Starting out long term portfolio ETF's

Nowler

Experienced member
... and following a few youtube channels without crazy thumbnails and stupid emotional impulse hypes :D
Smart to avoid those.
You have entered the market in a very manic time - you can identify this not only by markets seemingly "always going up", but also by the amount of retail traders/investors acting like they are professionals. I saw 2 average Joe's on a TicToc video saying that their followers can live just like them. The "secret" is to buy when it's going up, and sell when it stops going up. Lol

The bust will sort all of those people out... just make sure it doesn't sort you out too :)

Beginning your investing journey at this stage of the cycle will shape the type of investor you become, and it will be dramatically different to someone that enters at the opposite end of the cycle. It's somewhat similar to someone beginning with some wins or beginning with some losses - it likely shapes your level of risk aversion and return expectation. At least to some degree...

Fascinating!
 

StockNewbie12

Junior member
Yeah that's why i'm in this for the long run. I have no doubt there will be a market crisis in these 25 years so i'm buying every month to average my buying price :) I don't think i can do any better then dollar cost averaging
 

Nowler

Experienced member
Yeah that's why i'm in this for the long run. I have no doubt there will be a market crisis in these 25 years so i'm buying every month to average my buying price :) I don't think i can do any better then dollar cost averaging
It will also help your portfolio growth if you know when to have more cash on hand to buy when things are cheap and unloved - e.g big corrections or crashes.

Personally I am now 100% invested as I spent the last of my cash on the recent corrections in the sectors I am interested - but now it means I have no more cash to benefit if prices fall further.

FOMO is a difficult beast to tame
 

StockNewbie12

Junior member
It will also help your portfolio growth if you know when to have more cash on hand to buy when things are cheap and unloved - e.g big corrections or crashes.

Personally I am now 100% invested as I spent the last of my cash on the recent corrections in the sectors I am interested - but now it means I have no more cash to benefit if prices fall further.

FOMO is a difficult beast to tame
I do have some cash extra that i will invest when i'm getting more confident in to the stock market. Also i'm really hoping that my salary will go up in the coming 25 years xD
 

1nvest

Well-known member
I don't think i can do any better then dollar cost averaging
Let me show you how...
Firstly, if you hold on to an asset class "for the long term" you have to be able to sit through your investment dropping and dropping. had you held on SPY you would have been looking at >50%. I dont know many people who can honestly do that. if you can watch your money drop by those amounts, hats off to you.
however, if i show you this way, do you think you could do this?

The red line is buy and hold
The blue line is where total world equity is greater than the 10month SMA. Really really simple. couldn't get any easier. Close is greater than 10sma, buy. close less than 10sma hold the balance in cash
you're drawdown is now just 17% vs 51%. Have you beaten buy and hold? No, but you're not in the market 100% of the time as you are with the red line
View attachment 299628
Now, instead of holding in cash, and you move your money to something going up. in the next case, we move our money to Bonds. total world bond index instead of cash. Now you are beating buy and hold with a fraction of the drawdown.
View attachment 299629

Still think you cant do better than dollar cast averaging?? come on, how difficult is that. every month compare your equity to a simple moving average.
now if you invest $100 extra per month...
View attachment 299630
and this just for starters. you can p1ss all over dollar cost averaging believeme
blue line is the most simple timing indicator there is. still beats warren buffet
 

StockNewbie12

Junior member
Let me show you how...
Firstly, if you hold on to an asset class "for the long term" you have to be able to sit through your investment dropping and dropping. had you held on SPY you would have been looking at >50%. I dont know many people who can honestly do that. if you can watch your money drop by those amounts, hats off to you.
however, if i show you this way, do you think you could do this?

The red line is buy and hold
The blue line is where total world equity is greater than the 10month SMA. Really really simple. couldn't get any easier. Close is greater than 10sma, buy. close less than 10sma hold the balance in cash
you're drawdown is now just 17% vs 51%. Have you beaten buy and hold? No, but you're not in the market 100% of the time as you are with the red line
View attachment 299628
Now, instead of holding in cash, and you move your money to something going up. in the next case, we move our money to Bonds. total world bond index instead of cash. Now you are beating buy and hold with a fraction of the drawdown.
View attachment 299629

Still think you cant do better than dollar cast averaging?? come on, how difficult is that. every month compare your equity to a simple moving average.
now if you invest $100 extra per month...
View attachment 299630
and this just for starters. you can p1ss all over dollar cost averaging believeme
blue line is the most simple timing indicator there is. still beats warren buffet
Uggh, the attachements won't load :( can you message me your screenshots personally or something on this forum?
 

1nvest

Well-known member
Uggh, the attachements won't load :( can you message me your screenshots personally or something on this forum?
Here you go, first image is comparing an Equity (such as total world index) to an SMA
Second image is now instead of holding it in cash, you choose an asset class (bonds) that is inversely correlated to equity
and lastly third image is using dollar cost averaging for both. just $100

your drawdown is now far far more tolerable
15% drawdown and 15% average annual growth.
in a nutshell, Dalio forms the basis of asset classes, then simple timing makes it far far more effective.
 

