Feel Like a Fool and It's My Own Fault ...

[The Cosmic Avenger]

Once I finally figured out AA and index funds, I decided to take an account with about $40K and experiment with that, since as someone else said, it was about 10% or less of my total retirement savings. I bought Apple and Google back in 2008, because I followed tech news very closely and knew about Alphabet and Apple TV before most people, and figured these companies were not only dominating their markets, they were funding innovative research. This was before I had ever heard of "FANG". I sold off a little of that to buy some Tesla stock at around $170.

Those tech stocks obviously did well, so I got cocky and in late 2016 figured I'd dabble in cryptocurrencies. I bought a fair amount of Bitcoin, Litecoin, and Etherium, and put smaller amounts into a bunch of smaller CCs, hoping one might be the next Bitcoin.

My $9K investment is worth about 25% of that now.

But I console myself by remembering that I still haven't lost more than 10% of what I made on those tech stocks!

 

[meleana]

This is why there is so much discussion here of risk tolerance and asset allocation.

You bet I've made some risky/bad investments.... and it always worked out badly for me. So I switched to index funds because I learned that I am a *terrible* stock picker. And it's why I temper the gains/losses of the equity market with a chunk in bonds and fixed income.

Fortunately, I discovered my bad stock picking ability before I was ready to retire... Didn't have to delay my retirement.

But I find even the bonds go down when the stocks go down. Only cash hangs tough.

 

[Cut-Throat]

But I find even the bonds go down when the stocks go down. Only cash hangs tough.

Bonds may drop, but not near as drastically as stocks. And a little Cash is fine, but usually much less growth than Bonds.

 

[VanWinkle]

But I find even the bonds go down when the stocks go down. Only cash hangs tough.

Recency bias leads to bad decisions. Cash is fine to a point, but high quality
bond funds can really offset a bad year in the stock market. Does it happen every time? No, but it happens much more often than not. I play the percentages for success and don't change course due to one storm.

 

[meleana]

Recency bias leads to bad decisions. Cash is fine to a point, but high quality
bond funds can really offset a bad year in the stock market. Does it happen every time? No, but it happens much more often than not. I play the percentages for success and don't change course due to one storm.

Yes- I know that is the standard belief but I haven't seen much of that in my lifetime and I am 62. That said, I do have bond funds.

 

[COcheesehead]

I show about a 4% on average overall return on bonds. They really helped out last fall when the market took a dive especially muni’s.

 

[meleana]

I show about a 4% on average overall return on bonds. They really helped out last fall when the market took a dive especially muni’s.

Individual bonds or bond funds or bond etf's?

 

[IMATERP]

Everyone has made an investment mistake in their life. Many of us - more than one. My mistake was Lehman. Too big to fail, yeah, right...

If you want to be a retiree, you need to invest like a retiree! Reduce risk and set an asset allocation that you can be comfortable with (under any and all circumstances.)

On December 16, 2017 (at 56) I accepted a nominal buyout. I adjusted my asset allocation from 50/50 to 30/70. I could do that because:
a). Spending rate is low, and
b). I will receive a State pension and healthcare for life, upon attaining age 60.

Work with your own circumstances. Don’t gamble.

I

 

[Dtail]

Hey I made a "rookie" mistake last year in my first full year of retirement.
Kept thinking about increasing my small cap % and getting into NASDAQ.
Finally did it at midyear and absorbed the worst through the 2nd half of the year.
Finished around ~2% behind relative benchmarks.

Simplified the portfolio somewhat at year end and so far 0.51% ahead of benchmark in 2019.

 

[VanWinkle]

Hey I made a "rookie" mistake last year in my first full year of retirement.
Kept thinking about increasing my small cap % and getting into NASDAQ.
Finally did it at midyear and absorbed the worst through the 2nd half of the year.
Finished around ~2% behind relative benchmarks.

Simplified the portfolio somewhat at year end and so far 0.51% ahead of benchmark in 2019.

Seems like every time I tinker, I pay the price. I finally stopped tinkering and things seem to be better. It is hard to pick the hot hand.

Best to you Dtail,

VW

 

[COcheesehead]

Individual bonds or bond funds or bond etf's?

About 90% of my bonds are in individual bond ladders.
Muni for my taxable and corporate with some agency in deferred.
I use a "go anywhere" fund for the remaining 10% to access parts of the bond market that I can't. Its PTIAX and it currently yields about 5.60%

 

[The Cosmic Avenger]

In a way I am kind of glad I lost some money on cryptocurrencies, it helps tamp down on my FOMO (fear of missing out). Every time I think maybe I should invest more in stocks, I remember that there's a reason I chose my AA, and that I'm willing to give up some potentially big profits in exchange for much more stability and predictability.

