some.* A couple years later, moved to Europe and income dropped significantly, so did not add to investments until moved back to the US in* 1986.*
30's: My new job contributed 15% of my salary to the retirement plan and I could contribute an additional 15%, so that's what I did.* *At that time, I made a plan to be able to replace my salary from investments in about 12 years.* This plan required investing in equities, so I chose top-rated mutual funds from Vanguard, Fidelity, 20thCentury (now American Century).* Late 30's switched job to lower cost of living area with higher salary and bought first house.* Lived through October 1987 by taking tax losses.* Basically invested about half our combined income each year, since coming back to the States.* Spouse joined investment club as well which invested in mostly growth stocks.
40's: Met my goal of replacing my salary from investment returns, but taxes on investments were quite a drag.* Those pesky mutual fund distributions in after-tax accounts put a drag on return, so I decided in our early 40's (late 1990's) to buy individual stocks instead.* I work in hi-tech and could see that most internet stocks had no profit, so not invested as heavily in tech as some others, but did well with Intel, Microsoft, Cisco and Oracle (the 4 Horsemen of Tech).* As the market tanked, I booked losses for taxes each year and invested the proceeds into something else in order to stay fully invested.* Also sold covered calls on individual stocks to generate added boost.* Lost money in 2000-mid2002 (we also still have carried-forward losses from those days), but was fully invested through thick and thin, so very nice recovery in last of 2002, through 2006.* Always bought on dips ... always put something into the stock market each month, but tried to buy what had corrected and not the current momentum play.
Late 40's: Decided that individual stocks were not worth it with the rise of ETFs and tax-managed mutual funds.* Portfolio evolved into mostly mutual funds in retirement accounts and mostly ETFs in taxable account.* Finally got wind of asset allocation and now follow something like 40% large cap, 25% international, 20% small/mid cap value, 15% fixed, some REIT, etc in a tax-managed way.
I do not mind buying something and selling it the same day or next day to make a little lunch money.* So while I am mostly buy-and-hold (we have held some investments for more than 20 years now),* I do not mind having some stimulating fun every now and then.
So I think our "core" investment strategy has been the same for 20 years.* It's just the peripheral strategy has evolved.
We are still working, but have 25X of our annual expenses in investments, so I guess we are FI, but not retired.* I think we are all set for when we reach our 50's.