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My investing strategy is closely aligned with the game of darts. Aim and hope my picks land in the right place. Does it work?
I make no claim to investing acumen. However, I am proof that even those who know little of what they are doing with no patience for nitty gritty analysis can make money.
Since all my investments are with Fidelity I used their analysis of my account to evaluate where my darts landed. Here is what I recently discovered.
“63% of your selected accounts are invested in stocks, which resembles a Growth with Income portfolio.” That’s what I was aiming for – I think.🤔
“We looked at how bonds in these accounts are spread across two key indicators – duration and credit quality – to determine the style of those holdings. We then compared this style to the Bloomberg Barclays U.S. Aggregate Bond Index. As of today, the style of those identifiable holdings looks to be aligned with that index.”
“We looked at how the identifiable stocks in these accounts are spread across two key indicators – market capitalization (Small, Large or Mid-sized) and valuation style (Growth, Value or Blend) to determine the overall style of those holdings. We then compared this style to a widely followed benchmark – the Dow Jones U.S. Total Market Index. As of today, the style of those holdings looks to be aligned with that index.” (They also noted nearly 20% of my holdings are one utility stock – because it nearly doubled in price since I retired).
WOW! I’m aligned. What does it all mean?
I have no clue, except my account balances have increased 31% in the last 12 months. According to Barron’s the 12-month change in the S&P 500 as of 8/30/24 was 25.08%. My numbers include reinvested dividends, interest and capital gains.
Still, not too shabby – or could I have done better if I knew what I was doing or perhaps used a spreadsheet 😃
I occasionally drive myself nuts tracking my account daily. Here is what happened to my investments last week.
Monday 8/26. down $8,073.10 😱
Tuesday. down $1,426.71 😱
Wednesday. down $12,013.57 😱
Thursday. down $1,738.83 😱
Friday 8/30. up $16,550.48 🤑
Is there any logic to it all? Perhaps. Here are some events last week that were mentioned in connection with the markets.
Nvidia—Consumer confidence up—Israel attacks Hezbollah–Last week of summer—Waiting for interest rate cuts—Oil production cut in one country–Economy expands 3% stronger pace in second quarter
I’ll leave you to do the analysis. I’m off to the beach.
I have always appreciated and agreed with your simplistic approach to “having enough” by covering your expenses in retirement. I have a question that I would like your input.
My wife of almost 48 years recently retired and I plan to at the end of this calendar year. We will have our expenses covered completely by our two S.S. checks and three pension checks. All of our retirement accounts (two Roth and two Traditional IRA’s) are divided 50/50 in VTI and VUG. We have $300k of our monies in these, 30k in an HSA, and $90k in cash.
Do you see any reason why we would need bonds in our portfolio?
Maybe for long term care?
Good point.
I’d like to help, but I’m really not qualified to recommend investments. All I can say is we are in a similar situation in that my pension and our SS cover all our spending, necessary and discretionary.
Currently we have 29% of all investments in bond funds. Is that right or wrong, I’m not sure, but I do it so that if and when necessary I can turn off reinvested interest and generate more monthly (mostly tax-free) income. After 14 years retired that has not happened yet.
Why is your post locked? I can’t reply to it.
To answer the question, I don’t “pick and choose” investments, or not since I set my asset allocation and started investing in index mutual funds years ago. I have adjusted my asset allocation in a more conservative direction over time. Benign neglect and the magic of compounding have worked well for me – not that I often look at my portfolio.
Many years ago Money magazine working with a group of forensics asked 7 or 8 folks what there 10-15 year average return was–they agreed to sit with a forensic once they submitted their % to be sure they were being accurate. As you can guess they had no real numbers to back up their very healthy return. Buying and selling was their downfall.
One guy from Boca Raton met them at his front door and said he really had no firm idea of his average total return but he had assets to pay cash for their home–play golf daily–vacation just about anywhere–and basically do whatever they wanted.
Like him I guess I give a rat’s rear end whether I am “aligned” or not–do I care what the S&P did and whether I kept up or not–NO! After 55 years if investing I have financial control of our lives.
Maybe twice a year I check the funds we have been investing with for decades, and still do, to see what the value is. Does brother Quinn actually check daily to see gain/loss? YIKES!!! I guess different strokes for different folks.
Yikes is right. It’s a habit I can’t break, but I don’t do any trading. Bad news, investments down $36,000 today. Can’t wait to look tomorrow 🤑
Still wondering about investing strategies? How do you pick and change your investments?
Only one thing jumps out to me, and that’s that hopefully you’re not reinvesting dividends in that one stock.
One could wonder about a few other things that might warrant looking at a little more closely, like whether your growth v value or large v small cap balances are also “aligned” with the market or deviate in some way, intentionally or not (no spreadsheet needed to find out).
Otherwise I agree that’s enough analysis. Enjoy the beach.
Edit: I just looked back and saw that Fidelity did the above analysis and you’re aligned, so assuming that’s what you want, you can stay at the beach longer.
Yup, been reinvesting those dividends for more than 40 years and still do. They have been paying dividends for over well 100 years. The company is my old employer and most of the shares were part of my compensation.
Since they pay my pension I’m afraid if a sell or stop reinvesting the hold fund will collapse 😎😃