Author Topic: Dry Powder Demon  (Read 1450 times)

Joe Schmo

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Dry Powder Demon
« on: March 20, 2019, 05:57:47 PM »
I've got "dry powder", roughly 20% of my total investments, and I like saying it because I think it sounds cool but after so much research, and so many years, I know that I'm an idiot. I've had it for so long I can't even begin to calculate what coulda/woulda been. I can't help but think...is it coming? It's been 10 years...if I hold on just a little bit longer...
Can I be helped or am I destined to just wait for the day that never comes or is 20% not that big a deal if it helps me sleep at night?

Rufus.T.Firefly

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Re: Dry Powder Demon
« Reply #1 on: March 20, 2019, 06:08:06 PM »
20% of investments in talcum powder seems heavy. I think you should diversify into deodorants as well. 

Andy R

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Re: Dry Powder Demon
« Reply #2 on: March 20, 2019, 07:36:09 PM »
Can I be helped or am I destined to just wait for the day that never comes or is 20% not that big a deal if it helps me sleep at night?

If you are doing it to help you sleep at night, then it is a pretty clear indication that putting it in equities will be above your risk tolerance and it should not go into equities, even if there is a crash. Add it to your bonds/CD allocation.

Goldy

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Re: Dry Powder Demon
« Reply #3 on: March 20, 2019, 08:25:36 PM »
If you are close to retirement it may make sense to keep it dry but if you are years away maybe trim it down. 

Wolfpack Mustachian

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Re: Dry Powder Demon
« Reply #4 on: March 20, 2019, 09:19:26 PM »
If it's equivalent to an emergency fund/bonds (as might be indicated by your sleeping at night comment), then that's a personal decision. If you're holding onto it because you have held onto it for a long time, that's sunk cost mindset, and it's only wasting more time.

dragoncar

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Re: Dry Powder Demon
« Reply #5 on: March 21, 2019, 12:00:28 AM »
Go read gyroscopicinvesting.com and https://portfoliocharts.com/2016/04/18/the-theory-behind-the-golden-butterfly/

You might continue to sleep well.

Joe Schmo

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Re: Dry Powder Demon
« Reply #6 on: March 24, 2019, 09:32:35 PM »
Thanks for the advice folks Iím not close to retirement and actually relatively new to investing. Debt free except for the house and a solid emergency fund...looking to start pumping money into retirement accounts and get serious about this FIRE thing!!
So much helpful advice on this forum!!

harvestbook

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Re: Dry Powder Demon
« Reply #7 on: March 25, 2019, 03:36:21 PM »
My guess is that even if the "day" finally came, you'd either still think the day hadn't arrived ("It will get worse!") or would still be afraid to put the money in. Honestly, I'd just hang on to it at this point, because if you put it in now, and the market tanks, you might be psychologically twisted forever. Keep what you have in cash and just start investing all your new money as fast as you can, so psychologically you're still a genius who hasn't been proven wrong yet.

ChpBstrd

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Re: Dry Powder Demon
« Reply #8 on: March 27, 2019, 09:43:01 PM »
Thanks for the advice folks Iím not close to retirement and actually relatively new to investing. Debt free except for the house and a solid emergency fund...looking to start pumping money into retirement accounts and get serious about this FIRE thing!!
So much helpful advice on this forum!!

In that case, I'm assuming we're talking about "only" a five-figure sum of money. This probably seems like a lot from your perspective now, but in 5-10 years of hardcore savings this might be your "emergency fund", your "play money account", and/or a vacation fund. What I'm saying is... no need to cry over spilt milk. Just make sure not to become one of those people saving 60% of their income and still retiring at 65 because you kept it in a checking account the whole time.

Joe Schmo

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Re: Dry Powder Demon
« Reply #9 on: March 30, 2019, 03:11:16 PM »
Itís just 5 figures. I took a pretty good pile and bought VTSAX and set up max Roth contributions for this year. Time to get serious about retirement :)