Official Shiny Things thread—Part III

[doody_]

It's a dangerous strategy. If it doesn't hit 2200 and rebound back to 3000 after 6 months, you would have bought 20% only

That's ok, this is a warchest deployment plan. If it doesn't hit 2200, at least I managed to get in 20% extra. Better than timing the warchest deployment for the rock bottom and missing the whole thing. Isn't that the general idea behind dca anyway, which is not to time the market? The monthly purchasing still goes on

 

[flowerpalms]

Pay is in tmr. Time to DCA tomorrow for the month of March. Calculated most shortfall is Iwda, going for it.

Dont buy the dips, dont time the market. Instead will be increasing the amount.

1st time $1000
1st adjustment $1160
2nd adjustment $1726.73 - starting this month

 

[ftpofmpo]

Nobody is fighting you at all. I can understand why you feel you are being "fought" when you are facing difficult questions that you cannot answer adequately. Perhaps getting me banned is the best way to sell your book by silencing all doubters?

There are many constructive suggestions that have been offered, you just chose to ignore them and avoid answering any doubts about them. Or simply brush them aside with some simple tropes. Some offered include:

1) Opting for high interest bank accounts instead of MBH/A35 to avoid lack of liquidity and lack of negative correlation when stocks tank. Cash is king.

2) Allocate some assets in cash to keep a war chest to time the market when it falls. This allows you to continue to DCA when your income is affected as well.

3) Have a better asset allocation rule other than 110-age.

These were posted nicely in my previous post which you simply ignored BTW.
I expect you to brush this aside with some simple tropes again as well.

There are also many other suggestion by others which you'd simply ignore.

These are genuine concerns by people who have followed your method are currently experiencing. Besides, how many people actually stick to your method for the long term? Most of your current fanboys here are recent joiners and readers, the others who I have seen in the past have largely disappeared/deviated going their own way.

Saying "Stonks only go up! Herp DURRR just keep buying! Oh you lost your job and can't buy? Sorry please take care of yourself with your emergency fund!" doesn't do anyone any favors in addressing the concerns as this is just brushing them away.

dca is a proven strategy (majority of ppl don't time well), provided the amount invested is within acceptable risks. most important thing is to have enough holding power and investments are diversified enough that companies going bankrupt will not decimate the nest egg.

you have raised relevant points to remind ppl not to take on excessive risk though

 

[fuddlebox]

IBKR tax form 1042-S

Hi guys

Just wondering if anyone of you using IBKR received a tax form 1042-S? What to do about it as it does not seem to apply to me as I only invest in IWDA. I’m neither a US citizen nor reside/work/do business in the US.

I’ve already filled out the w8 form when I signed up for an IB account and I don’t hold any US domiciled stocks. Do I simply ignore this? Will it somehow have an effect when I sell my stocks in future ?

 

[Nesort]

I agree that there are too much toxicity in this thread lately. Sorry if I am making it even worse but I like to make a few points from my experience.

I have a "warchest" that was in place since 2017-8. Although right now is a good time to deploy said "warchest". I find it even more difficult to deploy now because thoughts like "This is going to go even lower!", and "Cash is king! Stock will never recover" always pop up in my mind. Reading the news would always be stuffs like "Great Depression 2020!" etc

Now due to the US Fed "bazooka" the stock market now has its "Biggest One-Day Jump Since 1933". Thought like "It is going to go down again, just you wait" now appears. Till now I am stuck and could not deploy said warchest.

I guess my point is that different people may be suitable for different strategy.
Some people may be risk takers and can deploy their "warchest" once it "hit the bottom". That is also the best way to earn in fact. But some people may hesitate and not move at all until at the worst possible timing. Thus, having a DCA for them is more towards to eliminate the emotion side and continue to invest instead of just stopping forever.


Also another thing I like to share is I had OCBC 360 account and DBS multiplier account.
Both after a few years, just switches their terms and conditions to become worse. So I felt that you cannot really trust them to maintain their conditions at all in the long run.But as a temporary storage I think it is ok .

 

[highsulphur]

I agree that there are too much toxicity in this thread lately. Sorry if I am making it even worse but I like to make a few points from my experience.

I have a "warchest" that was in place since 2017-8. Although right now is a good time to deploy said "warchest". I find it even more difficult to deploy now because thoughts like "This is going to go even lower!", and "Cash is king! Stock will never recover" always pop up in my mind. Reading the news would always be stuffs like "Great Depression 2020!" etc

Now due to the US Fed "bazooka" the stock market now has its "Biggest One-Day Jump Since 1933". Thought like "It is going to go down again, just you wait" now appears. Till now I am stuck and could not deploy said warchest.

