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Old 09.01.2021, 16:47
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Re: Equity Portfolio Advice

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Thats only because you value the property by guessing rather than it's bid market value of ZERO, you are happy to wait a year, 2 years or 5 years to get your price. Why not apply that to equities & ignore the daily price. You have bought a share in a business not a lottery ticket, thats why Fundsmith strategy will pay off over time.
a bid market value of zero does not equal a market value of zero, however big CAPS you write it.

it's a different asset class that doesn't have bids all the time. It doesn't mean it doesn't have a market value for a relatively quick sale. It also doesn't mean I'm guessing the value it has.

FIRE by real estate is a valid thing, whether you choose to follow this path or not.
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Old 09.01.2021, 16:50
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Re: Equity Portfolio Advice

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Sorry but this is dangerous misinformation. Exiting the market is exactly what a long-term investor should not do. It's time in the market not timing the market that counts. I need to refer again to the chart I shared previously. It includes all of the occasions in the 110 years between 1802-2012 where equities were said to be overvalued, all of the crashes and all of the bear markets. Yet, look at what happened to each dollar invested over that period.
At one point you need to exit and cash parts of your portfolio.
One cannot buy bread/cars/property/childcare with MSFT shares yet.
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  #243  
Old 09.01.2021, 16:58
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Re: Equity Portfolio Advice

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Sorry but this is dangerous misinformation. Exiting the market is exactly what a long-term investor should not do. It's time in the market not timing the market that counts. I need to refer again to the chart I shared previously. It includes all of the occasions in the 110 years between 1802-2012 where equities were said to be overvalued, all of the crashes and all of the bear markets. Yet, look at what happened to each dollar invested over that period.
I would try to be positive about market long-term investment as you are but a word realistic is what comes to mind. Market (or single equities) get reset from time to time, not to zero but to its previous levels historically. In your lifetime, it counts when you take profit instead of waiting another 10 years. What happened in March 2020 it’s just a Mickey Mouse correction. Or do you believe that people will hide behind the equities indefinitely and have a perpetual bulls?

Let me refer to some interesting prospective.
https://www.advisorperspectives.com/...e-stock-market
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  #244  
Old 09.01.2021, 17:45
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Re: Equity Portfolio Advice

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At one point you need to exit and cash parts of your portfolio.
One cannot buy bread/cars/property/childcare with MSFT shares yet.
You missed the point entirely. In the very first post of the thread I stated that my intention is to have a 5% cash/ 95% equity allocation. Right now living costs are covered with income from employment. Later, the 5% cash part should easily be able to cover all living expenses. jacek implied exiting the market completely and this is exactly what a long-term investor should not do. In a worst case scenario there is a prolonged bear market and maybe you have to sell a few units at a less agreeable price to cover some living costs. This is quite different to exiting altogether.
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  #245  
Old 09.01.2021, 17:48
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Re: Equity Portfolio Advice

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I would try to be positive about market long-term investment as you are but a word realistic is what comes to mind. Market (or single equities) get reset from time to time, not to zero but to its previous levels historically. In your lifetime, it counts when you take profit instead of waiting another 10 years. What happened in March 2020 it’s just a Mickey Mouse correction. Or do you believe that people will hide behind the equities indefinitely and have a perpetual bulls?

Let me refer to some interesting prospective.
https://www.advisorperspectives.com/...e-stock-market
You mentioned exiting 'in time' which is not possible. The very first sentence from the article you linked states:

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He is not sure when it will happen, but David Rosenberg is confident investors will face another big correction in the stock market.
I'm actually counting on it and I'll be buying as much as I can. After all, bear markets are when equities transfer to their rightful owners
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  #246  
Old 09.01.2021, 18:10
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Re: Equity Portfolio Advice

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You mentioned exiting 'in time' which is not possible. The very first sentence from the article you linked states:



I'm actually counting on it and I'll be buying as much as I can. After all, bear markets are when equities transfer to their rightful owners
I don’t mean to abandon the market completely, I’m far from it. Just try exit it in time before any serious correction is predicted, in other words one must not be too greedy, watch signals and warnings and decide when enough is enough.

Also amount of money invested is one’s individual choice. Ask yourself fundamental questions and use your common sense. How much risk you can stomach and how much loss you can afford. When you are young and get broke early, you still have got time to recover. However closer to retirement, I would be more cautious with risky investments.

