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  #321  
Old 02.02.2021, 21:31
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Re: Equity Portfolio Advice

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The strategy regarding the 200-day moving average I have come across before but not backed up with the data. However, I just chalked it up to chartist nonsense (I may have been wrong).
Are you talking about the "death cross"?
https://www.investopedia.com/terms/d/deathcross.asp
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  #322  
Old 02.02.2021, 21:40
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Re: Equity Portfolio Advice

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Are you talking about the "death cross"?
https://www.investopedia.com/terms/d/deathcross.asp
If I'm not mistaken I think it was a simpler strategy that I came across where you buy when the price rises above the 200-day moving average and sell when it drops below.
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  #323  
Old 02.02.2021, 21:46
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Re: Equity Portfolio Advice

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This is definitely not what anyone is saying. Market timing doesn't work the majority of the time.

I believe the research indicates that an all-in now approach beats a DCA approach approximately two thirds of the time (based on S&P 500 as a base I think?).

What's also interesting to note is the asymmetry of returns per trading day, meaning there is a disproportionate return on very few trading days across decades. You will find examples cited where if you missed the 5, 10, 20 best trading days in x period then your net return would be reduced by x% in each case, and it is significant. As a counterpoint however I was never able to find any examples on what your returns would be if you missed the 5, 10, 20 worst trading days. Nevertheless, time in the market beats timing the market as Buffett would say.

I said it a few pages back in this thread, the best time to plant a tree was twenty years ago, the second best time is today. But I am a hypocrite because a DCA approach is still a form of timing the market, albeit a modified one.

Now, I can elaborate on why I have chosen this approach. The reason is because I have settled on a 95%+ equities allocation and I would like to maintain that indefinitely, perhaps increasing to 98-99% when the 1-2% cash is very significant in nominal terms. This means that I have one chance and one chance only to potentially deploy a much larger percentage of my net worth in a market downturn. I did not have that opportunity last year as I had not settled on my investment strategy at that time. Once I am fully invested I will only have the ability to add to my holdings monthly with my salary.

Therefore, I think the advice would be if you don't have the 'stomach' (as Phil_MCR refers to earlier on the thread) to see large paper losses then start small and build your position at a rate that you are comfortable with. The two key pieces of advice that I think all here will agree on are:

1. start by investing something today
2. don't panic and sell when the market turns
That's sound advice. I was originally a bit upset when I lost £500 or £1000 in a day. Now if i lose £3 or £4k I barely bet an eyelid. You just get used to it.
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  #324  
Old 02.02.2021, 22:05
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Re: Equity Portfolio Advice

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That's sound advice. I was originally a bit upset when I lost £500 or £1000 in a day. Now if i lose £3 or £4k I barely bet an eyelid. You just get used to it.
My goal is seven figure daily swings
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  #325  
Old 02.02.2021, 22:13
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Re: Equity Portfolio Advice

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My goal is seven figure daily swings
you could've done it buying GME all-in 2 weeks ago :P
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  #326  
Old 03.02.2021, 00:18
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Re: Equity Portfolio Advice

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My goal is seven figure daily swings
I had a six today - upwards thankfully. That's still rare though
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  #327  
Old 03.02.2021, 09:08
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Re: Equity Portfolio Advice

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I had a six today - upwards thankfully. That's still rare though
I know SMT had a good day yesterday but how was this possible? Based on your total invested amount that you previously divulged in another thread you would need a huge percent gain for the day for that to be true. Be honest, did you short GME?
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  #328  
Old 03.02.2021, 09:19
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Re: Equity Portfolio Advice

all in on BTC
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  #329  
Old 03.02.2021, 10:06
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Re: Equity Portfolio Advice

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I know SMT had a good day yesterday but how was this possible? Based on your total invested amount that you previously divulged in another thread you would need a huge percent gain for the day for that to be true. Be honest, did you short GME?
so assuming 100k gain, that could be:

2% gain on $5M
5% gain on $2M
10% gain on $1M
20% gain on $500k
40% gain on $250k
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  #330  
Old 03.02.2021, 10:47
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Re: Equity Portfolio Advice

"It's one thing to be down a few thousand. Another thing to be down €100k+. As an untested investor, it is not clear how the OP would react in this scenario."


