Rolling with it
There's this phrase I think of, when I think of the equities markets: Bomb Proof.
It can mean literally, resistant to bombs. Or it can be in reference to horses.
Apparently horses can be fairly edgy critters; they're herbavores, they're built to run, and run fast. Little sis has stories of horses that get anxious about a plastic bag, about wind in leaves, about rain on roofs, about squirrels. A decent number naturally get weirded out by almost anything, unless they're gotten used to stuff and to be calmer.
A bomb proof horse is one that won't freak out pretty much no matter what; fireworks could be going off, and they'll stay calm, or at least not panic.
I think I might be bomb proof when it comes to the markets at this point.
I started pretty young, so I've gone through both the Dot Com crash and the '08 Crash already without freaking out. The current turbulence in the markets is more exciting at this point than freaky to me.
A contingent of people tend to say "buy houses, because they're REAL things" or "people will always need houses to live in!"
People will always need places to live, but they'll also need food and things like shoes. Buying bits of companies that produce food, medicine, clothing, stuff like that... it's really the same rough idea as buying houses to me.
Buying a share is buying a tiny ownership in real things; in factories, in inventory and employees, who make things that people need. As a bonus, companies are mobile, unlike houses. If a company figures the waters are too choppy, they can move to another state or change direction; they're flexible that way, they're not entirely tied to a micro economy in a specifc area.
Intriguingly, my stuff is doing pretty well too. Since I buy volatile things, supposedly they should fall harder than average. But so far they seem to be doing pretty well. I'm beating the Dow by 10.4%, the S&P500 by 7.0%, and the NASDAQ by 3.4% YTD as of Friday. 'Course that's not saying too much since the Dow especially is pretty negative right now; it mostly means my stuff is still positive, while the others have gone negative for the year. That's fine though, my ambition is to beat the indices on average, even if it's only by a percent or two. I'm not looking for wild returns, just a bit more than average.
I just can't logically accept I should settle for flat average returns by using only broad spectrum index funds. There are some real stinkers in those averages. There are some companies that are really solid financially, and that get through recessions in good order, stronger than ever. Of course I need to take into account how slowly news travels to me, and the fact that there might be some Enrons mixed in. But with a long term buy and hold of quality companies, I assess that I should come out ahead vs. buying absolutely everything under the sun no matter how good or terrible the stuff mixed in is.
Guess we'll see how the strategy pans out over decades, but looking good in the experiment so far :)
It can mean literally, resistant to bombs. Or it can be in reference to horses.
Apparently horses can be fairly edgy critters; they're herbavores, they're built to run, and run fast. Little sis has stories of horses that get anxious about a plastic bag, about wind in leaves, about rain on roofs, about squirrels. A decent number naturally get weirded out by almost anything, unless they're gotten used to stuff and to be calmer.
A bomb proof horse is one that won't freak out pretty much no matter what; fireworks could be going off, and they'll stay calm, or at least not panic.
I think I might be bomb proof when it comes to the markets at this point.
I started pretty young, so I've gone through both the Dot Com crash and the '08 Crash already without freaking out. The current turbulence in the markets is more exciting at this point than freaky to me.
A contingent of people tend to say "buy houses, because they're REAL things" or "people will always need houses to live in!"
People will always need places to live, but they'll also need food and things like shoes. Buying bits of companies that produce food, medicine, clothing, stuff like that... it's really the same rough idea as buying houses to me.
Buying a share is buying a tiny ownership in real things; in factories, in inventory and employees, who make things that people need. As a bonus, companies are mobile, unlike houses. If a company figures the waters are too choppy, they can move to another state or change direction; they're flexible that way, they're not entirely tied to a micro economy in a specifc area.
Intriguingly, my stuff is doing pretty well too. Since I buy volatile things, supposedly they should fall harder than average. But so far they seem to be doing pretty well. I'm beating the Dow by 10.4%, the S&P500 by 7.0%, and the NASDAQ by 3.4% YTD as of Friday. 'Course that's not saying too much since the Dow especially is pretty negative right now; it mostly means my stuff is still positive, while the others have gone negative for the year. That's fine though, my ambition is to beat the indices on average, even if it's only by a percent or two. I'm not looking for wild returns, just a bit more than average.
I just can't logically accept I should settle for flat average returns by using only broad spectrum index funds. There are some real stinkers in those averages. There are some companies that are really solid financially, and that get through recessions in good order, stronger than ever. Of course I need to take into account how slowly news travels to me, and the fact that there might be some Enrons mixed in. But with a long term buy and hold of quality companies, I assess that I should come out ahead vs. buying absolutely everything under the sun no matter how good or terrible the stuff mixed in is.
Guess we'll see how the strategy pans out over decades, but looking good in the experiment so far :)