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The Greatest Danger Investors Face

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Re: The Greatest Danger Investors Face

Thanks, enjoy reading it.

"Alas, the only people who sell at the top and buy at the bottom are liars and people who are eventually going to make a big mistake at the worst possible time."

So true!

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Re: The Greatest Danger Investors Face

Ah, slow is good, Learner.

Here are a couple of nice reads about the "slow movement" for retirees (something I heartily endorse).

David Ekerdt, "In Defense of the Not-So-Busy Retirement" (Wall Street Journal).

Olga Mecking, "The Case for Doing Nothing" (New York Times).

Time for a swim.  It's hot out.  :-)

Bob

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Re: The Greatest Danger Investors Face


@Learner wrote:

It has been slow here recently.  An article some of you might find useful:

https://awealthofcommonsense.com/2020/07/the-greatest-danger-investors-face/

      Ha. Ha. That’s what probably 90% of the posters do here. Gambling is addicting. 
 
       Most know you can’t usually keep up with your personal inflation rate by keeping all your money in the bank. So I was told when younger you shouldn’t invest in the market unless you can afford to lose the money. So with that background most approach investing in fear of losing leading them to the very behavior in that article.

 

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Re: The Greatest Danger Investors Face


@Learner wrote:

It has been slow here recently.  An article some of you might find useful:

https://awealthofcommonsense.com/2020/07/the-greatest-danger-investors-face/

 


+1

Bingo

Favorite snippets

"It’s estimated that only 1% of day traders studied earn profits over time."

Day-trading is an easy target but there are far more subtle forms of speculation investors can succumb to during times of market stress:
Abandoning your plan. Investment plans can be helpful when things are going well to keep you in check from straying too far from your comfort zone but they really earn their keep during a crisis.

Looking for stock tips. I’m sure it’s happened but you don’t hear too many stories about people who became fabulously wealthy based exclusively on stock tips.

Investing with unrealistic assumptions. One of the most important things you can do as an investor to stay the course is set reasonable expectations up front.

Timing the market. I get the appeal of market timing. Think about how much more money you could have if you could just sell before stocks crash and then buy them back at the bottom!
Volatile markets and economic crises tempt investors with the prospects of market timing even more than normal times as recency and hindsight bias shift into overdrive.
Alas, the only people who sell at the top and buy at the bottom are liars and people who are eventually going to make a big mistake at the worst possible time.

 

 

"There seems to be some perverse human characteristic that likes to make easy things difficult.---Warren Buffett"

veni vidi vici vti
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Re: The Greatest Danger Investors Face


@Bentley wrote:

@Learner wrote:

It has been slow here recently.  An article some of you might find useful:

https://awealthofcommonsense.com/2020/07/the-greatest-danger-investors-face/

 


+1

Bingo

Favorite snippets

"It’s estimated that only 1% of day traders studied earn profits over time."

Day-trading is an easy target but there are far more subtle forms of speculation investors can succumb to during times of market stress:
Abandoning your plan. Investment plans can be helpful when things are going well to keep you in check from straying too far from your comfort zone but they really earn their keep during a crisis.

Looking for stock tips. I’m sure it’s happened but you don’t hear too many stories about people who became fabulously wealthy based exclusively on stock tips.

Investing with unrealistic assumptions. One of the most important things you can do as an investor to stay the course is set reasonable expectations up front.

Timing the market. I get the appeal of market timing. Think about how much more money you could have if you could just sell before stocks crash and then buy them back at the bottom!
Volatile markets and economic crises tempt investors with the prospects of market timing even more than normal times as recency and hindsight bias shift into overdrive.
Alas, the only people who sell at the top and buy at the bottom are liars and people who are eventually going to make a big mistake at the worst possible time.

 

 


My one stock tip was from my son who told me to buy AAPL when it was at 90. I have continued to buy more when price is depressed. I repaid him by telling him to buy AMZN.

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Re: The Greatest Danger Investors Face


@Intruder wrote:

@Bentley wrote:

@Learner wrote:

It has been slow here recently.  An article some of you might find useful:

https://awealthofcommonsense.com/2020/07/the-greatest-danger-investors-face/

 


+1

Bingo

Favorite snippets

"It’s estimated that only 1% of day traders studied earn profits over time."

