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Old 2nd January 2021, 09:12 PM   #961
TragicMonkey
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Originally Posted by The Atheist View Post
When it occurs, yes, things will improve, but it won't be a magic wand, especially for those at the bottom.
I don't remember claiming anything would be "a magic wand" for anybody, much less the bottoms. But I'm glad you recognize that things will improve, which means this is not a permanent state of affairs but rather a temporary storm to be weathered.
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Old 9th January 2021, 01:51 AM   #962
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This month's update on my stocks and shares ISA.

Date% +/-Date% +/-
5.181.37.207.8
8.183.48.208.1
11.18-3.19.207.9
2.19-0.810.209.9
5.191.911.2012.6
8.197.412.2015.1
11.196.61.2118.7
2.2010.3  
3.203.7  
4.20-4.9  
5.200.3  
6.205.8  

A reminder of the context: I have been saving £300 a month since May 2017, choosing a fund to invest in each month. I have so far invested a total of £13500 in a dozen different funds; the current value of my investments is £16025.
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Old 9th January 2021, 09:41 AM   #963
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I don't understand what the percentage figures are supposed to show.
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Old 9th January 2021, 10:02 AM   #964
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Originally Posted by Matthew Best View Post
I don't understand what the percentage figures are supposed to show.
The change in the value of my investments. Their current value (£16025) is 18.7% more than the total amount invested (£13500).
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Old 9th January 2021, 11:38 AM   #965
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So they’ve gone up by 18.7% since May 2017?
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Old 9th January 2021, 03:52 PM   #966
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Originally Posted by TragicMonkey View Post
...which means this is not a permanent state of affairs...
Who suggested it was?
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Old 9th January 2021, 08:38 PM   #967
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Originally Posted by Matthew Best View Post
So they’ve gone up by 18.7% since May 2017?
And is that not including the deposits, Pixel42?
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Old 9th January 2021, 11:25 PM   #968
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As I said, I've been investing £300 a month since May 2017. Every month I compare the total amount I've invested with the current value of those investments and post the result as a percentage change. The idea, as originally stated, is to use my experience to monitor how good or bad a decision it was to continue investing, rather than cash in, at the start of the pandemic. I'm not sure what it is about this that people are having difficulty understanding.

At the moment it's looking like a good decision, but that might well change as time goes on.
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Last edited by Pixel42; 9th January 2021 at 11:28 PM.
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Old 9th January 2021, 11:37 PM   #969
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I am amazed at how unfazed the Stock market was about the occupation of the Capitol by a hostile mob.
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So what are you going to do about it, huh?
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What would Plato do?
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Old 9th January 2021, 11:38 PM   #970
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Originally Posted by Pixel42 View Post
As I said, I've been investing £300 a month since May 2017. Every month I compare the total amount I've invested with the current value of those investments and post the result as a percentage change. The idea, as originally stated, is to use my experience to monitor how good or bad a decision it was to continue investing, rather than cash in, at the start of the pandemic. I'm not sure what it is about this that people are having difficulty understanding.

At the moment it's looking like a good decision, but that might well change as time goes on.
I think that ON is suggesting that putting in your deposits gives a distorted picture of what your investments are earning. Using that system, I can get 100% “return” if I ramp up my deposits. Pretty meaningless.
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Old 10th January 2021, 12:13 AM   #971
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When I first proposed doing this as a way to monitor the effect of the 'Black Swan' on a small investor several posters encouraged me to do so. If the consensus is now that it's meaningless I'm happy to stop.

I will, however, continue to use the percentage by which the value of my investments has grown or shrunk to determine if I would have been better off cashing in my stocks and shares ISA back in February and putting/leaving my money in a savings account.
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Old 10th January 2021, 12:21 AM   #972
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Originally Posted by Pixel42 View Post
When I first proposed doing this as a way to monitor the effect of the 'Black Swan' on a small investor several posters encouraged me to do so. If the consensus is now that it's meaningless I'm happy to stop.

