|
Stinky_Pete posted:I came here to receive this answer in a more convincing way so, what do I stand to lose by shifting my 401(k) from thirds in domestic index, foreign index, and bonds, to 100% bonds for a few years? I assume it depends on how much time is left in the plan for the difference to compound over, but I'm not convinced that the average growth of the past century should be assumed for the coming century anyway, also I feel like I'm being forced by Vanguard to depend on things like private prisons that I'm personally trying to destroy One of the worst things that could happen is that you time it perfectly and get out of stocks just before they go down, and then time the bottom perfectly and get your money back into stocks right when they hit the bottom. This would be terrible because it would reinforce your extremely bad idea that you are special and can time the market, when in reality you would merely be experiencing luck. Having been convinced that you can tell when the market is about to fall and when it's about to turn around, you would try to do this again in the future, and the odds are really really good that actually you'd wind up loving yourself over later in life, when you have a lot more money at stake than you do now. The reason people say "do not time the market" is because even the highly paid professional market-timers, with massively more data and resources available to them than you have, are worse than a random monkey at timing the market.
|
#
?
Aug 16, 2019 03:07
|
|
|
|
| # ? Jun 4, 2024 21:41 |
|
|
Stinky_Pete posted:I came here to receive this answer in a more convincing way so, what do I stand to lose by shifting my 401(k) from thirds in domestic index, foreign index, and bonds, to 100% bonds for a few years? I assume it depends on how much time is left in the plan for the difference to compound over, but I'm not convinced that the average growth of the past century should be assumed for the coming century anyway, also I feel like I'm being forced by Vanguard to depend on things like private prisons that I'm personally trying to destroy Read this again because even if you are perfect at timing the market, you're still barely better than just putting it all in on Jan 1st.
|
|
#
?
Aug 16, 2019 03:26
|
|
|
Sobriquet posted:How long were you there? Matching contributions typically vest over a period of 2-5 years. I just timed quitting a job that had 50% vesting cliffs at years 1 and 2 and came out with double what I would have if I hadn’t calculated my dates very carefully. A hair over 5 years, like 3 weeks after I hit 80% vesting... wasn't waiting specifically for that, but the timing worked out well. It actually kept me from walking out without something lined up a couple times... But that said, none of my other un-vested money disappeared. My account is still showing the full match dollar amount (aside from what they took out) and then showing my 80% vested number next to it. And now that I'm looking at the numbers, there's something weird going on... I'm going to have to look deeper tonight when I have more time. I'm trying to give them the benefit of the doubt, but the numbers just aren't adding up. Requested the plan details last night, still waiting for the e-mail... Trabant posted:I'll never again accept a job with that kind of vesting schedule. I waited more than a year to leave a dead-end job because of that, while the job I left it for had the match vest immediately. I have never had a job where the vesting schedule WASN'T 6 years. Stinky_Pete posted:I came here to receive this answer in a more convincing way so, what do I stand to lose by shifting my 401(k) from thirds in domestic index, foreign index, and bonds, to 100% bonds for a few years? You stand to lose gains. Sure your money will be safer, but you might be selling at a low point. You don't know which direction the market is headed, or when it's going that way. Will it go down? Probably. When? Who knows! It might skyrocket for a year until it all comes crashing down, and you'd miss all that by pulling out. Read the links posted. Countless people have run analyses on this very subject and have all come to the conclusion that statistically speaking, and based on historical data, your best strategy is to invest your money the instant you are able to. In fact many people have built calculators using historical data. Take this one for example: https://dqydj.com/sp-500-historical-return-calculator/ It allows you to enter a number of years/months and it'll give you the statistics for the each time period of that length in the history of the SP500. So if you tell it 30 years, it'll give you the worst 30-year period, the best 30-year period, and in general a full statistical breakdown of every 30-year period in history. Bottom line is that this is a well studied subject, and the data shows that trying to time the market ONLY works if you're good at it. But the thing is you're NOT good at it, and even highly paid professionals doing this full time get it wrong sometimes. If anyone could get it right all the time, this wouldn't be a conversation. The sky has been falling for the last 3 years. "Lead economic indicators" have been pointing to recession for quite a while now, yet here we are. Even if the indicators are right, you don't know EXACTLY when it's going to hit, how bad it's going to be, or how long it's going to last. You don't know what the market is going to do. Nobody knows. Anyone who tells you otherwise is trying to sell you something. Stinky_Pete posted:but I'm not convinced that the average growth of the past century should be assumed for the coming century anyway, Why not? 100 years is a really long drat time and historical data encompasses booms, busts, wars, global recessions, etc. If you think this doesn't average out market behavior over a long period, I don't know what else to tell you.
|
|
#
?
