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07-08-2024, 02:15 AM
#391
Probabilities/Possibilities
"The Nasdaq Just Entered Correction Territory. History Says This Will Happen Next"
https://finance.yahoo.com/news/nasda...091200861.html
The odds?
"the Nasdaq has declined at least 10% from a bull market high 11 times in the last 15 years. Three of those events developed into bear markets, while the other eight never progressed beyond the correction stage."
"after reaching the market correction threshold, the Nasdaq has typically rebounded quickly. Indeed, during the last 15 years, the Nasdaq has returned an average of 21.9% and a median of 24.8% during the 12-month period following its first close in correction territory."
"The best chance to deploy capital is when things are going down."
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07-08-2024, 09:40 AM
#392
The Blue Squigly Line
"This indicator predicted every US recession for 35 years and it’s flashing a major warning for stocks!"
https://www.livewiremarkets.com/wire...TIAL%20READING
"When the blue squiggly line spikes towards historical highs, it has every time in the last 35 years foreshadowed a bear market in US stocks."
"When the blue squiggly line spikes from historical lows, it generally corresponds with major lows in the S&P 500, and or very strong periods of stock market performance."
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07-08-2024, 08:04 PM
#393
"Risk is your friend - you should manage it, not avoid it:
Part 1/2
Why many investors confuse fear and risk, and what to do about it."
https://www.livewiremarkets.com/wire...rm=READ%20MORE
"The definition of risk within the context of investing is that you get results that are different from results that you would reasonably expect. It is often measured by your standard bell curve matched to a mathematical concept called standard deviation. The more standard deviations you are away from the expected result, somewhere around the high point of the bell curve, the higher the “risk”.
" if interest rates shoot up and the value of your bond falls from $100 to $85, you made $4 of income that year but you lost 15% in value"
"whilst the bond might not be risky, the risk in this specific event was high"
"But that’s one kind of risk, there are many others and frankly, they’re often ignored. Risk such as:
Liquidity risk
Inflation risk
Market risk
Credit risk
Currency risk
Counterparty risk
Regulatory risk
Management risk
That list aside, losing money is the doozy of all "risks" so let’s look at that quickly.
"If someone decides to not invest in the stock market because it’s too “risky”, they may choose a term deposit instead. Let’s say the term deposit pays 5% per year."
"One of the world’s largest ETFs that tracks the MSCI World stock market index is up 20.26% in the last 12 months (through 30 Jun 2024). It’s all AI froth, I hear. Maybe, but it's also up 11.98% per year over the last 5 years, and 9.38% over the last 10 years. Both time periods are pre-AI. Choosing the "less risky” option has suddenly become quite risky in that you’ve massively compromised your investment goals. If you’re 35, 45 or even 55, you almost certainly can’t meet your retirement goals with a 5% return. Never mind that you’ve ignored one of the all-time omni-present risks, especially now – inflation risk.
"The asset class with the best track record of beating inflation, hands-down and over a long time, is global stocks. "
" an investor chooses what feels like the lower risk option only to have it turn out to be quite high risk. Just not the original risk they were thinking of.
And that’s what I mean, that’s where investors often confuse fear and risk. This is important because when it comes to investing, there are no risk-free options."
"People talk about the “risk-free rate”, and that’s often proxied by the 10-year US Treasury bond rate. But let’s be clear – that bond is not “risk-free”. It fell over 3% in 2021 and it fell another 15% in 2022. Back-to-back loss years for high quality bonds are rare, so it turns out that the 10-year US Treasury bond has been very risky of late"
"That’s the world’s supposedly safest asset, down 3 of the last 4 years, and down almost 2% per year over the last 5 years."
I’ll post Part 2 later this week and cover this idea of “low risk” options. Hint.....real estate is not low risk."
Good luck out there."
Last edited by kiora; 08-08-2024 at 02:59 AM.
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12-08-2024, 07:30 AM
#394
"Buy And Hold Investing. Is It A One Size Fits All Solution?"
https://realinvestmentadvice.com/buy...-all-solution/
"Timing Is Everything
The MAJORITY of the returns from investing came in just 5 of the 9-major market cycles since 1871. Every other period yielded a return that lost out to inflation during that time frame."
"“Among the key findings: On average, participants who kept contributing to their retirement plans throughout the 18-month period (October 2008–March 2010) had higher account balances than those who stopped contributing; Participants who maintained a portion of their retirement plan asset in equities throughout the entire period ended up with higher account balances than those who reduced their equity exposure amid the peak period of market distress"
"Depending on
Time horizon (retirement age less starting age.)