I will, however, continue to use the percentage by which the value of my investments has grown or shrunk to determine if I would have been better off cashing in my stocks and shares ISA back in February and putting/leaving my money in a savings account.
I’m not having a shot at you personally. But I hope you see my point. The type of investment fund I’m in publishes its annual return on investment which I use to compare to other funds, shares, cash etc. Last year it returned a bit under 5%, which I’m happy with. This year I’m hoping for 7-8%, which is about the 10 year average.

If you are happy with what your system tells you, that’s fine. But saying 18.7% increase is not a useful point of comparison to anyone else.
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Old 10th January 2021, 02:02 AM   #973
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Fair enough. I was never convinced it would be useful to anyone else, to be honest.
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Old 10th January 2021, 05:50 PM   #974
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Glad that got cleared up. I didn't want to start any arguments.

Pixel, have you read about the 50/30/20 rule?

"Senator Elizabeth Warren popularized the so-called "50/20/30 budget rule" (sometimes labeled "50-30-20") in her book, All Your Worth: The Ultimate Lifetime Money Plan. The basic rule is to divide up after-tax income and allocate it to spend: 50% on needs, 30% on wants, and socking away 20% to savings.1"

https://www.investopedia.com/ask/ans...udget-rule.asp

So 18%ish is pretty close to the goal, though I guess it gets muddy again if you drill down into whether savings includes growth.

Well done on your investments, anyway.
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Old 11th January 2021, 01:30 AM   #975
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Originally Posted by Orphia Nay View Post
Pixel, have you read about the 50/30/20 rule?
Interesting.

My records show that in 2020 I spent roughly 46% of my post tax income on needs, 22% on wants and saved 32%. Of course 2020 was unusual - not only did my holidays (normally the biggest chunk of my 'wants') get cancelled but I also spent a lot more than usual on essential maintenance (including a new garage roof) for my house, which added significantly to 'needs'. A similar rough calculation for 2019, which was more typical, gives a 28/35/36 breakdown.

Keep in mind I'm not saving for my retirement, I'm already retired. I'm mostly saving with an eye on my possible eventual need for long term care; I'm hoping I'll be able to afford a live in carer so I can stay in the home I've lived in for over 30 years rather than move into a retirement/nursing home.

Bottom line is that I have savings of about £70k, a house worth about £450k and after tax income (from final salary pensions) which exceeds my typical 'needs' by about £2000 a month. So I think I'm OK.
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Old 11th January 2021, 07:30 AM   #976
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Originally Posted by Pixel42 View Post
Bottom line is that I have savings of about £70k, a house worth about £450k and after tax income (from final salary pensions) which exceeds my typical 'needs' by about £2000 a month. So I think I'm OK.
Well done

That's a great position to be in and gives you a good buffer should you require expensive care much later in life. It's essentially the same position Daddy Don was in and meant that his last 18 months were spent in safety and comparative comfort in an excellent care home.

edited to add.....

I realise that you'd like to be looked after in your own home. So did Daddy Don but eventually his medical needs exceeded what could be provided for at home

Last edited by The Don; 11th January 2021 at 07:31 AM.
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Old 11th January 2021, 11:01 AM   #977
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Originally Posted by Pixel42 View Post
When I first proposed doing this as a way to monitor the effect of the 'Black Swan' on a small investor several posters encouraged me to do so. If the consensus is now that it's meaningless I'm happy to stop.

I will, however, continue to use the percentage by which the value of my investments has grown or shrunk to determine if I would have been better off cashing in my stocks and shares ISA back in February and putting/leaving my money in a savings account.
This is where there are different ways to review one's investment performance, because people are often measuring different things to track different goals.

What I think is being conflated here is portfolio valuation vs returns on investment.

I track my portfolio valuation to see how I'm progressing toward my retirement target number. Basically: I want to have $x by the age of 55, how'm I doin'?

Alternatively, I'm curious about how hard my savings are working for me. So, the metric for this is what's called a 'dollar adjusted return'. To calculate this, I only consider how much growth has come from the investments themselves, and exclude my new savings. If my portfolio grew 15% this year, but 10% of that is new savings, then the portfolio only returned 5%. I might want to compare that to some sort of benchmark to see how my investment choices are panning out.

