The beauty of DCAing all the way down and back up

[Maenad]

Our current AA is 85% S&P 500 Index, 15% Total Bond Index. We have continued to invest our regular amounts in our 401ks and post-tax through the bear and back up again.

As of end of trading today, we have tied our previous high-water mark for our total portfolio value, with the S&P still about 5% down from its previous high-water mark (when the Top Was In ;-) ).

Just a reminder and confirmation for those who are newer to investing, that keeping your wits about you and staying the course really does pay dividends. Literally and figuratively!

How has everyone else done?

[Monocle Money Mouth]

My investment accounts have done well recently too. I’m 100% equities so they looked terrible on Christmas Eve. I stayed the course, made my IRA contribution, added to my taxable account every two weeks, and added to my 401k through the drop. Everything looks good again. My personal net worth is higher than ever now. I know that can change in an instant, so I keep my Spock like calm even when things are going well.

Getting comfortable with volatility, the possibility of seeing your contributions get wiped out in a few days, and patience are key. If you put money in the market and expect to be immediately rewarded with huge increases, you will be disappointed. If you are ok with fluctuations, even big fluctuations, you will be rewarded. The absolute highs of September 2018 will look cheap when the S&P 500 hits 3500, 4000, 5000, or whatever new highs the market has in store for us in the coming years. It might take longer than you want to achieve those numbers, the index might even dip below 2000 again, but I have little doubt we will get there.

[Mr. Green]

We've FIREd so we're not adding any new money to our accounts. We're 80/20 and I just rebalanced because we were getting a little equity heavy. We're only 3.2% from our all-time high back in September, yet the market is still more than 3.2% below it's all-time high. Good stuff!

[talltexan]

Instead of explicitly rebalancing, I jump in and change 100% of new money to go into whatever is weighing the least in my portfolio. I'm hoping to get to someth8ing like the Merriman ultimate Buy/Hold, but small cap value is always a problem.

[bacchi]

Instead of explicitly rebalancing, I jump in and change 100% of new money to go into whatever is weighing the least in my portfolio. I'm hoping to get to someth8ing like the Merriman ultimate Buy/Hold, but small cap value is always a problem.

I set up an account at M1 Finance using the Merriman 90/10 UB&H pie (set up by the man himself). The auto-balancing is pretty slick and I wish it had come out 5 years ago when I was investing a ton of money. Sadly, only a pittance from my SO's work income gets invested there now.

[talltexan]

can you tell me how you came to use M1 instead of Motiffe?

I have young kids, but was thinking I could do the motiffe thing with pots of money for them, perhaps persuade my parents to kick in.

[bacchi]

I hadn't heard of Motif until now and Merriman mentioned M1 on one of his podcasts.

https://paulmerriman.com/fractional-share-brokerages-motif-investing-m1-finance/

They look pretty similar.

[ChpBstrd]

Interestingly, had the correction never happened, and stocks were flat from late Sept. until now (i.e. since the last time stocks hit these prices) we would have a slightly lower net worth.

We all got to acquire more shares than we could have otherwise thanks to a "bad" event that discouraged lots of people from investing. Then all those shares reverted back to the long term trendline. Those of us making regular, uninterrupted contributions literally converted volatility into wealth.

[Wintergreen78]

I retired on January 31, 2018, so my final paycheck including my cash-out of unused vacation time came in February. From January 1, 2018 to January 1, 2019 my net worth is down by $70k, on annual expenses around $40k/year.

So, after all the noise and commotion last year, it was really pretty boring overall, financially.

I’m about 80% stocks/20% bonds with my stocks about 60/40 US/rest of world. If I had been more heavily weighted toward the US, I would have done better. Over the next year I’m going to think about weighting the US more heavily, but not actually make any changes. I’ve found laziness and inattention to details to be a pretty good financial strategy.

Forgot to add: I check twice a year, so from July 2017 to July 2018 I’m up by $137k. I like that period better, so I pay more attention to it than January to January.

[COEE]

About a week ago we were up about 4.5% from the previous high last October.  I usually look monthly, but the recent run-up had me curious as well.

I'm not sure that the last few months have been DCA though.  My spreadsheet triggered me to rebalance January 1 and I sold about 4% of my portfolio in bonds and bought stock.  I also received a bonus early this month that equates to about 2% of my portfolio that is sitting within my portfolio in a MMF until I pull the trigger on a couple purchases we've been wanting to make.