Off Topic Poker Forums

I used to have 100% in G because fuck the police....or something like that. I just didn't trust the stock market AT ALL.

the stock market is a gamble, that's completely true. but with a sufficiently diversified portfolio, that risk is much less than people think over the long run. for example, people today talk about how the market has "failed" over the past 5 years as the S&P 500 (SPY) has returned -3%. but if you actually look at the numbers, if you had dollar-cost averaged $1,000 a month into SPY from Aug 2007 (height of the boom) to Aug 2012 today, reinvesting dividends, you would have put in $61k of your own money over that period and have a portfolio worth $79k today. quite far from a failure imo.

that's why you shouldn't sweat CNBC every day and endlessly worry about how Apple put out a bad quarterly report or how Cramer is bearish on stock XYZ and now he's bullish on stock ABC, blah blah blah. it's just noise; people creating stories out of randomness. "entertainment" as Nassim Taleb puts it.

that's why imho, investing > speculation (for the layman at least)

and a corollary to the last post: "the market sucks at prediction; don't listen to the market"
(my paraphrase of Shiller, Econ 252, Lecture 7: Behavioral Finance)

Thanks naw he'd. (lol I'm leaving that autocorrect)

I'm likely going to diversify and just hope it works out.

Ok, I finally got access to my retirement savings and put 20% in F and 80% in C.

Ok, I finally got access to my retirement savings and put 20% in F and 80% in C.

Ez peezy investing, right? oh, just be sure to re-allocate to 80% in F and 20% in C when you have 5-10 years til retirement, regardless of what's happening in the market (like a boom). if you think you'll forget (old people, lol) or be tempted to be mostly in stocks for whatever reason, you might want to go with the Lifecycle fund.

to expand on the 5-10 years til retirement strategy for re-allocation, i would look at the market 10 years out and decide if it's a good time to re-allocate or not. if the market was in a boom (bull cycle), i'd re-allocate. if it was bust (bear cycle), i'd ride it out.

the rationale is that market cycles generally last 4 years. so if there's a crash, you give the market enough time to recover, tho it may take less or more than 4 years. so waiting to re-allocate only 1-2 years out might not always work out, and i think that's how people end up delaying retirement or losing a bunch of money getting out of stocks in a bear cycle.

and a quick Google search will tell you that it only took 4 years to recover from the 1929 crash (measured from the bottom in 1932 to recovery). so that's why i like the 10 year out mark.

He didn't know how to log into his account until now. I'd suggest not bothering with strategies that involve remembering to do things 20 years from now.

He didn't know how to log into his account until now. I'd suggest not bothering with strategies that involve remembering to do things 20 years from now.

Tecmo could take a cue from Back to the Future and write a letter to his future self. only hitch is he must never move so he knows exactly where to mail it to. BTTF is a cinematic classic. it's gonna work!

Tecmo could take a cue from Back to the Future and write a letter to his future self. only hitch is he must never move so he knows exactly where to mail it to. BTTF is a cinematic classic. it's gonna work!

Send the letter to the nearest bakery. They'll know how to find him in the future.

just wanted to cap this thread with the Ibbotson SBBI historical chart:

https://www.arielinvestments.com/images/stories/Charts/Education_Charts/ibottson-2012.pdf


contrary to what i said before, small cap stocks have definitely outperformed large cap stocks in the long run, just not the past 10 years. GL on your investments, guys.

It seems to me the idea of out performing the market is... difficult. Outperforming is a zero sum game (someone has to underperform) so you're essentially taking advantage of other people's mistakes (eg. someone undervaluing a share and selling low). In this way it's like poker...

"winning" on a stock doesn't mean somebody else lost. just because someone sells a stock doesn't mean he loses when the stock goes up later since we're not taking into account what the seller bought it for initially. and more broadly, the idea that wealth creation is a zero-sum game is a fallacy. options trading is a zero-sum game, however.