Thursday, October 7, 2021

I Say "Invest Every Month." Have I Actually Done What I've Said?

TL;DR - no.  But I've tried.


If someone asks me what was the one thing I did right as an investor for the past 20+ years, it is that I have invested often.  Markets down, markets up; single, married; career going not-so-well, career going well; etc.  I would boil this invest-often philosophy into some expression like "invest at regularly scheduled intervals" or more simply "invest every month."  So here is the hypothetical follow-up question to be answered:  Have I actually done what I've said?


[As you can see, the title of this graph is "Number of Months Invested per Year" when a more correct title would be "Number of Months with Deposits per Year - Ignoring Withdrawals and Purchases funded by Sales."  I chose the former because it more clearly expresses the ability to save money to my investment account]


Recency bias strikes again.  From 2013-2020, "invest(ing) every month" was more or less true.  Before that, it seems more of an aspiration.  

Early in my career, I just didn't have extra money in most months.  2011 and 2012 were spent knocking out student loan debt (not the smartest choice, especially given market performance since).  In my best years I didn't hit 100%.  Even worse, there appears to be some correlation between market performance and number of months invested; the dreaded act of "timing the market." There is definitely some not-so-great, actually-quite-awful personal financing going on here for nearly two-thirds of my career.  Further data supporting here...


[Monetary amounts removed because 1) it's tacky and 2) in the context of this post, the amounts matter more in the relative sense]


In conclusion, "invest every month" is not the best advice.  Perhaps "invest what you can, when you can" is better, with the knowledge that approximately no one ever has regretted investing too much or starting too early.

Tuesday, October 5, 2021

An Updated Summary of My Grand Unified Theory of Investing

 Check out my previous post for how we landed here...




Account:

IRA

Roth IRA

Stocks & Income

Current percentage of total holdings:

~26%

~4%

~70%

Investment philosophy:

Jack Bogle

George Soros

Warren Buffett

Headline summary:

“Don't Do Something,
Just Stand There!”

“You Call That A Position?”

“Wonderful Companies at Fair Prices”

Account holdings:

• 55% indices (IWM, QQQJ, QQQM, VOO)
• 23% high-yield stocks (VIG, VYM)
• 22% high-yield bonds (HYLB, USHY)

• 100% one “high-conviction” stock (???)

• 55% stocks (2 core holdings + others, QQQJ, QQQM, TQQQ, UPRO, URTY)
• 8% index covered call ETFs (QYLD, RYLD, XYLD)
• 37% preferred stock/bond/ commodity ETFs (HYLB, PFFD, SLVO, USHY)

Are dividends
reinvested?

Yes

No

No

Investment schedule:

N/A

Asynchronous

Synchronous

When do I intend to make changes?

Never

When I have a higher-conviction bet than the existing one

Monthly purchases; "I believe in all of these stocks - until I sell them"

Is account actively
funded with new contributions?

No

No

No

Is account written about on this blog monthly / ever?

No

No

Yes