Throwing in the towel again...
Posted: Fri Dec 18, 2015 1:50 pm
About this time last year, I threw in the towel and started a PP. You may be thinking, "Are you quitting the PP?" No way. Although it has been a lackluster year for the PP and everyone is lamenting over the prospects of cash, stocks, LT bonds and gold for the future, I have learned something about myself: I am a passive investor. ETFs are the way to go for me.
I was subscribed to an advisory service that picks dividend-paying stocks. I got pummeled on some common and preferred stocks related to oil and gas. It hit me-No one can predict the market or pick winning sectors or winning stocks. Sure, in a bull market everyone is a genius. I reviewed the portfolios Tyler highlighted and decided to go with two: the Ivy Portfolio and Swedroe's Minimize Fat Tails Portfolio. I realized that I am much calmer and I'm not worried about the performance of individual stocks. That's a great relief for me.
I do have a portfolio of penny stocks that I use for mad money. It's a lot of fun and I practice risk management disciplines.
Everyone likes to think he/she is smarter than the next investor. But the truth is: he/she is not. I'll take the passive approach to investing any day over trying to beat the market by actively picking stocks or market timing or tactical asset allocation.
I have come to terms with my investing limitations and I am taking a humble approach: Passive Investing (ETFs) with rebalancing of the portfolio.
Michael
I was subscribed to an advisory service that picks dividend-paying stocks. I got pummeled on some common and preferred stocks related to oil and gas. It hit me-No one can predict the market or pick winning sectors or winning stocks. Sure, in a bull market everyone is a genius. I reviewed the portfolios Tyler highlighted and decided to go with two: the Ivy Portfolio and Swedroe's Minimize Fat Tails Portfolio. I realized that I am much calmer and I'm not worried about the performance of individual stocks. That's a great relief for me.
I do have a portfolio of penny stocks that I use for mad money. It's a lot of fun and I practice risk management disciplines.
Everyone likes to think he/she is smarter than the next investor. But the truth is: he/she is not. I'll take the passive approach to investing any day over trying to beat the market by actively picking stocks or market timing or tactical asset allocation.
I have come to terms with my investing limitations and I am taking a humble approach: Passive Investing (ETFs) with rebalancing of the portfolio.
Michael
Letting go sometimes comes in stages. 