Aug 16, 2019 13:24
|
|
|
DaveSauce posted:Why not? 100 years is a really long drat time and historical data encompasses booms, busts, wars, global recessions, etc. If you think this doesn't average out market behavior over a long period, I don't know what else to tell you. planet's dyin', Cloud
|
|
#
?
Aug 16, 2019 14:25
|
|
|
Knowing what the market is going to do is super easy... if you're the president... and you tweet a lot...
|
|
#
?
Aug 16, 2019 16:34
|
|
|
I can assure you with a high level of confidence that our wannabe mobster president has no clue how any markets work.quote:Trump Panicked As Stocks Fell, Called Top 3 Bank CEOs 
|
|
#
?
Aug 16, 2019 17:31
|
|
|
DeadFatDuckFat posted:Knowing what the market is going to do is super easy... if you're the president... and you tweet a lot... I thought the only investor class that consistently outperformed the stock market was Congress 
|
|
#
?
Aug 16, 2019 18:15
|
|
|
DaveSauce posted:A hair over 5 years, like 3 weeks after I hit 80% vesting... wasn't waiting specifically for that, but the timing worked out well. It actually kept me from walking out without something lined up a couple times... Huh, hope you can get it figured out then. Would be nice to be able to stick it to them. Now that I think of it the non-vested cash should not be pulled out that way anyway (as where you see the vested amount). Also I think some companies let you come back and resume vesting after time away. Good luck!
|
|
#
?
Aug 16, 2019 18:18
|
|
|
totalnewbie posted:Read this again because even if you are perfect at timing the market, you're still barely better than just putting it all in on Jan 1st. It's a fascinating article... That said, it's still loving depressing to me to see that there is a 20 year period between 1955-1974 that the scenario where you didn't invest came out ahead.
|
|
#
?
Aug 16, 2019 18:19
|
|
|
Astro7x posted:It's a fascinating article... That said, it's still loving depressing to me to see that there is a 20 year period between 1955-1974 that the scenario where you didn't invest came out ahead. I'd like to see it more as a firecalc set of 20 year periods rather than just bookending kind of arbitrarily
|
|
#
?
Aug 16, 2019 20:22
|
|
|
Pryor on Fire posted:I can assure you with a high level of confidence that our wannabe mobster president has no clue how any markets work. I NEED this recession, dammit.
|
|
#
?
Aug 16, 2019 22:34
|
|
|
Sobriquet posted:Huh, hope you can get it figured out then. Would be nice to be able to stick it to them. Now that I think of it the non-vested cash should not be pulled out that way anyway (as where you see the vested amount). Also I think some companies let you come back and resume vesting after time away. Good luck! So Vanguard doesn't have the "Plan Document." They only have the dumbed-down "summary" which gives me no real answers because the match is determined by a specific formula only shown in the plan document. Guess I have to confront my old job blind and hope they don't lie to me. Honestly it's probably legit, but they dicked me over several times in a variety of ways so I'm going to make them work for this one. It's not a lot of money and probably not worth my time, but gently caress 'em.
|
|
#
?
Aug 16, 2019 23:01
|
|
|
Pryor on Fire posted:I can assure you with a high level of confidence that our wannabe mobster president has no clue how any markets work. Just invert the yield curve again. Bing bing boom. So simple. Here, I inverted it for you, all you have to do is distribute it to the banks. 
|
|
#
?
Aug 17, 2019 04:22
|
|
|
I feel this yield curve inversion thing really took off in the past 5 years, and I wonder if when people start realizing something is being measured it stops being a good measure.
|
|
#
?
Aug 17, 2019 04:55
|
|
|
Residency Evil posted:I feel this yield curve inversion thing really took off in the past 5 years, and I wonder if when people start realizing something is being measured it stops being a good measure. Kinda Goodhart's law?
|
|
#
?
Aug 17, 2019 06:10
|
|
|
See also: all the people who chase small-cap value.
|
|
#
?
Aug 17, 2019 13:07
|
|
|
Astro7x posted:It's a fascinating article... That said, it's still loving depressing to me to see that there is a 20 year period between 1955-1974 that the scenario where you didn't invest came out ahead. That's important only if you need all your money in 1974. Also, unique circumstance of oil shock and the market "recovered" within a year.
|
|
#
?
