Market crash strategy: Cash, Bitcoin, land, deflation vs inflation

[mathjak107]

any system you stick to can work very well . the keyword being stick to .

the problem i see over and over and data proves is that those who go more conservative in hopes of staying put don't .

they just have lower trigger points of fear as any loss to their brains triggers poor investor behavior or they hate getting left behind in a run up . .

you can see this right in the investor returns in morningstar. rarely does the investor even achieve the fund return .

investors are very poor at matching money to time frames as well .

taking long term money and mitigating short term temporary dips with things like bonds while hurting long term returns permanently has little financial logic .

it reaches a point where even falling in these dips leaves you at higher balances than you would have trying to mitigate these dips .

as it has been said by peter lynch. more money is lost or given up in preparation for the next downturn than is lost in any downturn .

it is almost comical to see those with very conservative portfolio's high five each other because they did not get caught in the down turn . but they fail to consider they would have simply have fallen from a much higher cushion and still had a bigger balance being more aggressive .


it is like this year my fidelity insight conservative income model is down 1.30% ytd (25%) equities ... my growth and income model 60/40 is up .25% and the more aggressive growth model 100% equity is up 1.66% .

the more aggressive the model the more it fell but fell from higher gain levels .

looking at the last decade ,that growth model can fall 30-40 % and still be way a head of the conservative income model in balance .

so it really is important to consider the reasons we invest the way we do because in the end it is usually our investing that takes the bits and pieces we manage to save and compounds it in to a meaningful sum .

the investing should have financial logic and reasoning to it other than mitigating short term dips if short term money is not important .

[mathjak107]

except i run a 50/50 mix in retirement . we spin off all our short term money from it so my high risk days are long gone

[mathjak107]

mathjak, I love your high-risk passion. Seriously.

risk and volatility are two very different things .
the natural market cycles for a long term investor are volatile and owning diversified funds is volatile but has little risk .

risk comes when you try to pick individual stocks and are held captive to the whims of a particular company , or betting on the next google. risk comes from mis-matching investments and time frames .

there is very little risk in diversified funds over the long term . it just is volatile . volatility means little to long term investors .

like i said there is no data that shows that investors with lower pucker factors tend to stay any better in balanced funds . their bad investor behavior just seems to get triggered at lower levels .

the important thing is just find an allocation that meets your goals and run with it turning off the noise .

i never made a big salary so growing my assets via investing was a priority . volatility and not risk was just fine . now in retirement 40-60% equities meets my goals .

[boglerdude]

And when no one buys individual stocks anymore?

[mathjak107]

with individual stocks you add a layer of risk to just market volatility to worry about .

now you have to pick the right stock ,in the right sector at the right time in just the right market sentiment . even if you got that right you still have to worry about what their competitors have on the drawing board .

so yeah lots of people buy individual stocks , but unless you can buy enough of them to diversify away individual company risk you have added risk to your investing and not just dealing with volatility which is pretty much all we have had to deal with over typical accumulation or retirement times frames .

rebalancing standard balanced portfolios are just fine for creating spending cash . retirees have been generating income off balanced portfolio's forever . stocks will never be what gets sold in severe down markets , bonds will be what is sold. in fact you may find you are not only creating spending cash but having to buy stocks in a bad drop not selling them .