Official Shiny Things thread—Part III

[swan02]

What about those who don't know that they don't know?

Does paper loss/gain today, matter to DCA folks?

Of cuz it does if ya faced with sequence of risk returns. I hope there is a big chapter in shiny’s book about this. I guess there wasn’t ?

 

[swan02]

What if 'that guy' in China didn't crave for bat meat? What will you sing today?

I don't believe in keeping warchest.
EF secured, all my money put to work.

You sound like a young person with a small portfolio and a good job ? if so,
That’s a good strategy allocation of 100 percent risk.

Try answering that question again when u reach the million Dollar mark.

 

[BBCWatcher]

In short, what you do to your general financial health before the crisis will affect your ability to capitalize the opportunity that presents itself in a crisis. Many forget the part that job security is usually inversely correlated with financial crisis. Sure the stocks or properties are cheap but can you sustain your job to buy more stocks or property

A couple points:

1. Let's suppose you experience a job loss, and you're saving and investing $X/month. If you have adequate reserves then you can maintain that $X/month savings flow. Then you go back to work at some point, you keep plugging away, and that's that. However, if you don't go back to work as soon as you'd like, the money hasn't disappeared. It has bought cheaper stocks and cheaper bonds in the scenario you've outlined. You try not to draw down long-term investments, but you're able to if the interruption is prolonged. (And if you have to do this then you'd start with a portfolio rebalancing operation, first drawing down whichever vehicle is "most too high" for your desired allocation percentages. And/or do some tax loss harvesting, possibly, in tax jurisdictions where that applies/if applicable.)

2. OK, let's suppose everything is the same except you signed up for one of those awful insurance company investment products that has a monthly premium of $X+Y/month. (That'll cost more to get the same outcome.) And here's the one possible advantage that such products have: many people really, really don't want to stop paying the premium, even when they lose their jobs. If you stop paying then you typically have a terrible surrender value (or even zero), and if you keep paying but then have to draw down, same thing. The insurance company forces you to "do the right thing" for your long-term interests, except you're screwed if the job loss/emergency is prolonged.

I prefer Option #1, don't you? But it requires some discipline that you're not buying (at high cost) from an insurance company and its premium billing department, and this is why so many people strongly advocate building up an emergency reserve first.

 

[Newbyib]

When IWDA closed yesterday night, US was down lower circuit, so IWDA had already priced it.

I would suspect that when the US market is closed, the IWDA would track the futures price SPX, RUT or whatever and the implied price. So there is little or no arbitrage.

 

[Rknight]

Now that prices are for ST index and IWDA had dropped.
I am following the DCA method.
Is it wise to invest 11months of money into this 2 indexes now that it had dropped?
So that the same amount of money can buy a bigger portion and thus averaging the whole sum down.

 

[highsulphur]

Now that prices are for ST index and IWDA had dropped.
I am following the DCA method.
Is it wise to invest 11months of money into this 2 indexes now that it had dropped?
So that the same amount of money can buy a bigger portion and thus averaging the whole sum down.

You already started. Why stop now?

 

[flowerpalms]

Pls dont stop DCA every month .

Dont go all in 11 months just because price has gone down. Dont time the market, you can't do it, nobody can. Continue to DCA monthly and stick to it.

Now that prices are for ST index and IWDA had dropped.
I am following the DCA method.
Is it wise to invest 11months of money into this 2 indexes now that it had dropped?
So that the same amount of money can buy a bigger portion and thus averaging the whole sum down.

 

[Thoreldan]

Pls dont stop DCA every month .

Dont go all in 11 months just because price has gone down. Dont time the market, you can't do it, nobody can. Continue to DCA monthly and stick to it.

But even ST mentioned that it doesn't hurt to go a little more to scoop up when things are on great discount.

Do u not agree with him now ?

