How many market timers go back in at 5,000 – and how many are still waiting?
Glad I avoided the churn and capital gains taxes of selling – Long-Term Buy & Hold.
intercst
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I went back in, Glad you long term buy and holders took the hit so we could make money off the falacy. We are still not back to the all time highs that we hit in the market which would be 6147.43.
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::chuckle::
I’ve made enough in the past three weeks that I can retire a year earlier than planned.
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That’s great, but how many market timers have done the same ???
intercst
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I didn’t take a “hit”. I saved the 20%+ capital gains tax I would have paid trading in and out.
I could have retired several times over on the “skim” and taxes I haven’t had to pay in the past 30 years.
But there’s no secret to it. It’s just arithmetic.
intercst
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I never paid a single capital gains tax getting out and back in. That is where the skim is completely taken out. It’s wonderful not having to pay those pesky capital gains. Look at this. You said you own the index’s. They still haven’t made it back.
You say you own CSCO. It still hasn’t made it back.
You say you own LLY. Ouch that still hasn’t made it back.
So just where is your out performance? Because it sure isn’t in your portfolio.
It’s just arithmetic.
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Well at least 2 lol. 
Sure, if you’re holding it in an IRA. But then you’re paying ordinary income tax when you withdraw the money during your lifetime, and give up the stepped up cost basis at death.
At this point, I have about 80% of my equity holdings in a taxable account. Roth IRA is only about 10%.
intercst
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It doesn’t have to. They’re both 95%+ unrealized capital gains for me, and they’re paying a dividend.
How long has Buffett owned Coca-Cola without churning in and out of it?
intercst
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You keep talking about stepped up cost basis at death. You have no children, no wife. Who cares.
I have all my wealth in my home, Ira and Roth Ira. Roth Ira’s are the best. This is the best way to keep from losing money on deep downturns.
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You haven’t lost it until you sell. And most people replace their stock sales with something that performs worse. Goldman Sachs and JPMorgan love amateur market timers. That’s why they’re paying Vanguard and Fidelity a large enough fee to capture the trading volume so that Vanguard and Fidelity can offer you free commissions on trades.
Maybe you and Hawkwin are doing well, but most aren’t.
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Oh you have lost it and just like your Csco it may never come back. There is also opportunity loss. People that do not understand the market tell themselves they haven’t lost till they sell to make themselves feel better about their lost. It’s all about risk and reward. Once you understand the risk, you can figure out the reward.
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LOL ok do the math on that.
Right. My cost basis in LLY is $21,000 on a 7-figure position and I’ve been spending the dividend income over the years rather than reinvesting it.
I think we’re going to need to come up with some new kind of math to calculate a loss. {{ LOL }}
intercst
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Your dividend is .82%, That is crazy you would think that is good. You can get a bond that pays much more than that and it is way less than inflation. On a million dollars that is $8200. Well done, you can buy yourself a third of a Tesla.
You’re missing the $21,000 growing to $1 MM +, and of course, the dividend was a lot higher when the stock was lower 20 or 30 years ago.
Vanguard tells me that my portfolio withdrawals over the past 10 years have averaged to an annual 0.3% of assets, so a 0.82% dividend is pretty healthy.
Of course, I’m not a dividend investor and only pay attention to the portfolio growth over time.
That’s the magic of Long-Term Buy & Hold.
intercst
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I thought you said you were an index investor and now you are bragging about investing in a single stock? The dividend could have been higher 20 or 30 years ago but dividends are usually paid out when a company has no place to put the money so I suspect it wasn’t even paying a dividend.
I don’t think you know what type of investor you are, dividend, growth, index? You can’t claim any of them because you keep hopping from one discipline to the other. Pick a lane, your old enough now to have figured this out.
I’m a long-term, buy & hold investor. When I first started investing in 1981, I bought individual stocks because mutual funds had much higher fees at the time and my laser focus is on "minimizing the “skim”. Over the past four decades, index fund expenses have dropped to near zero, so there’s no need to select individual stocks today. You can become wealthy enough with just an index fund. And I’ve been matching the sale of winners and losers over the past 20 years to move money to index funds when I can do so without taking a tax hit. About 30% of my assets are in indexes today with another 10% in BRK ( which I regard as an index fund that’s not paying me an annual distribution.)
If you’re a successful long-term buy and hold investor, you eventually run out of losers to match with winners, and have a portfolio of mostly unrealized capital gains and a small tax-paid cost basis.
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I realize there are many ways to gain wealth but for you to tell someone to just invest in index funds and hold long term is disengenous. Sure it works but you will always be a mediocre investor. There are many of us that have learned that buy and hold is a system that people throw out there because they either do not like investing or are lazy. That is fine, but do not try to tell me that is the best way or you never would have invested in single stocks, I don’t care what the fees were.
Right now I could buy the index and beat you this year. You are already below the S&P500 and the Nasdaq. Beating someone that invest in index funds by 1% a year I think we both can agree is huge. So please stop the nonsense that Timing does not work.
If I’m matching the S&P 500 over decades, I’m beating 95% of professional mutual fund managers and some larger percentage of individual investors selecting stocks or market timing. (Unless you believe that a large number of individual investors are beating Goldman Sachs at their game.)
Anytime you rank at the 95th percentile of an activity, you’re not mediocre. And if you can attain that level of performance by merely buying & holding an index (basically doing nothing), and there’s a 95%+ chance of failing to match (or beat) the S&P 500 index if you’re doing anything else in terms of investing, it’s just nuts to take the risk. Index fund investors are getting a free lunch.
intercst
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