I guess my point is that different people may be suitable for different strategy.
Some people may be risk takers and can deploy their "warchest" once it "hit the bottom". That is also the best way to earn in fact. But some people may hesitate and not move at all until at the worst possible timing. Thus, having a DCA for them is more towards to eliminate the emotion side and continue to invest instead of just stopping forever.


Also another thing I like to share is I had OCBC 360 account and DBS multiplier account.
Both after a few years, just switches their terms and conditions to become worse. So I felt that you cannot really trust them to maintain their conditions at all in the long run.But as a temporary storage I think it is ok .

For me i set the following plan for my warchest

1) decide the time horizon to deploy war chest. I decided until end 2020

2) decide split of iwda and es3 to bring them to your ideal ratio

3) execute them on alternative weeks each month to minimize volatility week to week

4) at the same time, I set limit targets basis % decline from the peak. I have discretion to bring forward my purchase from subsequent months if these limits are hit first.

5) lastly avoid reading too much news or even coming to these forums too often. We all know it's bad, hence the collapse. No need to go over the same news again and again. Stick with your plan.

 

[SpeedingBullet]

maaan this thread has become a sh1tshow. So many weirdos coming out of the woodworks and trolling.

I guess it's a bear market thing?

 

[hahaman111]

ST, any thoughts on Warren Buffett's proposed 90-10 indexing portfolio for layman? Is it too risky?

 

[highsulphur]

ST, any thoughts on Warren Buffett's proposed 90-10 indexing portfolio for layman? Is it too risky?

He can afford a 50 or even 90% correction and still a multi millionaire. Can you? The 110 minus age is more relevant to the man on street. You can skew the allocation as you get wealthier

 

[hahaman111]

He can afford a 50 or even 90% correction and still a multi millionaire. Can you? The 110 minus age is more relevant to the man on street. You can skew the allocation as you get wealthier

He recommend for average people. Not himself la. That's why I asking for ST's opinion.

 

[decibel.]

Isn't printing infinite USD going to bring down the value of the dollar in future?

Sent from HUAWEI VOG-L29 using GAGT

 

[d9_lives]

maaan this thread has become a sh1tshow. So many weirdos coming out of the woodworks and trolling.

I guess it's a bear market thing?

Some people are just wired that way.
You can find plenty of them in EDMW.
They...aka bbfas, nitpickers, gahmen bashers, armchair critics, return my cpf crowds, ungrateful charsiews, xenophobics, complain kings/queens..are bitter and annoying.

When situation is improving, they will go into hiding and waiting for better time to strike again.

Anyway, back to topic....

 

[Okenba]

He can afford a 50 or even 90% correction and still a multi millionaire. Can you? The 110 minus age is more relevant to the man on street. You can skew the allocation as you get wealthier

If you're going to hold for 20-30 yrs anyway, it doesn't make much of a difference. So long as you have sufficient emergency funds to tide you through your emergencies, AA is probably more a function of age than wealth.

 

[Zink00]

Isn't printing infinite USD going to bring down the value of the dollar in future?

Sent from HUAWEI VOG-L29 using GAGT

 

[highsulphur]

If you're going to hold for 20-30 yrs anyway, it doesn't make much of a difference. So long as you have sufficient emergency funds to tide you through your emergencies, AA is probably more a function of age than wealth.

Say I have 20m portfolio and I'm 70 years ago. From the 110- age guide, I'm suppose to 40:60 into equity:bond. But I can still allocate 20% to a bond etf ( that yields 2%) and the balance to equity etf. That bond component is sufficient for me to sustain my retirement. Absolute wealth matters for me

 

[BBCWatcher]

Just wondering if anyone of you using IBKR received a tax form 1042-S? What to do about it as it does not seem to apply to me as I only invest in IWDA. I’m neither a US citizen nor reside/work/do business in the US.

You check to make sure all your U.S. dividend taxes were properly withheld: not too much, not too little. Then keep that form in your personal financial records.

I have a "warchest" that was in place since 2017-8. Although right now is a good time to deploy said "warchest". I find it even more difficult to deploy now because thoughts like "This is going to go even lower!", and "Cash is king! Stock will never recover" always pop up in my mind. Reading the news would always be stuffs like "Great Depression 2020!" etc....