 

[SoReadyToRetire]

Yes, you're right--it was NVDA. And this was my "play money"--ie, cash out of our checking account. So I turned $78K into about half that. I still own all 300 shares. Watched it recover up to $160 in the last month or so, then drop back down $24/share this week. I hope Jen Hsun isn't lying about everything ...

It's been interesting reading all these varied responses. I had been working with a FA during the past several "boom" years who had me using Model Portfolio Theory. My accounts just sat stagnant while my husband's self-directed account, mostly in Fidelity Magellan & Puritan mutual funds, grew bigger and bigger. Even my "fixed income" funds that my current 401k is partially invested in were losing--how the bleep does THAT happen?

So I got sick of missing out and switched my retirement money into Fidelity Magellan and Puritan, too. It has grown significantly since then, thankfully. (Those are the high-risk funds I mentioned.)

Right now I'm afraid to do much of anything, so I'm sitting on what I have.
(I didn't panic in 2008 when everyone around me was selling; I just kept putting in as much as I could <*pats self on back*>.) I do pretty much everything others advise--LBYM, have no debt, use Citi Double Cash Card for most of my purchases and pay it off in full every month, etc. So for the most part we're pretty smart with our money, I'd say.

Money management is just plain hard.

 

[NW-Bound]

Yes, you're right--it was NVDA. And this was my "play money"--ie, cash out of our checking account. So I turned $78K into about half that...

What I hate about doing an individual stock is when a sector your stock belongs in is going up, but your stock does not participate because of its own peculiar problem.

So, I still have a bit of individual semiconductor stocks, but have a lot more in ETF, to the tune of several 100Ks. And I have gained, and lost more than $100K in a few days or week as the sector bounces around. Right now, it is going up, except for NVDA.

Sorry for your loss. I have lost and gained a lot more than what you did in this sector, ever since I started doing individual stocks more than 20 years ago.

 

[Joggernot]

Something I learned last week. My brother put $5k in Treasury Bonds (I series) in April 2001. Last week he redeemed them for $13.8k. Seemed like a good investment with no loss over 17 years. Yes, stocks do better, but this wasn't bad for a retirement nest egg.

 

[meleana]

Something I learned last week. My brother put $5k in Treasury Bonds (I series) in April 2001. Last week he redeemed them for $13.8k. Seemed like a good investment with no loss over 17 years. Yes, stocks do better, but this wasn't bad for a retirement nest egg.

We have close to $30,000 in I Bonds. Was purchasing small denominations every month for quite a few years.


Also, years ago I converted all our EE Saving Bonds to electronic format. Once they mature, I take that money, which just sits in a zero interest account, and buy more I Bonds.

 

[Sunset]

that's at least 3 of us on this thread who got bit by WorldCom, plus my dad as I referenced in my post.

Count me in too.. I only bought a little, but it was the week before the CEO was accused/charged of criminal behavior

That really showed to me , no matter how hard I look at a company, there is still a lot of risk of bad company executives, something that broad ETF's avoid by owning 1,000's of companies.

 

[WestUniversity]

This is why there is so much discussion here of risk tolerance and asset allocation.

You bet I've made some risky/bad investments.... and it always worked out badly for me. So I switched to index funds because I learned that I am a *terrible* stock picker. And it's why I temper the gains/losses of the equity market with a chunk in bonds and fixed income.

Fortunately, I discovered my bad stock picking ability before I was ready to retire... Didn't have to delay my retirement.

Ditto. Really took a hit during the dot bomb meltdown and the subprime meltdown. Experienced a few other dings along the way as well. Glad I found this site and the Bogleheads site. Also read Bogle’s book on commonsense investing. All indexes now and no financial advisors...

 

[Kroeran]

+1 if I could only invest in a fund that would take the opposite side of each of my individual stock positions then I would be a lot wealthier Luckily I gave up after losing $20k. Took 7 years of capital loss write off to get over that one.

I wonder if this is a testable strategy.

Step one is identifying an efficient signal receiver of sucker impulses. It might be an relative, it might be financial media buzz, it might be you.

Then you do the opposite of your emotional impulse, (George) Constanza contrarianism. Short the stocks.

Spread risk over several stocks and paper trade first, cover outside risk of an upside runaway with a deep out of the money call?