Valuations at the beginning of the investment period.
Rate of return required to achieve investment goals."
Counterintuitive?
"Therefore, during periods of excessively high valuations, investors should consider opting for more “active” strategies with the goal of capital preservation"
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12-08-2024, 09:07 AM
#395
"Risk is your friend - you should manage it, not avoid it
: Part 2/2
Why many investors confuse fear and risk, and what to do about it"
https://www.livewiremarkets.com/wire...m=LEARN%20MORE
"big super funds are, in my view, very guilty of under-risking their communications with their clients."
"anyone who is 40-and-under should essentially never have their assets invested in a balanced asset allocation in a super fund. Anyone who is between 40 and 50 should almost never be balanced."
"Look at that table above - over the last 5 years (through 30 June 2024), Big Super Fund 1 took over 16 years to double your money in their Balanced fund. The MSCI World took 6 years. The Nasdaq 100 took a little over 3 years."
"Buying investment real estate (especially in the residential space) ignores the risk of illiquidity, it ignores management risk (unless you’re going to manage it yourself but even then, you’re relying on others), and it ignores the risk of opportunity cost given the yield is low, the costs are high, and the return is often below average."
" investing in residential real estate is not a good growth option"
"Getting this right can result in a potentially life-changing uplift in your retirement savings"
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23-08-2024, 05:44 AM
#396
"Charlie Munger Warned: '95% Of People Have No Chance Of Beating' S&P 500 Index – But Adds 'Why Shouldn't Life Be Hard?'"
https://finance.yahoo.com/news/charl...151518884.html
"Munger's success with Berkshire Hathaway was not about maintaining a large portfolio to beat the market but rather making key decisions. "Take out a hundred decisions, which is like two a year," he explained. Berkshire's impressive track record came from making a few crucial choices over time, rather than attempting to outpace the market through sheer volume."
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24-08-2024, 04:19 PM
#397
Originally Posted by kiora
" Buy And Hold Investing. Is It A One Size Fits All Solution?"
https://realinvestmentadvice.com/buy...-all-solution/
" Timing Is Everything
The MAJORITY of the returns from investing came in just 5 of the 9-major market cycles since 1871. Every other period yielded a return that lost out to inflation during that time frame."
"“Among the key findings: On average, participants who kept contributing to their retirement plans throughout the 18-month period (October 2008–March 2010) had higher account balances than those who stopped contributing; Participants who maintained a portion of their retirement plan asset in equities throughout the entire period ended up with higher account balances than those who reduced their equity exposure amid the peak period of market distress"
" Depending on
Time horizon (retirement age less starting age.)
Valuations at the beginning of the investment period.
Rate of return required to achieve investment goals."
Counterintuitive?
" Therefore, during periods of excessively high valuations, investors should consider opting for more “active” strategies with the goal of capital preservation"
Thanks. Very good adivse.
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24-08-2024, 05:25 PM
#398
KISS....I believe is the way to go.
After nigh on 50 years of investing ....
Making the stuff is easy...keeping it is much harder...
Dont lose it. And if you making about 7 % compounding...your probably doing better than most.
BTW Im perfect ..hahahahahahaha
Last edited by troyvdh; 24-08-2024 at 05:28 PM.
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24-08-2024, 06:10 PM
#399
Originally Posted by troyvdh
KISS....I believe is the way to go.
After nigh on 50 years of investing ....
Making the stuff is easy...keeping it is much harder...
Dont lose it. And if you making about 7 % compounding...your probably doing better than most.
BTW Im perfect ..hahahahahahaha
With my fast experience, I made sure not to lose money again. Right now, the wisest thing to do is preserving capital. Currently, momentum traders and speculators are running the show with overvalued popular stocks and other assets. Intelligent investors find overlooked opportunities elsewhere. Is it different this time? I don’t think so.
Last edited by Valuegrowth; 25-08-2024 at 04:20 PM.
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29-08-2024, 09:40 AM
#400
Originally Posted by Valuegrowth
With my fast experience, I made sure not to lose money again. Right now, the wisest thing to do is preserving capital. Currently, momentum traders and speculators are running the show with overvalued popular stocks and other assets. Intelligent investors find overlooked opportunities elsewhere. Is it different this time? I don’t think so.
Sounds good but easier said than done. I think one is crazy not to have a significant exposure to AI at the moment, probably for a few years to come, but in a diversified portfolio. My best performers in the last 12 months have been VST (178%), COKE (93%) and NVDA (163%), not exactly in the same business
Last edited by iceman; 29-08-2024 at 09:46 AM.
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