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This long article does yield some useful insights. Here is one I extracted from the article:
“The best policy for portfolio management is one of benign neglect,” said Christine Benz, director of personal finance at Morningstar. “Your portfolio is like a bar of soap — the more you handle it, the smaller it gets.”
I did recently suffer a medical condition that did demand immediate attention. Things worked out better than expected. I have much to be thankful for on this special day.
Well, I can’t argue with the premise that if you’re in the market for a LONG period, B&H has worked and should (we hope) continue to work.
The author says that “… a buy and hold strategy will put me ahead.”
Ahead? That’s it? Ahead?
Roughly 70% of the money that I earned in the stock market came from trading. I don’t suggest that people should trade. It’s just that I think that these articles are intended to make you feel less like a dope when the market is crashing and sucking away a sizeable amount of your hard-earned money.
Sure, if you have 20 or more years before you retire, you can watch as the bottom falls out and plan on buying at a lower price point – sometime in the future. But if you’re 50 or more, you must be aware of the sequence of returns. If you’re nearing or in retirement, and you don’t have a healthy fear of losing money, then you’re open to losing your money and kissing a secure retirement goodbye.
If you lose money when you’re 60, you haven’t merely lost money; you’ve lost your edge – edge being your money’s time value, which is all the income that your lost money could have generated.
When retirement is in sight, you’ve entered a new investment challenge. That challenge is the preservation of your money. So it’s primarily an age thing.
Comments
This long article does yield some useful insights. Here is one I extracted from the article:
“The best policy for portfolio management is one of benign neglect,” said Christine Benz, director of personal finance at Morningstar. “Your portfolio is like a bar of soap — the more you handle it, the smaller it gets.”
Great stuff summarized well.
Best Wishes to all.
Regards,
Ted
Yes, Hi, MJG, good to read you.
Thank you all for your gracious well wishes.
I did recently suffer a medical condition that did demand immediate attention. Things worked out better than expected. I have much to be thankful for on this special day.
Best Wishes to all.
The author says that “… a buy and hold strategy will put me ahead.”
Ahead? That’s it? Ahead?
Roughly 70% of the money that I earned in the stock market came from trading.
I don’t suggest that people should trade. It’s just that I think that these articles
are intended to make you feel less like a dope when the market is crashing and sucking away a sizeable amount of your hard-earned money.
Sure, if you have 20 or more years before you retire, you can watch as the bottom falls out and plan on buying at a lower price point – sometime in the future.
But if you’re 50 or more, you must be aware of the sequence of returns.
If you’re nearing or in retirement, and you don’t have a healthy fear of losing money, then you’re open to losing your money and kissing a secure retirement goodbye.
If you lose money when you’re 60, you haven’t merely lost money; you’ve lost
your edge – edge being your money’s time value, which is all the income that your lost money could have generated.
When retirement is in sight, you’ve entered a new investment challenge. That challenge is the preservation of your money. So it’s primarily an age thing.
Sequence of returns
https://www.thebalance.com/how-sequence-risk-affects-your-retirement-money-2388672
http://abovethecanopy.us/sequence-of-returns-biggest-risk-to-a-successful-retirement/
https://www.investopedia.com/terms/s/sequence-risk.asp
4-approaches-managing-sequence-returns-risk-retirement/
And,
Part 1:
theretirementcafe.com/2013/09/clarifying-sequence-of-returns-risk.html
Part 2:
theretirementcafe.com/2013/09/clarifying-sequence-of-returns-risk_20.html