Thoughts on my investment Strategy

So you want to hear something funny. Even though I am here talking about the little wins with buying on dips. Looking at what I had just bought in these last 2 dips and the price I sold the same units in the same funds only a few months ago. I am buying back in exactly what I sold a few months ago but at a slightly higher price. And I missed at least 1 or 2 dividend distributions.

So I am going to make myself write lines as punishment just like we did back in school.
I MUST NEVER SELL SHARES THAT I INTEND TO BUY BACK IN AGAIN WITH THE INTENTION TO TIME THE MARKET.

 

Look at it this way. I am doing this for the good of all the other members and future members of PC. I am making the mistakes to teach you all a lesson in how not to invest.

You are watching a real life version of how timing the market doesn’t work without having to use your own capital.

The things I do for you guys.

 

Who needs a financial adviser when you can start a PropertyChat thread and get 500 replies?

 

I agree. I said this before. I have learnt more from this place and its wonderful members than any other person or source. And hopefully at the same time sharing my experience and journey is helping others learn along the way.

I know I am not the only crazy one on here fumbling my way through this investment maze. I have had a few members message me saying they are in a similar situation and asking themselves the same questions. And the funny thing is they ask me for my opinion and what I am planning on doing next. I barely know what I am doing at the best of times, but I find others just like myself feel more comfortable making a move or a decision on something if there are others doing it with them.

I am humbled that others seek my opinion and thoughts, as I don't consider myself that switched on with this investment stuff. But I do what I can to help as I feel others here have and are continuing to do that for me. At a minimum I can return that goodwill to someone else with the best of my ability and knowledge.

Ok I will stop now, cause I am getting emotional. There is so much love in this place.

 

Just in case anyone reading my previous post is thinking this guy is a weirdo . The last part was meant to be funny. I am really not sitting here writing this with tears rolling down my face.

 

If it helps Big A once you have most of your spare cash invested in equities it becomes so much easier as the ups and downs of the market don't really matter any more. I know it sounds strange, but as many wise heads have said on here its true.
The only house keeping required is when dividends arrive in your bank account and any spare cash is spent straight away to buy more equities to keep your asset allocation % in check.
How simple is that !

 

Thank you @Burgs . As i invest more of the cash and the pile shrinks I am thinking about it less. I don’t tend to overthink when buying smaller monthly lots.
The only thing for me is my working income doesn’t trickle in weekly. It’s normally larger sums every quarter. So I will always have a lump sum of sorts to deploy.
But I am slowly getting more comfortable with the process.

 

I'm waiting for some of my holdings to take pity on me and give me some!

 

Thanks for taking my post in the spirit it was intended and not getting offended.

What you are doing is not 'good' active either. If you want to be active you need even more knowledge, research, and adherence to a plan then passive as the game is zero sum less costs and that makes it even harder.

There is nothing wrong with active – just don’t confuse skilful active with punting.

If you have no substance to back up your active it is gambling. And @orangestreet point becomes very pertinent, the worst thing that can happen to a gambler playing without the odds in their favour is early wins.

Getting in and staying in a low cost diversified exposure is pretty much all you have to do as equity risk premium compounded over the long term is so powerful. If buying dips really helps you pull the trigger – decide your rules pull down some data and see what the cost of that entry method "for your circumstances" really is. You might be happy with it – you might change your thinking. Either way you will be informed rather than punting and you will be much more comfortable in waiting for ‘your’ signal to act. What does history tell you about those 10% steps for capital deployment that you have in place. If you don’t at least know what history indicates about you plan and possibly opportunity costs of waiting – do you have a robust active plan or just a guideline for gambling?

You can be an average passive investor and do well over your lifetime – Actually, that is what you aspiring to do as a passive investor, be average. You can’t be an average active investor unless your happy getting your arse handed to you when luck does not favour you.

I'll leave you in peace now, again no offence intended in this post.
May your future income stream maintain many toys - oh and your family in good health.

 

Thank you @dunno . Can’t get offended when I’m being offered great insights and shared knowledge. Some might see the feedback as harsh but at the end of the day a little bluntness and being direct is the only way to get the message across sometimes.

I know am I best served with a simple passive style strategy. While I have learnt heaps in the last year I have barely scratched the surface to be a successful active investor. I would more than likely hinder my long term outcome and as you said it would be more gambling than investing.

While I still have a few psychological and behavioural hurdles to jump I feel like I have come a long way. I did put in part of the lump sum without waiting for the so called correction and yesterday I went ahead with the monthly buy in. 2 days behind the original first of the month plan but close enough for now. Maybe next month I will get that one spot on.

 

Not even then mate. I’m hardcore passive. All equities are set to DRP.
Actually that’s excluding the 3 individual shareholding’s. 2 being property trusts which I don’t need any more of. Especially when the listed ones are trading well above NTA. Then there’s a small holding in Telstra, which I thought I was smart and bought after a significant drop almost 2 years ago. Then it kept dropping. Only put $20k into it so have just left it be.

