Gyroscopic Investing

barrett wrote:The PP is a difficult portfolio to hold as it contains three volatile assets. Just look at the angst on this board when bonds or gold are taking a drubbing. Most people hold stocks and shorter duration bonds and only ever worry about the stock market. Even then, they have plenty of company when stocks tank.

For the most part, the PP has to be something that people discover on their own after taking a beating investing in more conventional ways.

people doesn't search for lazy portfolios

probably only "stockmarket" strategies

even they think that active investing by banks is better

Frugal, sounds like your first battle is to enlighten your friends about passive vs. active investing. That's hard enough to do without adding the complication of the PP.

There are lots of resources for this - check the Bogleheads wiki, which may include some in your language, as well as Harry Browne's book "Why the Best-Laid Investment Plans Usually Go Wrong". That's a wonderful and thorough debunking of many active investing strategies, including ones being discussed on this forum. Some of that material is also in the radio shows, which are easy to take in.

One thing you could suggest to them is to buy an index fund alongside their stock holdings, and to compare the returns over time. I remember when I discovered that the index fund handily beat my stockpicking strategy - for which I'd been congratulating myself on its success. It was a watershed moment for me.

sophie wrote:Frugal, sounds like your first battle is to enlighten your friends about passive vs. active investing. That's hard enough to do without adding the complication of the PP.

There are lots of resources for this - check the Bogleheads wiki, which may include some in your language, as well as Harry Browne's book "Why the Best-Laid Investment Plans Usually Go Wrong". That's a wonderful and thorough debunking of many active investing strategies, including ones being discussed on this forum. Some of that material is also in the radio shows, which are easy to take in.

One thing you could suggest to them is to buy an index fund alongside their stock holdings, and to compare the returns over time. I remember when I discovered that the index fund handily beat my stockpicking strategy - for which I'd been congratulating myself on its success. It was a watershed moment for me.

Hi S!

People will ever believe more in the bank strategies than in me...

The most effective strategy, I've found, is to be secretive and mysterious about my investment style and strategy.

If the subject comes up, I'll say cryptic things like, "I do things a little differently, let's just say", "I'm unconventional," or, "I don't run with the herd" and leave it at that. If they take the bait and chase me, then I slowly dole out cookie clues until finally they back me into a corner and frustratingly demand that I tell them what my strategy is... at which point I introduce them formally to HBPP.

Ya, I'm basically an investment coquette.

blue_ruin17 wrote:The most effective strategy, I've found, is to be secretive and mysterious about my investment style and strategy.

If the subject comes up, I'll say cryptic things like, "I do things a little differently, let's just say", "I'm unconventional," or, "I don't run with the herd" and leave it at that. If they take the bait and chase me, then I slowly dole out cookie clues until finally they back me into a corner and frustratingly demand that I tell them what my strategy is... at which point I introduce them formally to HBPP.

Ya, I'm basically an investment coquette.

That is a good way.

And with your parents savings, what do you do?

Regards

I wrote to my brother-in-law about it once in the context of running it by him, letting him vet it for me rather than trying to convince him. He's more of a stock guy, an aggressive investor. (Turns out he's aggressive in general and has gone of the deep end, so if I ever stop posting here you should assume he wiped me out with the rest of my family. Ahem). He was turned off by a perceived limited upside.

farjean2 wrote:I would never try to convince anyone to use the HB-PP or any other portfolio. If things go wrong, I don't want to be responsible.

+1. I talk about the individual assets with certain friends and it seems that gold bugs can't be reigned in while non-gold investors are very hesitant about taking the plunge. I don't want to get someone into gold and then hear regular complaints about it not going up. "Are we there yet?" I hear that enough on this forum, haha.

And, dare I say it, I'm not fully convinced myself. If I were, I'd go full pp. I'm quite content having the "money I cannot afford to lose" in the pp. But, like a lot of people, I feel a strong compulsion to throw a lot of money into stocks just as soon as it crashes again. (I know, know. You don't need to tell me).

Very true that direct discussion won't accomplish nearly as much as a direct demo. Look what happened to me - I went through a pretty terrible loss after accepting the advice of a trusted broker, and even then it was a while before I finally forsook stock picking for good. My brother, for example, was convinced that his only real chance to get ahead financially was to win big by playing stocks. I opened a 529 account for his kids and set it for a passive investing strategy, then promised to match his contributions to it.

He watched the account grow over several years, during which time he continued playing stocks. Finally, he called me one day to say he'd had enough of the stock-picking game, could see it was never going to work and was taking too much of his time and attention that would be better spent growing his business, and could I help him switch to passive investing. Score!!!!