08-29-2021, 05:19 AM
(08-28-2021, 09:44 PM)Kerim Wrote:The tech bubble and aftermath taught me most of the core investing lessons I would ever need in a few years in my taxable accounts. "Stay 100% invested they said". Well I'm not sure "they" meant I should keep adding at triple historical PEs and use some margin to make it even better.(08-28-2021, 09:15 PM)fenders53 Wrote: Ken, no need for you to keep a lot of cash at your age but I do think you should have enough to grab shares on a good dip. Those add up over time.
I second this heartily. I wish I had understood this a bit earlier in my investing life. When you play the game long enough, you'll see a handful of times when the market gets temporarily and badly out of whack. If you have the powder and the conviction, how you handle those rare opportunities can make up a huge percentage of your overall returns.
-always have a little dry powder- lesson learned, I was helpless (and depressed) .... check
-stay diversified, even if the returns aren't as good in the boring out of favor sector.... check
-never sell.... well that only works if you don't build an entire port of companies at grossly high valuations in the first place. Many people are doing that again today, and adding options, cuz YOLO.
Most of the ports on this forum are balanced. This isn't the Motley Fool forum of 1994-98.
If not for my GOV 401K which limited me to a few index ETFs I would have been in trouble there too. There I figured out what a bond fund was for actually for to a younger investor. I hated that 5% yield but it would have been as good as cash when the Nasdaq corrected over 80%. Just a little invested there would have been nice. I was ready for the 2008 GFC, and the next one whenever that year comes.
I can't imagine the market cancelling my retirement, but I've seen it happen to a few friends that got greedy past age 50, then cashed out and curled up in the fetal position.
What were we talking about again.
Oh yeah, 90% max in stocks no matter your age unless the market has recently been destroyed. That's not exactly conservative advice but it served me well when accumulating. Recency bias makes me sound foolish now. I can live with that.