This is why I mentioned in an earlier post that it's a big deal to consider this, because when we're just starting out, our annual contributions are the bulk of each year's portfolio increase. Later, as compounding takes a larger effect, our annual contributions become proportionally smaller to the point of being a rounding error.

Some people actually reach a point where compounding alone will achieve their dollar goal by the target date, and stop contributing new savings. I'm at that stage.

Here are my 2020 monthly %returns, dollar-adjusted, not annualized (so: real month over month deltas):

Jan-20 7%
Feb-20 -8%
Mar-20 -5%
Apr-20 14%
May-20 6%
Jun-20 11%
Jul-20 3%
Aug-20 27%
Sep-20 -7%
Oct-20 -5%
Nov-20 6%
Dec-20 8%

Annual return is 63%

ETA: I'm not providing the raw numbers because either I'm poor and embarrassed or rich and don't want to sound boasty.

ETA more: and the point I'm trying to make is that this is achieved with me assuming that nobody can predict what stocks, bonds, or the market will do, so building a portfolio model based on that. Dollar cost averaging into a diversified index, buy and hold.
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Old 11th January 2021, 11:26 AM   #978
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Originally Posted by Pixel42 View Post
Keep in mind I'm not saving for my retirement, I'm already retired. I'm mostly saving with an eye on my possible eventual need for long term care; I'm hoping I'll be able to afford a live in carer so I can stay in the home I've lived in for over 30 years rather than move into a retirement/nursing home.
There's a rule of thumb that even with today's low yields, savings for events <5 years out shouldn't be invested in the market, due to its volatility. The most common example I come across is younger people saving for a home down payment.


I'm on the same page with maintaining independence. My partial solution is to prepare my basement as an in law suite for them to maintain some independence once they require 24/7 support. My mom is close to the stage where she will become a fall risk, so unfortunately, this is the line for me to switch to insisting they can no longer live on their own. Fulltime at-home care is just too expensive, it would exhaust their net worth in a couple of years.
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Old 17th January 2021, 08:02 PM   #979
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Thanks for the informative posts, blutoski, and best of luck persuading your parents to leave their house.
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Old 24th January 2021, 09:08 PM   #980
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https://www.abc.net.au/news/2021-01-...ality/13089128

"Within nine months, the top 1,000 billionaires, mainly white men, had recovered all the wealth they had lost.

"Conversely, it could take more than a decade for the world's poorest people to recover from the economic impacts of the pandemic.

"That is the upshot of Oxfam's latest report, The Inequality Virus, which highlights how the coronavirus crisis has exacerbated inequality and deepened poverty around the world."

"The report's release came as the World Economic Forum's Davos Agenda meetings kicked off on Monday under the theme A Crucial Year to Rebuild Trust."

"Globally, women are over-represented in the sectors of the economy that have been hardest hit by the pandemic.

"The report said if women were represented at the same rate as men in those sectors, 112 million women would no longer be at high risk of losing their incomes or jobs."


Is the Black Swan over, but only for billionaires? Does it only apply to investors? (Things we've already discussed in here.)

Finance really needs to rethink itself.
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Old 24th January 2021, 09:43 PM   #981
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I've been retired for 15 years. 30% of our assets are savings/investments the rest in real estate (not including our home). No debts. Was 30% 10 years ago but have been shifting to real estate as I consider the stock/bond markets increasingly risky and wife and I are not getting any younger. But we are in good health so no immediate plans but kick around ideas from time to time.
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Old 24th January 2021, 10:33 PM   #982
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Originally Posted by Orphia Nay View Post
Is the Black Swan over, but only for billionaires?
And how.

I just posted in the NZ thread how NZ's richest man has made $3.5Bn since the start of the pandemic.

It looks even worse when that equates to $700 per person in the entire country.

Originally Posted by Orphia Nay View Post
Does it only apply to investors?
Investors are not feeling a lot of pain. It's the people without investments who are hurting.

Originally Posted by Orphia Nay View Post
Finance really needs to rethink itself.
No kidding.
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Old 24th January 2021, 10:40 PM   #983
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Originally Posted by Orphia Nay View Post
Finance really needs to rethink itself.
Right at the moment, the people who make up "finance" don't have much incentive to rethink themselves. They're getting along just fine the way they are.
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