In March 2020 my modest investments lost 1/3 and later they doubled. I will always invest in stocks no matter what. Increase portfolio with time. It keeps me busy just as good as signing the rental agreements with new tenants, paying levies, taxes and rates. I could go all the way to ask to have the managed investments by financial advisor but I like headaches that occupy me with this kinda admin on monthly basis.
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  #247  
Old 09.01.2021, 18:12
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Re: Equity Portfolio Advice

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a bid market value of zero does not equal a market value of zero, however big CAPS you write it.
.
Thats exactly how you value stock market investments, so in a bad market you could argue the stocks are worth more so buy rather than sell.

Since property attracts taxes & running costs, perhaps you should value it negatively rather than zero?

Your link should worry you "Markets revert to the mean" this will also apply to interest rates, if interest rates increase 500% to 'normalise' what will happen to the capital value of your property?
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  #248  
Old 09.01.2021, 18:22
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Re: Equity Portfolio Advice

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I don’t mean to abandon the market completely, I’m far from it. Just try exit it in time before any serious correction is predicted,
Crashes are predicted monthly, very few occur. I don't think many people exited the market in February when it hit a high, obviously it was going to fall with a pandemic, just nobody realised that there would be a pandemic. Market timing is impossible. I remember stating around May/June that the bear market was almost certainly over, few people thanked the post as it seemed unrealistic at the time.
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  #249  
Old 09.01.2021, 18:37
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Re: Equity Portfolio Advice

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Thats exactly how you value stock market investments, so in a bad market you could argue the stocks are worth more so buy rather than sell.

Since property attracts taxes & running costs, perhaps you should value it negatively rather than zero?

Your link should worry you "Markets revert to the mean" this will also apply to interest rates, if interest rates increase 500% to 'normalise' what will happen to the capital value of your property?
Property is tangible piece of estate. Taxes and rates, levies, electricity bills need to be subtracted from monthly rent collected but passive income from rental is always there every month on my bank account. Unlike, the stocks that can fluctuate and change values on brokerage platform, solid rent is rent just like your monthly salary it will be there no matter what. Whenever, I take the tour and look at improvements, repainted walls and new carpets fitted before new tenant moves in, I feel it is there and smell it. Cannot say the same about the virtual numbers of digital stocks that may change in blink of an eye
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  #250  
Old 09.01.2021, 18:42
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Re: Equity Portfolio Advice

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Crashes are predicted monthly, very few occur. I don't think many people exited the market in February when it hit a high, obviously it was going to fall with a pandemic, just nobody realised that there would be a pandemic. Market timing is impossible. I remember stating around May/June that the bear market was almost certainly over, few people thanked the post as it seemed unrealistic at the time.
It’s the psychology of the market that is scary though not the stocks and companies itself. No matter how much technical analysis has been carried out to to find the pick of the week, any event can turn the fortunes around. Pandemic, attack on Capitol, regulated big techs, giant media culpable for harm because done nothing to prevent it, stimulus package hopes and so on.
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Old 09.01.2021, 20:08
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Re: Equity Portfolio Advice

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that's why I said I'm waiting for the crash (that ain't comin').

But I didn't say all-in NASDAQ, I said I'd rather do that instead of the SP500. Just look at the difference of the two since 2002. (about 3x over to NASDAQ).
I might just go VGT instead.
The crash came last March. Were you sleeping or just too afraid to invest?
There was another ~10% correction last fall. Have you missed that too?
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Old 09.01.2021, 20:12
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Re: Equity Portfolio Advice

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I call the 2008 crash a good opportunity, when most of NASDAQ lost 50-80% of their previous value. In March it was merely a stronger correction of already inflated prices. Was a good opportunity nevertheless, but I'm expecting a bigger meltdown.

Basically the stock market's current pricing does not really reflect the rampage that Covid did with the hospitality, entertainment and aviation sectors, just to name a few. I want that revelation to come. Maybe they will come with the 2020 GDP numbers, maybe not.
Right.. but QQQ doesn't invest in any of those sectors.
That may explain the reason why it didn't crash
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  #253  
Old 09.01.2021, 20:34
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That’s a good starting point but try to aim at 5-10 fully paid by age of 50 y/o.

Had too much negative experience with unit trust funds allocated wrongly, hence think of cash 250k aside and 500k in pension by then. If shit is gonna hit the fan, and one day it will, with those highly overvalued equities then the name of the game will be to exit in time.
I have no interest in btl. Those were both houses we lived in (we bought separately before we met).

I might keep them going as it's 30-35K CHF tax free income (basic allowance). Once you are paying tax the return is derisory. I'd be lit up like a beacon for the tax man with more.

With 20-30 years to retirement I can take a serious hit in equities. Arguably I'd be better off in the long run if it happened soon as I only have a relatively small position- 600K or so CHF in equities, and im investing quite heavily - around 100K CHF per year, Every Franc after the Crash invested would buy me more.

