No. of Recommendations: 6
I guess some people really want to talk about investing on Christmas Day :)
Mark19 asked:
Why do you preach simple dollar cost averaging, while in practice, you use very sophisticated techniques?
What I've said is that I advocate DCA'ing into index ETFs for people in their wealth building years. That means people with jobs and 401K plans who have not yet hit their financial independence number. The typical US 401K plan does not give you the option to invest in individual stocks. But all of them let you allocate a fixed percentage of your paycheck to an S&P 500 fund or ETF.
I always lived below my means, and max'ed out my 401K contributions during my working years. So I have a big chunk of my portfolio in a Vanguard 500 fund and SPY. Best way for the vast majority of people to hit their retirement number is to use that strategy to let their wealth compound tax deferred.
After gaining some years of experience in passive investing, I discovered the world of stock screens and MI in the mid-90s with the advent of Jon Markman's Online Investing book, MSN Money Central, and this board. So I augmented my 401K plan investing with MI investing starting in 1996. I did both types of investing until I retired early in 2020. The portion of my portfolio that I managed myself grew beyond my wildest expectations.
The main ingredient for success in investing is your temperament, not your intellect. You may love investing, but there will be months on end when investing won't love you back. You should have other hobbies during those months. Having a system and plan that you can stick to is much more important than having a prediction about the future direction of the market.
Now, if you'll excuse me, I have a Christmas pajama party to get back to. It was my daughter's idea to have us all dress up in matching plaid pajamas, including the dogs, while opening our presents. I look ridiculous (and so do the dogs), but I'm going along with it.
Mechinv
