Investment changes during Covid? Good? Bad? What next?

[Clivevon]

So back to Rule 4 for a minute. Diversify your assets. In other words spread your investments between different asset classes - shares, fixed interest, property.
Also diversify between different managers & different investment styles. Maybe have 5 or 10 different managers.
A little warning here - my much more "into all this" Manhattan investment analyst son (in his mid 30s) says that I am diversifying away the alpha. I know what he means but I do like to sleep at night - like I said I look at my investments once a year...

[Clivevon]

OK so you don't buy funds. You buy shares directly.

You mean you handle all that paper yourself ??

Yeah I know its not paper anymore but ist still admin time & effort.

[Clivevon]

Last word - my ideal investment objectives are to maintain the real value of my capital over the long term while taking 4% a year income forever. That is of course relevant to how i invest.

Sorry to hog the thread - hope some of that was helpful to somebody.

[Clivevon]

& finally - dont forget the impact of taxes..

[BruceS]

We got some Poms over here like that!

[Belezar]

I generally stay invested in stocks. I also have a significant portion of my assets in real estate. At these interest levels I’d rather be in cash and have dry powder for undisciplined irrational market moves. I doubled and better on many quality names after the sell off. My overall strategy is I have macro ideas and directional thoughts. These are kind of may guard rails. I talk with my broker about them and we have a game plan. I spent my career in finance in the bond markets so I have a basis to work from. We made some macro moves due to Covid but not many. I do think looking at the future is important. In general, the world wide pandemic will push more money into health care and related industries. Some cyclicals may get a good run as pent up travelers get out there. I never speculate or do commodities. Too risky for me. I’m very hands off. A month or three can go by and I don’t look.

[mvweebles]

Delete

[NPCampbell]

Originally Posted by jmschmidt

There is a difference between an investor and a speculator. The poster is obviously the latter.

I'm curious as to what your definition of a speculator is?

[Clivevon]

Well explained here:
https://economictimes.indiatimes.com...5.cms?from=mdr

[Jetx]

Originally Posted by Clivevon

b) When a company's share price rises it will form a larger part of that index so the tracker fund will automatically have to buy more of those shares. When its share price falls it will be a smaller component of the index, so the tracker fund will have to sell some shares. Buy as the price rises, sell as the price falls. Buy high, sell low. This is the exact opposite of what most successful investors want to do.

As another retired financial advisor / investment manager, I agree with much of what Clivevon says... but this one is factually incorrect. In a capitalization-weighted index (which the vast majority are), the index composition changes in percentage terms when share prices go up or down, but the index holdings in share terms do not change one iota. If the share price of say, Apple, doubles, then Apple does indeed now represent twice as big a portion of the index as it did previously. But an Apple-owning index fund now also automatically owns twice as much Apple in dollar terms. So the index fund manager does not need to buy or sell any shares. This is why actual turnover in index funds is minuscule.

It is extremely difficult for active managers to beat indexes on a risk-adjusted basis. Very, very few will do it with any kind of consistency (although statistically a significant share of them will do it in any given year out of sheer random luck), but identifying them in advance is nearly impossible. Many investment managers (mutual fund managers, individual advisors, managers-of-managers) of course will advertise impressive outperformance... but when you look closely, they do it by comparing themselves to an inappropriate index/benchmark (putting a thumb on the scale). Mutual companies also do it by advertising their (lucky) winning funds, while quietly closing their underperforming funds (usually by merging the losing fund into a lately-winning one). Active management is a fantastic way to make money... for the managers.

Clivevon is 100% correct that the OP is speculating (aka gambling), Jim Cramer style, not investing. Hopefully he’ll get lucky, but odds are not good.

To the OP, I’d suggest NOT seeking or taking investment tips from this or any internet forum. Start by reading anything by William Bernstein (The Four Pillars of Investing is an excellent place to start) or any of Larry Swedroe’s earlier books. These won’t give you everything you need to be the best steward of your investment assets, but if you take them to heart (which is to say, if you need the evidence), they’ll help you avoid the big mistakes, and will make you a better investor than 95% of the individual investors, and most of the pros, out there.

Good luck!

[Belezar]

“To the OP, I’d suggest NOT seeking or taking investment tips from this or any internet forum. “

In general I agree. And most posters seem to want a hot tip or the sure winner. No such thing. I see value in asking others some philosophy, which I tried to throw out there as an example. Everyone’s situation is unique though. What’s right for me won’t necessarily be good for someone else. Age is a big one. I’m young enough that principle protection, meaning growth at least equal to inflation is really important. At some age I won’t care.

A forum could be of value, but all I ever see post are speculators who want to talk about bitcoin or penny stocks. That’s not investing, but certainly you can make money if you’re lucky.

[Joli]

We did what we always do, continue to buy. There were some extremely attractive opportunities last March.

90% of our money is professionally managed, I manage 10%. I manage this because I enjoy it, performance wise it's a toss up. Generally I look for value companies trading below their long term P/E's then try to determine if there is a substantial reason for this or just market sentiment. Last year Whirlpool and Met Life did well, this year BMY looks promising. We hold stocks for a fairly long period.

[Clivevon]

Originally Posted by Joli

We did what we always do, continue to buy. There were some extremely attractive opportunities last March.

90% of our money is professionally managed, I manage 10%. I manage this because I enjoy it, performance wise it's a toss up. Generally I look for value companies trading below their long term P/E's then try to determine if there is a substantial reason for this or just market sentiment. Last year Whirlpool and Met Life did well, this year BMY looks promising. We hold stocks for a fairly long period.

Managing money because you enjoy it sounds like a very good reason & in that situation 90/10 sounds like an excellent split - have fun..

[MYTraveler]

New to the job market being fresh out of grad school, my daughter started investing a substantial portion of her income, mostly in S&P500, but also in individual stocks that appeal to her. She liquidated her S&P before the covid crash, when it was over 27,000, and bought back in at about 24000. She also purchased Peleton, and has resisted the urge to sell, even though it has more than tripled in value.

[sailorboy1]

Sometimes CF really cracks me up. Thanks