It seems you have a form of performance anxiety. OK, no problem, take some number of months -- 10 is probably as good as any. Divide your warchest by that number, and start diving in, one month at a time, every month. If valuations crash, you win: you're buying cheaper assets. If they don't, you win: you have a long time horizon ahead of you, presumably. Or some of both.

Say I have 20m portfolio and I'm 70 years ago. From the 110- age guide, I'm suppose to 40:60 into equity:bond. But I can still allocate 20% to a bond etf ( that yields 2%) and the balance to equity etf. That bond component is sufficient for me to sustain my retirement. Absolute wealth matters for me

The "110 minus age" rule is what's known as a "rule of thumb." It doesn't apply to every situation, and (as it happens) I prefer an operationally simpler rule of thumb. It doesn't apply to extreme wealth. Jeff Bezos doesn't follow this rule, as another example.

 

[revhappy]

Say I have 20m portfolio and I'm 70 years ago. From the 110- age guide, I'm suppose to 40:60 into equity:bond. But I can still allocate 20% to a bond etf ( that yields 2%) and the balance to equity etf. That bond component is sufficient for me to sustain my retirement. Absolute wealth matters for me

I think everyone should do a hair cut to their equity portfolio by 50% whenever they do a valuation. Equities can anytime fall 50%. The worst thing is to happen is just at the time of retirement when you are about to hit your number equities fall 50% and psychologically that is devastating.

So it is better to mentally assume your wealth = wealth minus 0.5X equities.

 

[razoreigns]

By keeping a "emergency DCA" fund, you are not fully utilising your cash in the stock market. Secondly, you do not know when is the next huge drop coming. It may be 10years? That means miss out 10 years of time in the market.
Better idea is to balance your bond into equities, but that would mean you will not be following the ratio.

idea of DCA is to have consistent grow over long period, and not quick rapid growth over a short period.

Posted from PCWX using Redmi K20 Pro

The question on the viability of an emergency DCA fund is not for the purpose of timing the market or making short term rapid gains. It is to manage the risk of interrupted DCA investments (at the worst possible timing), thus affecting long term returns. It's really to protect the DCA strategy.

Yes, there is a trade off for keeping this emergency DCA fund as you mentioned.
Question is, is it worth the trade off.

 

[BBCWatcher]

I think everyone should do a hair cut to their equity portfolio by 50% whenever they do a valuation. Equities can anytime fall 50%. The worst thing is to happen is just at the time of retirement when you are about to hit your number equities fall 50% and psychologically that is devastating.

So it is better to mentally assume your wealth = wealth minus 0.5X equities.

I don't think anybody sensible has 100% of his/her wealth invested in stocks. And if you're planning to retire tomorrow a "textbook" allocation would be something like 30%-70% (30% stocks, 70% bonds), the end point of a many year, glide path portfolio adjustment.

Also, if you're going to take this point of view -- and it could be reasonable -- you should take the same point of view for all assets you hold, including as a notable example real estate. This'd be something you might call your "total household wealth on a distressed asset basis." This is a form of household financial "stress testing."

One reason I like having a baseline foundation of life annuities/longevity insurance from quality payers -- preferably high quality sovereigns (plural), escalating, and joint/survivor (or at least joint/contingent) -- is precisely because such a strong foundation defends against all downside risks insofar as humanly possible. "Below THIS our lifestyle will never fall, for the rest of our days." It's also the reason I'm a firm believer in covering genuine insurance necessities, including disability income insurance (DII). Money and wealth have no value except in terms of what it can buy, and what I want fundamentally is worry free lifestyle stability.

 

[BBCWatcher]

The question on the viability of an emergency DCA fund is not for the purpose of timing the market or making short term rapid gains. It is to manage the risk of interrupted DCA investments (at the worst possible timing), thus affecting long term returns. It's really to protect the DCA strategy.

Yes, this topic has come up several times. I think it's OK if you wish to include a couple or a few months of regular monthly savings/investment flow in your general pool of emergency reserve funds. For example, if you decide you want to keep 12 months' worth of emergency reserve funds on hand (in an ordinary bank account, Singapore Savings Bonds, and -- to the extent it can service a mortgage -- CPF OA), plus add 4 months' worth of regular dollar cost averaged savings/investing, that could be perfectly reasonable. Then, if/when a genuine emergency occurs, you can decide what to do. For example, if it's a job loss, but it's also rational to forecast a return to work within a month or two, no problem, household spending and saving can stay pretty much level and that's that. For emergencies that you expect to be more serious and sustained, you might take a different approach.