Aug 17, 2019 15:33
|
|
|
Residency Evil posted:I feel this yield curve inversion thing really took off in the past 5 years, and I wonder if when people start realizing something is being measured it stops being a good measure. This phenomenon has been well-documented for decades and the government bond market isn't driven by a bunch of retail momentum chasers. If your hope is that This Time Is Different, it is, but probably not for the reason you think.
|
|
#
?
Aug 18, 2019 16:49
|
|
|
So I have some non-trivial amount in cash that I was hoping to move into my portfolio, but with this current volatility, part of me is tempted to wait for some kind of a stock market crash so that I can make the most out of the opportunity. Is it fair to say that such crash might not even happen, and timing this is mostly a fool's errand?
|
|
#
?
Aug 19, 2019 03:05
|
|
|
DreadCthulhu posted:So I have some non-trivial amount in cash that I was hoping to move into my portfolio, but with this current volatility, part of me is tempted to wait for some kind of a stock market crash so that I can make the most out of the opportunity. Is it fair to say that such crash might not even happen, and timing this is mostly a fool's errand? Read the last page or two of this thread for your answer. But: when do you need/want this money, and are you willing to delay that expense if the market is down when you intended to use it?
|
|
#
?
Aug 19, 2019 03:15
|
|
|
DreadCthulhu posted:So I have some non-trivial amount in cash that I was hoping to move into my portfolio, but with this current volatility, part of me is tempted to wait for some kind of a stock market crash so that I can make the most out of the opportunity. Is it fair to say that such crash might not even happen, and timing this is mostly a fool's errand? Yes, see thread title, don't time the market.
|
|
#
?
Aug 19, 2019 03:15
|
|
|
Why do you have a non-trivial amount of cash? Inheritance or were you already timing the market?
|
|
#
?
Aug 19, 2019 03:48
|
|
|
I have some as well because I sold two lots of employee stock in the last 3 weeks, and rather than immediately invest it back into index funds, I'm trying to figure out whether I want to do some remodeling and add a covered patio to my backyard. It would be nice for my pup of nothing else. Other option was to use it up remade my broken hot tub, but between haul away, purchase, shipping, and installation, the hot tub didn't seem nearly as worth it compared to the patio or reinvesting. But now I have to look into contractors or DIY options, and I'm lazy. 
|
|
#
?
Aug 19, 2019 05:29
|
|
|
What proportion of your portfolio would you consider investing in exotics like art? Asking because I have ties to the art world and know a few curators, and would love to support some young artists while growing a collection. Not being super rich this will be in the "student art" category, but I'd be interested if anyone else has experience with art buying at the low end of the market. My gut feeling would be that no more than 5% of a portfolio should be in exotics, but I'm no expert.
|
|
#
?
Aug 19, 2019 11:45
|
|
|
Purple Prince posted:What proportion of your portfolio would you consider investing in exotics like art? 0% If you appreciate art, buy it for the feeling it gives you when you look at it on your wall. But it should come out of your entertainment fund after all your retirement accounts are maxed out. It should not be part of your investment portfolio.
|
|
#
?
Aug 19, 2019 12:29
|
|
|
Purple Prince posted:What proportion of your portfolio would you consider investing in exotics like art? A good guideline is that you should invest as much in art as you do in lottery tickets; i.e. art is an entertainment purchase and not a reliable investment. Buy it if you like it and by all means support new artists, but realize that 99%+ of all art never has a higher market value than the day it leaves the gallery for the first time, and it will almost definitely wind up at a garage sale, not an auction house, when you die. Even less of it will outperform inflation; only the extreme outliers will ever outperform an index fund. If you pick a few winners, hey, bonus, but don't plan on it. As you suggested, these guidelines go out the window if your conventional portfolio already has seven or eight zeroes in it, but then you can afford to play in the deep end, and the "student art" and "budding artist" work is still in your "lottery tickets" asset class.
|
|
#
?
Aug 19, 2019 12:45
|
|
|
Investing means buying an asset that should generate a return. Buying something with the hopes it goes up in value is gambling.
|
|
#
?