Day-trading is an easy target but there are far more subtle forms of speculation investors can succumb to during times of market stress:
Abandoning your plan. Investment plans can be helpful when things are going well to keep you in check from straying too far from your comfort zone but they really earn their keep during a crisis.

Looking for stock tips. I’m sure it’s happened but you don’t hear too many stories about people who became fabulously wealthy based exclusively on stock tips.

Investing with unrealistic assumptions. One of the most important things you can do as an investor to stay the course is set reasonable expectations up front.

Timing the market. I get the appeal of market timing. Think about how much more money you could have if you could just sell before stocks crash and then buy them back at the bottom!
Volatile markets and economic crises tempt investors with the prospects of market timing even more than normal times as recency and hindsight bias shift into overdrive.
Alas, the only people who sell at the top and buy at the bottom are liars and people who are eventually going to make a big mistake at the worst possible time.

 

 


My one stock tip was from my son who told me to buy AAPL when it was at 90. I have continued to buy more when price is depressed. I repaid him by telling him to buy AMZN.


 

 Where did you get the idea to buy KMI at $42?

"There seems to be some perverse human characteristic that likes to make easy things difficult.---Warren Buffett"

veni vidi vici vti
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Re: The Greatest Danger Investors Face


@Bentley wrote:

@Intruder wrote:
My one stock tip was from my son who told me to buy AAPL when it was at 90. I have continued to buy more when price is depressed. I repaid him by telling him to buy AMZN.

 Where did you get the idea to buy KMI at $42?


Reported to Admin. Please stop polluting these boards with your personal attacks.

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Re: The Greatest Danger Investors Face


@chang wrote:

@Bentley wrote:

@Intruder wrote:
My one stock tip was from my son who told me to buy AAPL when it was at 90. I have continued to buy more when price is depressed. I repaid him by telling him to buy AMZN.

 Where did you get the idea to buy KMI at $42?


Reported to Admin. Please stop polluting these boards with your personal attacks.


 

Personal attack? There is nothing personal nor is there an attack. Did you even read the article posted in the OP? Did you read the post I quoted? This is an investment forum. The OP posted an article which pointed to some issues which may lead investors astray, relying on stock tips was one.

 

  "Looking for stock tips. I’m sure it’s happened but you don’t hear too many stories about people who became fabulously wealthy based exclusively on stock tips."

 

Not all "stock tips" are profitable, in fact, I believe they cause more harm than good. Feel free to disagree.

"There seems to be some perverse human characteristic that likes to make easy things difficult.---Warren Buffett"

veni vidi vici vti
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Re: The Greatest Danger Investors Face

Your story might sound good if it weren’t the 1,000th time you’re berating KMI buyers. I never owned it, I’m just sick of hearing you attack people for this, that and the other.

Just my observation.

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Re: The Greatest Danger Investors Face

The OP article and others like it is why we became Bogleheads in 2006 when our port recuperated from the 2000-2002 bear market.

In general. Bogleheads are less likely to speculate. We are less likely to panic in a market sell off.

In fact. The only two times we did speculate is when we over rebalanced in Jan 2009 and Mar 31 2020. I call it "buying the bear".

Both times it helped our port recuperate in less time. Boosting our port's long term CAGR.

BTW. We've never even considered KMI. I'm going to look it up.

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Re: The Greatest Danger Investors Face

Chang, I also reported it.

I find them very rude, offensive, laser focused personal attacks. Even if names aren't mentioned which is rare, the intent of personal attack is still there.

I am also tired of the bottled response we always get,   -- 'Who, Me?'

Fishingrod

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Re: The Greatest Danger Investors Face

Kindly exempt  the OP--Learner--from any accusations of personal attack.

He posts for purposes of discussion, not personal attack--very characteristic of us TIAA folk.

I welcome Learner's post.  I have no use for the predictable personal attacks from other sources.

I don't know any day traders, but I certainly know (well) folks who have successfully invested in individual stocks and continue to do so in retirement.

I am mainly an annuitant, an indexer, with VWIAX thrown into the mix.  In other words, I am b o r I n g.  :-)

Bob

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Re: The Greatest Danger Investors Face

Thanks, Bob.  I am sorry that this thread took the direction it did.

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Re: The Greatest Danger Investors Face


@chang wrote:

Your story might sound good if it weren’t the 1,000th time you’re berating KMI buyers. I never owned it, I’m just sick of hearing you attack people for this, that and the other.

