My portfolio mirrors Vanguards life strategy growth fund VASGX. It's asset allocation is 80% equities, 20% fixed income. The stock portion is 60% US and 40% international. I figure Vanguard is smarter than me so my default position is to follow Vanguard. I can't use the same VG funds because of embedded capital gains in a taxable account. However, I did make one "market timing" trade. A few months ago, I bought an SPX put spread that extended for two years. This protected me for a 20% drop in the market. I got lucky and doubled my money and rolled down my spread. I still have a spread on but at this point at no cost. I calculate that the spread costs me about 2% per year. I would rather trim my upside by 2% than risk a 20% loss. If the market rallies 10%, I will roll up the spread gambling that sometime in the next two there could be a signficant loss. If I hit the 20% downturn, I plan to close out the spread and use the profits to add to my asset allocation in the proportions adopted by VASGX. Part of the reason for my strategy is loss aversion. I am 72 and want to avoid the risk of adverse sequence of returns.
I worked hard my hold life and made a lot of money. Always lived below my means. Now have a sizeable estate. Decided when I hit 70 to start giving it away. Never have been a "happy person" as such. Stoic by nature and not a member of any organized superstition. However, I do subscribe to the saying, "Be kind to all creatures. That is the one true religion." So I work at trying to be kind-- not natural for a gruff old guy. But giving back makes me feel impactful which was always important to me.
I am surprised that you did not mention the Kelly Criterion. From Wikipedia: "the Kelly criterion leads to higher wealth than any other strategy in the long run."
Comments
My portfolio mirrors Vanguards life strategy growth fund VASGX. It's asset allocation is 80% equities, 20% fixed income. The stock portion is 60% US and 40% international. I figure Vanguard is smarter than me so my default position is to follow Vanguard. I can't use the same VG funds because of embedded capital gains in a taxable account. However, I did make one "market timing" trade. A few months ago, I bought an SPX put spread that extended for two years. This protected me for a 20% drop in the market. I got lucky and doubled my money and rolled down my spread. I still have a spread on but at this point at no cost. I calculate that the spread costs me about 2% per year. I would rather trim my upside by 2% than risk a 20% loss. If the market rallies 10%, I will roll up the spread gambling that sometime in the next two there could be a signficant loss. If I hit the 20% downturn, I plan to close out the spread and use the profits to add to my asset allocation in the proportions adopted by VASGX. Part of the reason for my strategy is loss aversion. I am 72 and want to avoid the risk of adverse sequence of returns.
Post: Ch-Ch-Changes?
Link to comment from May 10, 2025
I worked hard my hold life and made a lot of money. Always lived below my means. Now have a sizeable estate. Decided when I hit 70 to start giving it away. Never have been a "happy person" as such. Stoic by nature and not a member of any organized superstition. However, I do subscribe to the saying, "Be kind to all creatures. That is the one true religion." So I work at trying to be kind-- not natural for a gruff old guy. But giving back makes me feel impactful which was always important to me.
Post: Ask Me a Tough One
Link to comment from April 19, 2025
I am surprised that you did not mention the Kelly Criterion. From Wikipedia: "the Kelly criterion leads to higher wealth than any other strategy in the long run."
Post: Flipping Out
Link to comment from November 11, 2023