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election volatility?
#11
When a BIG drop comes along, just about everything become correlated and diversification becomes but an investing theory.

What's needed is a better timing component to avoid the massive drawdowns. Outside of DGI my other 2 portfolios barely got nicked in the 2015, 2018 and 2020 swoons.
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#12
(02-14-2021, 07:37 PM)NilesMike Wrote: When a BIG drop comes along, just about everything become correlated and diversification becomes but an investing theory.

What's needed is a better timing component to avoid the massive drawdowns. Outside of DGI my other 2 portfolios barely got nicked in the 2015, 2018 and 2020 swoons.

That comment would have made a great thread of it's own.  I couldn't agree more, especially as it pertains to equities.  Owning a couple stocks from all 11 sectors spares you VERY little pain when the entire market drops 30% or much worse.  Add in some high yielding CEFs and those will get whacked too.  Will precious metals help?  Maybe, maybe not.  Some cash and a VERY short-term bond fund might give you a chance to buy the equity bottom.  It sure won't keep a diversified port from getting slammed.  Add some leverage in any form and oh boy!

Diversification among stocks saves you from getting killed because you over invested in a bad sector or a few stocks that get crushed in an otherwise OK market.  Hedging with options can help if you don't repeatedly get the timing wrong, which most of us will if we make it a regular practice.  

I'll continue to run about three different strats and we'll see you all on the other side.  I suspect some quarter or year soon you better be ready to react quickly if you are heavy into normal long positions and might need the money in the next five years.
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#13
I like your idea of running different strategies at the same time. Last year I invested in leveraged etfs, this year I want to build both my dividend growth stocks (BroadCom, JNJ, and I'll ask about others) as well as straight dividend stocks (T, MO, NLY, etc.). I can't wait for bonus time in March!
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#14
(02-15-2021, 10:19 AM)ken-do-nim Wrote: I like your idea of running different strategies at the same time.  Last year I invested in leveraged ETFs, this year I want to build both my dividend growth stocks (BroadCom, JNJ, and I'll ask about others) as well as straight dividend stocks (T, MO, NLY, etc.).  I can't wait for bonus time in March!
I wish I had done it when I was 35 instead of 55.  A couple guys on this forum have been very helpful in refining my strategies.  The problem is recency bias is hard to avoid.  You do something for a year and judge it with VERY limited facts.  The market capitalizes on the two strongest investing emotions, greed and fear.  Right now I am sure there are many that are very frustrated with their dividend portfolios.  (Mine has been OK but less than amazing).  Others now have all their holdings in a few leveraged investments or extremely high PE stocks in a margin account that is maxed out on credit.  They are making 200%+ a year so why wouldn't you go all in on that idea and retire in a couple years?  It's really hard, but you have to run your strategy through some REAL up and down cycles to truly test it.  

Enjoy that bonus.  With any luck we'll get a dip and you won't be tempted to overpay for anything.   I know you like those high div stocks while I have fallen out of love with them.  Get them at the right price and it could work out longterm.
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#15
(02-15-2021, 11:22 AM)fenders53 Wrote:
(02-15-2021, 10:19 AM)ken-do-nim Wrote: I like your idea of running different strategies at the same time.  Last year I invested in leveraged ETFs, this year I want to build both my dividend growth stocks (BroadCom, JNJ, and I'll ask about others) as well as straight dividend stocks (T, MO, NLY, etc.).  I can't wait for bonus time in March!
I wish I had done it when I was 35 instead of 55.  A couple guys on this forum have been very helpful in refining my strategies.  The problem is recency bias is hard to avoid.  You do something for a year and judge it with VERY limited facts.  The market capitalizes on the two strongest investing emotions, greed and fear.  Right now I am sure there are many that are very frustrated with their dividend portfolios.  (Mine has been OK but less than amazing).  Others now have all their holdings in a few leveraged investments or extremely high PE stocks in a margin account that is maxed out on credit.  They are making 200%+ a year so why wouldn't you go all in on that idea and retire in a couple years?  It's really hard, but you have to run your strategy through some REAL up and down cycles to truly test it.  
Portfolio Visualizer is a great tool.
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#16
(02-15-2021, 11:26 AM)NilesMike Wrote:
(02-15-2021, 11:22 AM)fenders53 Wrote:
(02-15-2021, 10:19 AM)ken-do-nim Wrote: I like your idea of running different strategies at the same time.  Last year I invested in leveraged ETFs, this year I want to build both my dividend growth stocks (BroadCom, JNJ, and I'll ask about others) as well as straight dividend stocks (T, MO, NLY, etc.).  I can't wait for bonus time in March!
I wish I had done it when I was 35 instead of 55.  A couple guys on this forum have been very helpful in refining my strategies.  The problem is recency bias is hard to avoid.  You do something for a year and judge it with VERY limited facts.  The market capitalizes on the two strongest investing emotions, greed and fear.  Right now I am sure there are many that are very frustrated with their dividend portfolios.  (Mine has been OK but less than amazing).  Others now have all their holdings in a few leveraged investments or extremely high PE stocks in a margin account that is maxed out on credit.  They are making 200%+ a year so why wouldn't you go all in on that idea and retire in a couple years?  It's really hard, but you have to run your strategy through some REAL up and down cycles to truly test it.  
Portfolio Visualizer is a great tool.
It certainly is.  It's looking backwards but that is all the certainty we have.  The reality is folks tend to just look at their portfolio balance or blindly follow the latest hot ETF manager, or an old market guru that was successful in a different time with a different set of macros.
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