Attachments

  • Total World Equity using SMA as a timing indicator.png
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  • Investing in bonds where equity less than SMA.png
    Investing in bonds where equity less than SMA.png
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  • Investing $100 each month using the same timing model.png
    Investing $100 each month using the same timing model.png
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CavaliereVerde

Senior member
Cutting past drawdown with a moving average is supereasy, avoiding future drawdown is superdifficult.
That is the reason 99% of traders fail to beat spx500, even professional hedge funds.
Dalio is very efficient, no need to time the market.
 

1nvest

Well-known member
Cutting past drawdown with a moving average is supereasy, avoiding future drawdown is superdifficult.
That is the reason 99% of traders fail to beat spx500, even professional hedge funds.
Dalio is very efficient, no need to time the market.
agreed, doesn't mean you sit there though watching your balance erode away; thats a fool's game
 

CavaliereVerde

Senior member
Second image is now instead of holding it in cash, you choose an asset class (bonds) that is inversely correlated to equity
Even better than this you can use Dual Momentum strategy.
The point is that I found many backtests of dual momentum but no live trackrecord.
While Dalio is really investing a lot of money with all weather I never found other managers timing the market.
 

StockNewbie12

Junior member
Here you go, first image is comparing an Equity (such as total world index) to an SMA
Second image is now instead of holding it in cash, you choose an asset class (bonds) that is inversely correlated to equity
and lastly third image is using dollar cost averaging for both. just $100

your drawdown is now far far more tolerable
15% drawdown and 15% average annual growth.
in a nutshell, Dalio forms the basis of asset classes, then simple timing makes it far far more effective.
i think i understand, atleast really trying to hahah.
You're basically saying that i need to find a bond ETF that holds about the same stocks as my Vanguard all-world ETF? To cancell each other out in bad/good times?

And if above statement i'm making is correct then i have to put my money (€100) in to the bond or equity that is decreased in price?
 

1nvest

Well-known member
Even better than this you can use Dual Momentum strategy.
The point is that I found many backtests of dual momentum but no live trackrecord.
While Dalio is really investing a lot of money with all weather I never found other managers timing the market.
im just getting started.
instead of using just world index. and use the stronger of world and SPY.
the reason why 99% dont beat the market is because that's not what they're trying to do. they are simply trying to mimic the exact same. loads of people use that same saying, not knowing the premise of the fund manager in the first place
 

1nvest

Well-known member
i think i understand, atleast really trying to hahah.
You're basically saying that i need to find a bond ETF that holds about the same stocks as my Vanguard all-world ETF? To cancell each other out in bad/good times?

And if above statement i'm making is correct then i have to put my money (€100) in to the bond or equity that is decreased in price?
no, let me break it down for you..
you have two ETFs.
(1) world equity
(2) world bond index
plot the simple moving average on the equity chart (using a monthly chart). when the close of (1) is greater than the sma. buy (1)
when the close of (1) is less than SMA, buy (2)
 

StockNewbie12

Junior member
ut the same stocks as my Vanguard all-world

no, let me break it down for you..
you have two ETFs.
(1) world equity
(2) world bond index
plot the simple moving average on the equity chart (using a monthly chart). when the close of (1) is greater than the sma. buy (1)
when the close of (1) is less than SMA, buy (2)
I think i understand! Can you maybe recommend a bond from this attached list to me? It's a list of commision free trackers from my broker
 

Attachments

  • DEGIRO_Trackers_Kernselectie.pdf
    230.4 KB · Views: 131

1nvest

Well-known member
I think i understand! Can you maybe recommend a bond from this attached list to me? It's a list of commision free trackers from my broker
I've just handed you on a plate a way to absolutely smash "the market" for free. Don't thank me at all
instead ask me to find the commission free ETFs for you
love it!
 

StockNewbie12

Junior member
I've just handed you on a plate a way to absolutely smash "the market" for free. Don't thank me at all
instead ask me to find the commission free ETFs for you
love it!
Well oke haha thank you but seeing i'm really new i won't recognize the golden tip here :D
 

1nvest

Well-known member
Well oke haha thank you but seeing i'm really new i won't recognize the golden tip here :D
IE00BK5BQT80 for World Equity
IE00BZ163M45 for Bonds can't see a good accumulating world bond ETF in your list. US bonds are fine. if they go down the pan, we're all buggered
These two should be all you need to get started. then as your account grows you can look at really maximising growth
 

StockNewbie12

Junior member
IE00BK5BQT80 for World Equity
IE00BZ163M45 for Bonds can't see a good accumulating world bond ETF in your list. US bonds are fine. if they go down the pan, we're all buggered
These two should be all you need to get started. then as your account grows you can look at really maximising growth
Thank you good sir! Glad i already made the right choice for the world equity etf :) bought 4 stocks of that one
 

StockNewbie12

Junior member
no, let me break it down for you..
you have two ETFs.
(1) world equity
(2) world bond index
plot the simple moving average on the equity chart (using a monthly chart). when the close of (1) is greater than the sma. buy (1)
when the close of (1) is less than SMA, buy (2)
How many data points is acceptable to calculate the sma? 7,8? And i'm asuming that those data points should be equal in highs and lows of the montly charts?
 

1nvest

Well-known member
How many data points is acceptable to calculate the sma? 7,8? And i'm asuming that those data points should be equal in highs and lows of the montly charts?
for a 10 month sma, you need 10 data points, 9 month 9 etc
and these should be using the closing price. honestly use yahoo finance or something like that. dont calculate them yourself
 
 
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