++++++
Originally Posted by ashrmsh:
With all that in mind, I just want to clarify: is there anything inherently wrong with my strategy of looking to mobilise more of my warchest into VWRA today when it's cheaper? Thanks all!
+++++
ST's Reply:
Not if it’s money you were going to use to invest anyway. Stuff’s on sale; why not take advantage of it?
+++++

Oh wait..will i get infraction points by posting this ?

 

[chrisloh65]

Because Market Marker is not doing the job of providing liquidity, hence impeding the bid-ask price and makes the transacted price different from the NAV (which is lower than current transacted price). This is another risk with investing in ETFs since you will be paying a premium to buy a bunch of stocks (which you can buy more cheaply if you buy the stocks directly) or also possibly sell at a lower price than what the stocks making up of the ETF are worth.

Anyone knows why IWDA didn't fall as much when the SP500 falls more than 11%>

IWDA currently holds sixty percent of it's portfolio in US markets but only drop a percent or two only...

 

[chrisloh65]

Will you? You will know soon............

But even ST mentioned that it doesn't hurt to go a little more to scoop up when things are on great discount.

Do u not agree with him now ?

++++++
Originally Posted by ashrmsh:
With all that in mind, I just want to clarify: is there anything inherently wrong with my strategy of looking to mobilise more of my warchest into VWRA today when it's cheaper? Thanks all!
+++++
ST's Reply:
Not if it’s money you were going to use to invest anyway. Stuff’s on sale; why not take advantage of it?
+++++

Oh wait..will i get infraction points by posting this ?

 

[12retire]

IB TWS - US stocks not showing prices

Hi folks,

I'm looking at US stocks such as AAPL, AMZN, BABA, FB, GOOG now ... there is no Bid/Ask price ... why is this so?

 

[BBCWatcher]

This is another risk with investing in ETFs since you will be paying a premium to buy a bunch of stocks (which you can buy more cheaply if you buy the stocks directly) or also possibly sell at a lower price than what the stocks making up of the ETF are worth.

That's just not correct. Nobody except perhaps massively huge "whales" can buy the 1,733 individual stocks in IWDA (in the required weights) more cheaply than just buying IWDA. And it doesn't matter anyway since IWDA is Irish domiciled and the the 1,733 individual stocks aren't, so this hypothetical Singapore resident whale gets whacked with higher dividend tax.

 

[Purplestars]

imo dca is still relevant because one fact for sure is that we will never be able to know when the market will crash. we could be holding onto a large pie of cash waiting for a crash that might never come till we reach our old age. There’s this possibility.

Holding a large pile of cash into old age isn’t the worse thing in the world to happen is it?

Yeah, so did 'they' in 2010, 2011, 2012... in fact every year until today.
What do we say about a broken clock?

You don’t have to listen to anybody, just trusted sources and do your own research. Do you disregard all medical health advice from all professionals because some quack doctor told you cancer can be cured with fruit juices?

Pls dont stop DCA every month .

Dont go all in 11 months just because price has gone down. Dont time the market, you can't do it, nobody can. Continue to DCA monthly and stick to it.

Watch the Big Short, it’s a movie/book about a bunch of guys who successfully timed and shorted the housing market.

Buffett doesn’t DCA, he times the market pretty successfully.

Many professionals time the market for a living.

A couple points:

1. Let's suppose you experience a job loss, and you're saving and investing $X/month. If you have adequate reserves then you can maintain that $X/month savings flow. Then you go back to work at some point, you keep plugging away, and that's that. However, if you don't go back to work as soon as you'd like, the money hasn't disappeared. It has bought cheaper stocks and cheaper bonds in the scenario you've outlined. You try not to draw down long-term investments, but you're able to if the interruption is prolonged. (And if you have to do this then you'd start with a portfolio rebalancing operation, first drawing down whichever vehicle is "most too high" for your desired allocation percentages. And/or do some tax loss harvesting, possibly, in tax jurisdictions where that applies/if applicable.)