 

It's ok to express your feelings @Big A, this is a safe space

 

Why thank you @Isla_Nublar .

 

Update for those interested.

Looking at putting in the next lump sum within the next few weeks at most. This lump sum will be most of the spare cash left at the moment. Will leave a small amount for now as I am expecting a handsome income tax bill early next year.

So I have finally come around and given up on the market strategy. From here I am all in all the time. Rather than occupying myself on when to buy I will focus on bringing in the money to invest.
For me this last week was the last straw. While I still think the market could turn down some time soon, I see no immediate catalyst for it. Up until this last week I saw the trade deadline as a real threat and reason for the markets to turn. But that has not happened and that threat is neutralised for now anyway. That being the case I have no reason to be sitting and waiting. I was never really waiting for a general downturn. For me I saw an immediate threat that could do some damage and that concerned me. As that has not eventuated I see no reason to wait any longer. I was never trying to time the general market cycle of up and down.

While the trade racket could return I cant see trump doing anything sillier than he has already done coming into an election year. So I am expecting more of the same from the market. And that I am ok with. If I had to make a prediction I think the next 12 months will be the same sideways action as most of this year. With a few swings either way here and there. I see that as a good year for accumulating.

With all that I am still uneasy with where the US market is sitting right now. The US index is sitting fairly high. So I am considering still having a tilt towards active international right now over VGS. I will still allocate to VGS but split it with something like Magellan Global fund which has been performing strongly for the last few years. With Aus I am a little more comfortable with where the index is sitting. So with this next lump sum I will pretty much be sitting even between active and passive in Aus holdings.

I think its been a pretty good year and I am happy with where my portfolio has landed at the end of this 12 months exploration. Its been a great learning year and I feel like I understand myself and investing much better than I did this time last year.

Thank you to everyone who has contributed to my journey over the last 12 months. I wish you all a Very Merry Christmas and a Happy & Safe New Year.

 

All sounds good Big A , must feel liberating to have made your investment choices that you are comfortable with which is a big win. Great way to start 2020 well done.
Interesting that you are looking at Magellan Global Equities Fund, the management fee of 1.35% plus performance fee would scare most of the passive investors away.
Is there a chart showing the performance of MGE (fees deducted) compared to the benchmark MSCI World Net Total Return Index ? I think that would give a clear indication if it is worth investing in it. Need to check fund turn over as well.
Funny they are calling it an active ETF must be for marketing purposes?

 

So no longer are you wallowing in the quagmire of your own indecision @Big A?

Good to know if that is the case.

My concise decision (car service) cost me money with brake pads and tyres. Back on the cheapo instant coffee (Maccona) for me until mid-January. Hold on. I put that back into the market. Instant it is then. Ain't got no working coffee grinder anyways.

And in accordance with @Big A, best of the Season to youse all. Take care if you're on the road, especially so as I will be tomorrow on the way to Melbourne.

CYAs in the New Year.

 

We've been going through a very similar process. And I too looked long and hard at Magellan rather than boring old indices. Their chart is so cool! But if you feel (as I do) that the US market is nervously peaky, the peakiest peak is tech. And bold tech plays is how Magellan has produced such peak-tacular graphs.

There was an interesting link here a while back featuring Platinum (value) and Magellan (growth)

Platinum and Magellan: Inside the minds of Australia’s most successful global investors

You couldn't get more contrary views about what to invest in. Obviously Magellan has been the big winner in recent years, but because of that they are possibly also the biggest risk.

That's why I went, in the end, for a boring old Vanguard index (albeit with a bit of VVLY value tilt) and bond mix.

I don't need my investments to go up by 40% in year (although it would nice). More important is minimising the immediate damage from any such drop.

 

Global Market Outlook | Russell Investments

2020 outlook..

 

@Burgs

Looks like a good fit for an active ETF

Magellan’s Global Equities strategy offers investors the opportunity to invest in a specialised and focused global equity portfolio. The Global Equities strategy’s investment objective is to achieve attractive risk-adjusted returns over the medium to long term while reducing the risk of a permanent capital loss. To achieve this, Magellan undertakes rigorous company research to identify what it assesses to be high-quality companies with enduring competitive advantages. This, combined with an assessment of the macroeconomic environment and a disciplined risk-controlled approach to portfolio construction, results in a focused portfolio of high-quality global equity stocks.

The Global Equities strategy is available in listed and unlisted form and where foreign currency exposures are hedged, unhedged or at the discretion of the manager.

 

“Intend” being the appropriate word. I intend to win lotta next week. About the same odds. Mind you the odds might improve a tiny bit if I ever actually purchased a lotta ticket.