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Depressed

Posted: Mon Dec 14, 2015 11:36 am
by buddtholomew
Nothing left to say. I don't understand my investments anymore. Gold and LTT's hammered again. What did I do wrong?

Re: Depressed

Posted: Mon Dec 14, 2015 11:42 am
by Reub
Hang in there, budd! Climb back in off of the ledge. Confess all of your sins and just come back to the vanilla PP. Just don't look for a month or so and all will be fine. Promise!

Re: Depressed

Posted: Mon Dec 14, 2015 11:43 am
by koekebakker
The PP's low correlations tend to play out rather well over longer time periods. On any given day anything can and will happen. Nothing to worry about!

Re: Depressed

Posted: Mon Dec 14, 2015 11:46 am
by buddtholomew
Thanks guys...just struggling here...

Re: Depressed

Posted: Mon Dec 14, 2015 11:54 am
by Alanw
It will be very interesting to see what happens Wednesday especially with LTT's.

Re: Depressed

Posted: Mon Dec 14, 2015 11:57 am
by jafs
I'd say if you really don't understand why you're invested the way you are, it's worth considering a different plan, one that you do understand and are more comfortable with over time.

Re: Depressed

Posted: Mon Dec 14, 2015 11:59 am
by Cortopassi
I feel the same way Budd.  Finally felt like I was doing the right thing for the first time in 25 years starting in 2014 with the PP.  Yet for my entry point in 2014 to where we are now, virtually 2 years of exactly nowhere...

I know 100% it would have been worse doing what I was doing, but that is little consolation as I get another year closer to retirement!

If MG ends up being right about long term crappy low returns on all assets, we are all screwed to some extent unless you can sock away a few million and expect no return.

Re: Depressed

Posted: Mon Dec 14, 2015 12:19 pm
by buddtholomew
jafs wrote: I'd say if you really don't understand why you're invested the way you are, it's worth considering a different plan, one that you do understand and are more comfortable with over time.
That's generally good advice, but how does it apply to an investor that is diversified across all asset classes?

Re: Depressed

Posted: Mon Dec 14, 2015 12:25 pm
by Reub
MG would probably recommend more Magnesium or SOD but I'll just say hang in there with your diversified PP and you'll be fine. Sleep well my friend!

Re: Depressed

Posted: Mon Dec 14, 2015 12:28 pm
by Pointedstick
buddtholomew wrote:
jafs wrote: I'd say if you really don't understand why you're invested the way you are, it's worth considering a different plan, one that you do understand and are more comfortable with over time.
That's generally good advice, but how does it apply to an investor that is diversified across all asset classes?
Take consolation in the fact that pretty much nobody is doing better, I guess. It's a challenging time for passive investors right now. There is no shame in being down a bit when there are few gains to be had anywhere.

Re: Depressed

Posted: Mon Dec 14, 2015 12:33 pm
by jafs
I don't know about specifics.

But there are lots of other possibilities for investment, some of which might be more understandable for you.

Re: Depressed

Posted: Mon Dec 14, 2015 12:38 pm
by Cortopassi
Budd, all:

I've always been interested in protecting my holdings by buying married puts at the same time.  If you don't know what that term is, please look it up.

I wonder about the potential of holding the stock PP and then, based off the Ivy 10 month moving averages, instead of being either completely in or out of an asset you simply either hold or don't hold puts equivalent to their value?

For example, say you've got 100k in GLD and according to the 10 month MA, you are in a "sell" state.  but instead of selling, you buy puts that are 1 month out.  Right now, GLD is about 102.00.  A 102 strike put with an expiration of Jan 15, 2016 (1 month out) is $2.15.  Each put covers 100 shares.  100k of GLD corresponds to about 980 shares, round to 1k shares.  You'd need 10 puts at $215 each to cover that, or $2150.00.

$2150/month protection for $100k of GLD --- this sort of number is what always prevented me from spending for the "insurance" of married puts.  You can go every 3 months instead, March calls are $3.50 for the same strike so you'd spend $3500 for 3 months of downside protection.  Still a lot for something that can expire worthless.

If gold goes up or stays flat, the options would expire worthless (but you participated in gains you would not have at least per Ivy because you would have been out).  If GLD goes down, you'll have basically 1:1 protection on your holdings and lose very little, effectively averaging down your price.

You can also do a % of your total holdings and not 100% to save cash outlay.

Has anyone ever effectively implemented this or have any thoughts?  It's always AFTER the fact that I wish I did it.  There are many instances where it would have saved my ass, but I have to balance that with how much would have also expired worthless along the way.