I could rebuild my value in 2 or 3 years following a 50% crash tomorrow and then be facing a much more attractively priced market with a similar wealth.

I'd hope to have enough to retire by 40-45 (although I'd be highly unlikely to).
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  #254  
Old 09.01.2021, 20:34
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Re: Equity Portfolio Advice

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Property is tangible piece of estate. Taxes and rates, levies, electricity bills need to be subtracted from monthly rent collected but passive income from rental is always there every month on my bank account. Unlike, the stocks that can fluctuate and change values on brokerage platform, solid rent is rent just like your monthly salary it will be there no matter what. Whenever, I take the tour and look at improvements, repainted walls and new carpets fitted before new tenant moves in, I feel it is there and smell it. Cannot say the same about the virtual numbers of digital stocks that may change in blink of an eye
If people are not working & can't pay the rent, the intrinsic value drops close to zero especially when governments prevent eviction as many do at present. Commercial landlords in London have collected about 30% of expected rent in 2020, many have agreed 50% rent cuts. No way the capital value has not fallen to match the future cash flows.
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Old 09.01.2021, 20:37
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Re: Equity Portfolio Advice

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The crash came last March. Were you sleeping or just too afraid to invest?
There was another ~10% correction last fall. Have you missed that too?
Every year there are 10% drops usually 15 to 20%, volatility is one of the attractions as wealth gets transferred to the very few investors that hold regardless.
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Old 09.01.2021, 20:43
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Re: Equity Portfolio Advice

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I've cashed all previous funds I held in Raiffeisen previously as a "rookie mistake" and will pile up SSON, VGT and Fundsmith as a first step(s) - about 20% of the cash reserves.
T
Do you happen to know how much Interactive Brokers charges to buy SSON?
Is that 0.45% of the trade value?
Ref: https://www.interactivebrokers.com/e...p?f=3879&nhf=T
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Old 09.01.2021, 20:51
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Do you happen to know how much Interactive Brokers charges to buy SSON?
Is that 0.45% of the trade value?
Ref: https://www.interactivebrokers.com/e...p?f=3879&nhf=T
It's 0.45 basis points which is 0.045% - that is the LSE exchange fee.
The IB commission is 0.05% of trade value on tiered pricing or £6 per trade on fixed pricing up to £50'000. For purchases above circa £12.5k the fixed pricing structure is cheaper. On all trades there is 0.5% UK stamp tax.
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Old 09.01.2021, 20:57
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Re: Equity Portfolio Advice

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Do you happen to know how much Interactive Brokers charges to buy SSON?
Is that 0.45% of the trade value?
Ref: https://www.interactivebrokers.com/e...p?f=3879&nhf=T
cost me ~0.55% for fees and comms.
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Old 09.01.2021, 21:43
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Re: Equity Portfolio Advice

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If people are not working & can't pay the rent, the intrinsic value drops close to zero especially when governments prevent eviction as many do at present. Commercial landlords in London have collected about 30% of expected rent in 2020, many have agreed 50% rent cuts. No way the capital value has not fallen to match the future cash flows.
If people are not working and cannot pay their rent then they are also less likely to prolong their investments on the stock market. Many people in those difficult times sold their properties or at least tried to sell under financial pressure during lockdown with 10-30% price reduction. That’s why there are many properties on the market now up for grabs at reduced prices. Also banks reduce the lending rates to encourage the first home owners, hence it is also a perfect timing to invest.
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Old 09.01.2021, 21:51
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I have no interest in btl. Those were both houses we lived in (we bought separately before we met).

I might keep them going as it's 30-35K CHF tax free income (basic allowance). Once you are paying tax the return is derisory. I'd be lit up like a beacon for the tax man with more.

With 20-30 years to retirement I can take a serious hit in equities. Arguably I'd be better off in the long run if it happened soon as I only have a relatively small position- 600K or so CHF in equities, and im investing quite heavily - around 100K CHF per year, Every Franc after the Crash invested would buy me more.

I could rebuild my value in 2 or 3 years following a 50% crash tomorrow and then be facing a much more attractively priced market with a similar wealth.

I'd hope to have enough to retire by 40-45 (although I'd be highly unlikely to).
I cannot imagine what would additional 600k invested in real estate buy me in properties that would have been rented out now. Probably would have retired earlier paying off 10 of them soon enough and retiring at 50’s. Horses of courses. Invest in what you believe, will be worth more tomorrow. At the end of the day, you have choices but time in employment is also limited. People who have their well paid jobs should be grateful.
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