 

[Kroeran]

Seems like every time I tinker, I pay the price. I finally stopped tinkering and things seem to be better. It is hard to pick the hot hand.

Best to you Dtail,

VW

Life boredom is the instigator.

A little risk is a human need, but you need to insulate your foundational core from this impulse

My rule is near zero risk tolerance with marriage, career, and investments. Borrrrring is best

Pence rules with opposite sex.
Feed your shopping impulse at the dollar store or on Craigslist.
Feed your gambling impulse at a low stakes poker table.

 

[Rianne]

Memories...we lost $60K in 2012, house sale in Michigan. 2008-2011 I don't have to mention our portfolio. You think you're doing the right thing and BAM, huge mistake. So much is out of our control. Look to the future and hope for the best.

 

[NW-Bound]

Sounds like NVDA.

It does. Incidentally, both Apple and Amazon dropped as much as 33% from the 52-week high before rebounding.

That's what one gets for being heavy in any single stock. Risk comes with potential reward.

Or you could be in Lam Research, down as low as 133 from 235. LRCX has P/E of 11 now. Buy, buy, buy?

PS. How about Micron Technology? Down as low as 28 from a high of 65. P/E ratio of 2.8 now. Yes, less than 3. Crazy market, eh?

PPS. The above are trailing P/E. The market says forward P/E will not look so spectacular. That's the rub.

NVDA is at 190 as I write this. It was 145 when this thread started.

I do not have NVDA, but my LRCX is now at 191. MU is at 44.5. And I have more that were not mentioned.

Stocks like the semis and biotechs are what caused my -11.4% loss in 2018. And they are the reason I am up big YTD.

Volatile stocks can make one a lot of money, but are gut wrenching. They reflect investors' greed and fear a lot stronger than the market as a whole. People are now expecting the semi sector to resume its growth, hence bidding it up. Buy, buy, buy...

I don't know about buying more, but have been pondering hard about what to do with what I hold. Do I wait a bit more, or write some out-of-the-money covered calls? Of course I wish I had bought more late last year, so I have more to sell today.

I can feel my greed coming on strong. Gone is the fear of late Dec 2018.

 

[brokrken]

NVDA is at 190 as I write this. It was 145 when this thread started.

I do not have NVDA, but my LRCX is now at 191. MU is at 44.5. And I have more that were not mentioned.

Stocks like the semis and biotechs are what caused my -11.4% loss in 2018. And they are the reason I am up big YTD.

Volatile stocks can make one a lot of money, but are gut wrenching. They reflect investors' greed and fear a lot stronger than the market as a whole. People are now expecting the semi sector to resume its growth, hence bidding it up. Buy, buy, buy...

I don't know about buying more, but have been pondering hard about what to do with what I hold. Do I wait a bit more, or write some out-of-the-money covered calls? Of course I wish I had bought more late last year, so I have more to sell today.

I can feel my greed coming on strong. Gone is the fear of late Dec 2018.

Seems like every time I write covered calls, they get called. I'm horrible at predicting when the best time to do this is. On NVDA, I still own mine, bought it years ago at $10, rode it up to $289, back down to $130 and now back to $190. You're right, it is gut wrenching, but this is a long term hold for me so I'll just have to deal with it.

 

[OldShooter]

Seems like every time I tinker, I pay the price. I finally stopped tinkering and things seem to be better. ...

I haven't been following this thread in detail but I did laugh at this one. I spent 30 years making suboptimal investment moves, though we did make money. What I tell people that I learned from that is:

The more I play with my food, the less food I seem to have.

 

[NW-Bound]

Seems like every time I write covered calls, they get called. I'm horrible at predicting when the best time to do this is. On NVDA, I still own mine, bought it years ago at $10, rode it up to $289, back down to $130 and now back to $190. You're right, it is gut wrenching, but this is a long term hold for me so I'll just have to deal with it.

Semiconductor stocks are extremely cyclical. They went totally nuts in 2000 to stratospheric P/E, then got "normalized" to the total market valuation and lost 80% of their valuation.

Being real businesses and not phony ones like the dotcoms, they continued to grow, but it took them more than 15 years of growing to get back to where they were. One can just look at the ETF SMH to see the history.

PS. I never wrote calls on all of my shares. I always like to keep some. I currently have about 1/5 of my shares on covered calls, and many contracts have become "in-the-money", meaning they will buy my shares from me on April 18 below current market prices. Now, I feel greed coming on strong, and don't want to sell any more options.