Author Topic: Moving from trading individual stocks to sticking with investing with ETFs  (Read 1707 times)

KTG

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So I am giving it a try this year. I have done really well investing in individual companies, but I am actually under some restrictions at work with what I can and can't do (I am in the financial industry), so between that, and after reading the advice in Bogleheads, here, and other places, I have just essentially put all of my cash for investing in VTI and VOO. I know thats a little redundant there, since VTI is mostly made up of VOO, but I started out in VOO and thought VTI would be more diverse which is what we all seem to want. Maybe someday I'll consolidate. This is outside my 401k btw.

So that being said, after a great start to 2018, the last few days have me really on edge. My instincts say to pull a big chunk out, but the little voice of Jack Bogle on my shoulder is saying don't worry about it. A few weeks ago I put the last of my what I said I would invest into the market, created a spreadsheet of target returns over the next 20 or so years, and have told my self to forget that the money is there. Which, goes against my instincts.

How do you guys overcome this? Just not pay attention to the news? I mean, I have killed CNN, Fox, and all the others from my phone, and try not to watch at home. But I do pay attention to CNBC and Bloomberg, as I feel if it affects the market, I want to know about it. But I keep telling myself that its not supposed to matter, that I am in this for the long haul. But its so conflicting.

trollwithamustache

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #1 on: February 01, 2018, 08:03:09 AM »
what ah, kind of investing were you doing with individual equities that has you so jumpy over a couple days? 

KTG

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #2 on: February 01, 2018, 08:04:21 AM »
Mostly financials and oil, but my concern is goes beyond those guys.

Rob_bob

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #3 on: February 01, 2018, 01:53:13 PM »
So is it the fact that the market has had a little bit of volatility this week, or that we have had a long bull run that has you itchy?  You are in the broad market now, not a couple of sectors which can go up and down independent of the broad market.

Can you predict the future with any reasonable accuracy?  Do you know anyone who can?  Do you think the economy is about to tank and not recover in the next 10 or 20 years?

What is your plan for the ups and downs of the market?

KTG

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #4 on: February 05, 2018, 02:00:45 PM »
Uggh. . . I really need to stick with my instincts. I seem to have them for a reason.

NoStacheOhio

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #5 on: February 06, 2018, 09:03:07 AM »
Uggh. . . I really need to stick with my instincts. I seem to have them for a reason.

False.

If this is money you need in the near future, putting it in the market is a poor choice.

If this is money you do not need in the near future, watching your balance daily/weekly/monthly is a poor choice.

Investing for the long term in a low-fee, diverse basket of equities (and possibly bonds, depending on your risk preference) is a good choice.

Mississippi Mudstache

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #6 on: February 06, 2018, 09:11:04 AM »
So that being said, after a great start to 2018, the last few days have me really on edge. My instincts say to pull a big chunk out, but the little voice of Jack Bogle on my shoulder is saying don't worry about it...How do you guys overcome this? Just not pay attention to the news?

I listen to NPR and I check CNN at work. I'm always aware of what the market is doing - I just don't care. It took me about 2 years after I first became an active investor to get over the market jitters (and by "active", I mean doing something other than the target date funds in my 401k; I am still a buy-and-hold index investor). It helped a lot to quit screwing around with individual stocks and set up a defined asset allocation with a schedule for re-balancing. There's nothing like having a plan to keep you on the straight and narrow.

Rubic

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #7 on: February 07, 2018, 10:02:02 AM »
Uggh. . . I really need to stick with my instincts. I seem to have them for a reason.

Your instincts will mislead you.  Our lizard brains evolved to hunt food and avoid
predators, not to assess random market fluctuations.

capitalninja

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #8 on: February 07, 2018, 03:17:25 PM »
KTG if you're invested in VOO and VTI I wouldn't worry about it. With your holding in very broad ETFs, there's practically 0 chance of you losing your investment over any 5 - 10 year period.

As far as how be less jumpy, recite this mantra:  "Volatility is not the same thing as risk. Volatility is not the same thing as risk. Volatility is not the same thing as risk."

The gyrations the market takes on any given day, week, or month doesn't matter. The only reason why you should be watching the market is to determine when things are down so you can scoop up more at a better price.

KTG

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #9 on: February 21, 2018, 07:02:17 AM »
Thanks for the feedback guys. I actually have been reading a lot lately, namely the book A Simple Plan to Wealth thats so popular around here, and I realize that just staying the course and not thinking about it is the best choice. I still have the desire to beat the market so to speak, although its getting easier to let that go.

I made a chart in excel based on what I am investing now, and using 10% as a average gain, and what my balance might look like in 20 years, and it looks pretty impressive. No doubt I would win some, but I would definitely lose some too.

I might add that my biggest mistakes in trading/investing up to this point, has not been buying at the right time, I have done that well, but its been selling. Repeatedly I have watched good companies that I have sold jump in price not long after selling them.

So staying the course.

Thanks

NoStacheOhio

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #10 on: February 21, 2018, 07:39:02 AM »
Thanks for the feedback guys. I actually have been reading a lot lately, namely the book A Simple Plan to Wealth thats so popular around here, and I realize that just staying the course and not thinking about it is the best choice. I still have the desire to beat the market so to speak, although its getting easier to let that go.

It's not necessarily "beating the market," but passive index investors regularly outperform people who trade more frequently. The best investors are either dead or forgot they had investments.

https://twocents.lifehacker.com/the-best-investors-literally-forget-about-their-portfol-1782581085

Car Jack

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Re: Moving from trading individual stocks to sticking with investing with ETFs
« Reply #11 on: February 21, 2018, 07:47:22 AM »
Some people have to completely unplug from financial news to avoid doing stupid things with their investments.  There are also people who have financial advisers exactly for times like this, where they call the FA all in panic, looking to sell and the FA calms them down and keeps them from the stupid acts of selling.

Not all people are this way.  I watch the financial news every day.  I know when sudden shifts occur.  With this up to the second news at hand, what do I do?  Nothing.  I just stand there.  When my IPS says to invest, I invest.  Doesn't matter if the market just dropped 1000 points or jumped up 1000 points.  I understand this can be difficult, but disconnecting your investing from the financial news by writing and sticking with an IPS will help greatly to avoid the stupid investing things that can screw things up.