If my 250,000 investment went down by 100,000, I would probably have a mental breakdown. After that, who knows what could happen.
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  #331  
Old 03.02.2021, 10:56
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Re: Equity Portfolio Advice

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I would probably have a mental breakdown.
Then you probably shouldn't invest £250k in the stock market as there's a fairly decent chance that you experience 20% and even 40%+ falls. Heck, we just had a 40% drop last year. Given current valuations, even 80% drops are not out of the question.
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  #332  
Old 03.02.2021, 10:57
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Re: Equity Portfolio Advice

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I know SMT had a good day yesterday but how was this possible? Based on your total invested amount that you previously divulged in another thread you would need a huge percent gain for the day for that to be true. Be honest, did you short GME?
Oops. I meant 5 .

Unfortunately (/fortunately) it will be a decent time (or a massive crash) before 6 happens.
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  #333  
Old 03.02.2021, 10:57
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Re: Equity Portfolio Advice

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"It's one thing to be down a few thousand. Another thing to be down €100k+. As an untested investor, it is not clear how the OP would react in this scenario."


If my 250,000 investment went down by 100,000, I would probably have a mental breakdown. After that, who knows what could happen.
Then you should not be investing in stocks.
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  #334  
Old 03.02.2021, 10:58
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Re: Equity Portfolio Advice

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If my 250,000 investment went down by 100,000, I would probably have a mental breakdown. After that, who knows what could happen.
I have tried to prepare myself psychologically for a 60%+ drop. I wouldn't invest that much if I were you with that mindset.
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  #335  
Old 03.02.2021, 11:12
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Re: Equity Portfolio Advice

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Then you probably shouldn't invest £250k in the stock market
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Then you should not be investing in stocks.
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I wouldn't invest that much if I were you with that mindset.
There's a saying that goes: "If 3 men tell you that you are sick, lie down."
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  #336  
Old 03.02.2021, 11:12
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Re: Equity Portfolio Advice

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Then you should not be investing in stocks.
FS backmodelling suggests it went down 20% in the financial crisis vs. 50% for equities as a whole.

I think you'd be very, very unlucky to see a 60% crash with Terry stocks. In that situation generally equities would probably be down 80%.
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  #337  
Old 03.02.2021, 11:15
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Re: Equity Portfolio Advice

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Then you should not be investing in stocks.

Well investing in individual stocks is not for me. I am more interested in tracking indexes to achieve average market returns. ETFs or other index funds are what I am looking at. I plan to start initally with 50,000. 2 years down the line I will have a better idea of how to invest the proceeds of the apartment sale.
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  #338  
Old 03.02.2021, 11:20
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Re: Equity Portfolio Advice

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Well investing in individual stocks is not for me. I am more interested in tracking indexes to achieve average market returns. ETFs or other index funds are what I am looking at. I plan to start initally with 50,000. 2 years down the line I will have a better idea of how to invest the proceeds of the apartment sale.
FS is (at least according to FMF's graph), both lower risk and higher return than the index.
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  #339  
Old 03.02.2021, 11:23
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Re: Equity Portfolio Advice

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FS is (at least according to FMF's graph), both lower risk and higher return than the index.
Thats why I was confident to have the majority of my net worth in the fund when I retired, it's still my largest position although Smithson will take first place soon!

Morning star quantified the risk below that of the S&P 500
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  #340  
Old 03.02.2021, 12:00
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Re: Equity Portfolio Advice

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Thats why I was confident to have the majority of my net worth in the fund when I retired, it's still my largest position although Smithson will take first place soon!

Morning star quantified the risk below that of the S&P 500
Hi FMF, may I ask why you're favouring SSON over FS?

If I remember correctly you had posted a graph from SSON prospectus well over a year ago which was suggesting that 70/30 (FS to SSON) was the ideal allocation(less volatility, higher returns)
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