I prefer Option #1, don't you? But it requires some discipline that you're not buying (at high cost) from an insurance company and its premium billing department, and this is why so many people strongly advocate building up an emergency reserve first.

Excellent. Even BBCWatcher recommends building a war chest to time the market at least partially now.

 

[12retire]

Hi folks,

I'm looking at US stocks such as AAPL, AMZN, BABA, FB, GOOG now ... there is no Bid/Ask price ... why is this so?

I chatted with IB customer service .. she said I have to subscribe to market data in order to see bid/ask price for US stocks.

When i asked her why I can see LSE ETFs bid/ask price, she said "The market data subscription for UK stocks and ETF at the LSE is UK LSE Equities" - I don't know what she meant.

Can someone explain to me?

 

[blurblur123]

Holding a large pile of cash into old age isn’t the worse thing in the world to happen is it?



You don’t have to listen to anybody, just trusted sources and do your own research. Do you disregard all medical health advice from all professionals because some quack doctor told you cancer can be cured with fruit juices?




Watch the Big Short, it’s a movie/book about a bunch of guys who successfully timed and shorted the housing market.

Buffett doesn’t DCA, he times the market pretty successfully.

Many professionals time the market for a living.



Excellent. Even BBCWatcher recommends building a war chest to time the market at least partially now.

Agree with you. Now is a good time to buy some stocks actually.

I stopped buying stocks after 2014. Need to start reading again to catch up. My choices last time was keppel and sg etf

 

[Investnewbie82]

I was intrigued by the idea of DCA half the amount when the market is going up (other half the amount going into warchest) and twice the amount when the market is down.

Any thoughts on this?

But even ST mentioned that it doesn't hurt to go a little more to scoop up when things are on great discount.

Do u not agree with him now ?

++++++
Originally Posted by ashrmsh:
With all that in mind, I just want to clarify: is there anything inherently wrong with my strategy of looking to mobilise more of my warchest into VWRA today when it's cheaper? Thanks all!
+++++
ST's Reply:
Not if it’s money you were going to use to invest anyway. Stuff’s on sale; why not take advantage of it?
+++++

Oh wait..will i get infraction points by posting this ?

 

[bladez87]

I was intrigued by the idea of DCA half the amount when the market is going up (other half the amount going into warchest) and twice the amount when the market is down.

Any thoughts on this?

Sometimes need to do back testing for all this kinda simulations. When is the market going down? - 10% - 15%? It really affects the outcome.

 

[culepico]

I was intrigued by the idea of DCA half the amount when the market is going up (other half the amount going into warchest) and twice the amount when the market is down.

Any thoughts on this?

You must ask yourself how long and how much do you foresee the market to go up or down and do the calculations yourself. If it's going down only for weeks and you doubled your DCA during that period, congratz because you got a bargain. But if it gonna last for months or even longer, are you gonna keep suffering losses when you double your DCA during this period?

'Nobody knows' is a cheap and convenient excuse to give, please don't fall into this trap. When you invest I assume you wanna know something. Information is abundant in today's world and it's up to you to synthesize them and make your moves accordingly.

 

[Okenba]

You must ask yourself how long and how much do you foresee the market to go up or down and do the calculations yourself. If it's going down only for weeks and you doubled your DCA during that period, congratz because you got a bargain. But if it gonna last for months or even longer, are you gonna keep suffering losses when you double your DCA during this period?

'Nobody knows' is a cheap and convenient excuse to give, please don't fall into this trap. When you invest I assume you wanna know something. Information is abundant in today's world and it's up to you to synthesize them and make your moves accordingly.

So is it too early to go in now? When will you go in?

 

[cassowary18]

Just my 2c worth, don't flame.

I'll hold my ammo for at least a month. Whole world on quarantine means no consumer spending. Expect a few companies to go bankrupt in the next few weeks. I think airlines would be first to go.

When quarantine restrictions start getting lifted would be the best time to start going in again.