Just my observation.


 

OK, I was unable to figure exactly who the personal attack you accused of making, was directed at, but according to you, it was everyone who ever purchased KMI? Replace KMI with MLPL or 2X ETN’s in general, would that have been a personal attack on anyone other than a strategy or product? Had I asked a question about “tips” related to the energy sector, MLPs, or specific industries, would that have been a personal attack on all those who bought those related products?

Calm down. I support the article posted in the OP and you need to stop confusing support for different strategies and basic investment philosophy as personal attacks. The issues with acting on stock tips are many………


"Looking for stock tips. I’m sure it’s happened but you don’t hear too many stories about people who became fabulously wealthy based exclusively on stock tips.

It would be wonderful if your brother-in-law or co-worker or old college roommate could offer up the next hot stock just before it goes to the moon but that’s about as speculative as it gets. Basing your portfolio moves on stock tips is a sure sign you have no investment plan or guidelines driving your actions."


As Ben Graham put so eloquently as quoted in the OP’s referenced article;

"The problem with our industry, Graham insisted, is not speculation per see; speculation has always been part of the market and always will be. Our failure as professionals, he went on, is our continuing inability to distinguish between investment and speculation. If the professionals can’t make that distinction, how can individual investors? The greatest danger investors face, Graham warned, is acquiring speculative habits without realizing they have done so. Then they end up with a speculator’s return — not a wise move for someone’s life savings."

I fully support the OP, the posted article, and the ideas presented in the article and did not mean for my post to be taken as a “personal attack” on anyone.

Cheers

"There seems to be some perverse human characteristic that likes to make easy things difficult.---Warren Buffett"

veni vidi vici vti
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Re: The Greatest Danger Investors Face

Always good to re-read sound advice. Thanks to the OP.

In my IRA, I used to do silly things like throw a  thousand bucks at a speculative stock. Given that my IRA fluctates a thousand bucks easily on a dull trading day, I had fallen into that speculative trap where I thought "what can it hurt".  Well, it can hurt and I've stopped. Mutual funds going forward.

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Re: The Greatest Danger Investors Face

DocWu,

When I retired back in the day, I closed my Schwab account (I was "active" in their parlance) and shifted taxable money to Vanguard. I did not want to spend my precious retirement time obsessing about my individual stock holdings.

The change sure freed up a whole lot of quality time. 😁

Bob 

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Re: The Greatest Danger Investors Face

I agree with Bentley.  It was not a personal attack.  The article warned against using stock tips.  Bentley agrees with it and the other warnings.  Intruder then suggests he got a good stock tip from his son without any background as to if his son is even in the investment business.  He then claims he gave his son another stock tip.  Both tips just happen to be for two of the hottest stocks ever.  I think it is fair to ask where he got one of the worst stock tips ever as a way of showing that tips are only hit or miss.

Those who don't like Bentley's posts, and say so often, should perhaps just quit reading them.

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Re: The Greatest Danger Investors Face


@DocWu wrote:

Always good to re-read sound advice. Thanks to the OP.

In my IRA, I used to do silly things like throw a  thousand bucks at a speculative stock. Given that my IRA fluctates a thousand bucks easily on a dull trading day, I had fallen into that speculative trap where I thought "what can it hurt".  Well, it can hurt and I've stopped. Mutual funds going forward.


I had the same issue, which is why I resisted Vanguard's attempts to force me into their brokerage platform.  I'm there now but still just OEFs and few ETFs, all Vanguard.  I totally understand that feeling that 10K up or down in a day is no big deal and can make you careless if you let it.

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Re: The Greatest Danger Investors Face


@GLI2019 wrote:

DocWu,

When I retired back in the day, I closed my Schwab account (I was "active" in their parlance) and shifted taxable money to Vanguard. I did not want to spend my precious retirement time obsessing about my individual stock holdings.

The change sure freed up a whole lot of quality time. 😁

Bob 


I have about 10% of my assets in VG Roth accounts and an inherited IRA which is my aggressive growth fund  invested in AAPL, AMAZ, MSFT, NFLX, HD, QQQ. I let the stocks ride and occasionally sell one and buy another to see if there will be a higher return. I dont worry if there is a correction because the stocks always go higher And I can increase my holdings. Making a trade is easy. I log on to VG and make a no fee trade. If I ever need cash I can sell some shares and pay 0 taxes.

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