Aug 19, 2019 17:07
|
|
|
Dustoph posted:Investing means buying an asset that should generate a return. Buying something with the hopes it goes up in value is gambling. This is nonsense. Buying non-dividend stocks like AMZN doesn't generate a return. People invest in poo poo because they believe it'll be worth more tomorrow than today. That's it. Gold doesn't generate return. Buying land and not renting it out doesn't generate a return. Buying developed world bonds with negative interest doesn't generate a return. Buying collectible stamps or rare wine doesn't generate a return. Most of the "returns" have been through the value of the asset going up not through interest or profit distribution. Collectibles are a perfectly fine asset class. It's just extremely illiquid, prone to forgeries and have overhead to store. So if you're not rich you probably don't want to deal with the headache. 
|
|
#
?
Aug 19, 2019 17:25
|
|
|
Where were you when a goon said Art and Amazon are the same type of investment Amazon is not a Greater Fool asset. It has value based on its growth prospects, business operations, cash flow, real estate, physical inventory, etc The art is paint and canvas and whatever another fool would pay for it
|
|
#
?
Aug 19, 2019 17:29
|
|
|
My god if you're at the loving point in your life when you're considering diversifying into "art" please please please just donate some money to your local animal shelter or something instead. For gently caress's loving sake.
|
|
#
?
Aug 19, 2019 17:47
|
|
|
GoGoGadgetChris posted:Where were you when a goon said Art and Amazon are the same type of investment Like bitcoin.
|
|
#
?
Aug 19, 2019 17:47
|
|
|
All stocks that don't have dividends are greater fool assets. This is not even a point of contention. If I have a piece of paper giving me 20% ownership of my local pizzeria and it doubles its profits next year, my piece of paper is still worth nothing unless I can get someone to buy it for a good price. The qualifying question in whether something is a greater fool asset is if I still make money if all the markets are permanently closed and I can't get anyone else to buy it from me. Dividends and interest bearing instruments are the only ones which will make money without needing someone else to buy it.
|
|
#
?
Aug 19, 2019 17:50
|
|
|
Anarkii posted:All stocks that don't have dividends are greater fool assets. This is not even a point of contention. If I have a piece of paper giving me 20% ownership of my local pizzeria and it doubles its profits next year, my piece of paper is still worth nothing unless I can get someone to buy it for a good price. You heard it here, folks. 20% of a pizza joint is the same thing as a non-dividend large cap equity being traded on the NYSE.
|
|
#
?
Aug 19, 2019 17:54
|
|
|
Anarkii posted:All stocks that don't have dividends are greater fool assets. This is not even a point of contention. If I have a piece of paper giving me 20% ownership of my local pizzeria and it doubles its profits next year, my piece of paper is still worth nothing unless I can get someone to buy it for a good price. This is all incorrect. Please read some or all of the books from the OP!
|
|
#
?
Aug 19, 2019 17:55
|
|
|
if you're in here, posting about whether you should or shouldn't diversify in to art, you should not be diversifying in to art i know some people who are really plugged in and have done extremely well in the art market but that's because they knew their poo poo and had a good eye and liked the pieces they bought intrinsically not because they sat around scratching their beards saying "how can i diversify out of global equities"
|
|
#
?
Aug 19, 2019 17:57
|
|
|
Common Stock, i.e. partial ownership of a company which has revenue and strives to increase its profits - literally the same as wine and stamps from an investment perspective.
|
|
#
?
Aug 19, 2019 17:59
|
|
|
Hoodwinker posted:Common Stock, i.e. partial ownership of a company which has revenue and strives to increase its profits - literally the same as wine and stamps from an investment perspective. Good job with the false equivalence. I'm neither advocating for collectibles nor saying they're the same. I dispute the notion that only assets with "returns" without needing the value of the asset to go up are valid investments.
|
|
#
?
Aug 19, 2019 18:06
|
|
|
Anarkii posted:Good job with the false equivalence. I'm neither advocating for collectibles nor saying they're the same. I dispute the notion that only assets with "returns" without needing the value of the asset to go up are valid investments. 
|
|
#
?
Aug 19, 2019 18:09
|
|
|
This is a learning opportunity, not a time for a debate. He has a common misunderstanding of where stock value is derived from. Don't dog pile him with sass or he'll do the goon thing of tripling down on the bad opinion and making it the core of his identity.
|
|
#
?
Aug 19, 2019 18:13
|
|
|
|
| # ? Jun 4, 2024 21:41 |
|
|
GoGoGadgetChris posted:This is a learning opportunity, not a time for a debate. He has a common misunderstanding of where stock value is derived from. 
|
|
#
?
Aug 19, 2019 18:14
|
|