Author Topic: What Event, If Any, Would Make You Sell?  (Read 8016 times)

talltexan

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Re: What Event, If Any, Would Make You Sell?
« Reply #50 on: June 01, 2020, 07:03:24 AM »
There are only a few reasons I would sell our stock/bond portfolio.

1) We need the cash for expenses.   For example, we needed a down payment and that required cash.

2) We wanted to invest in some rental property because we found a great deal.

3) We wanted to get out of the US market because the government was taken over by fascists; we're fleeing the country; and we don't want the US government to be able to get its hands on our wealth when we do.  This would not have been on my list of reasons 5 years ago.

I, too, worry about the future of governance and institutions in the US. But I look abroad:

  • Many emerging markets are struggling with the response to the virus.
  • Many others are having legitimate governance problems of their own.

I'm not sure the case for international investments is stronger.

In my own portfolio I am 50-50.

ChpBstrd

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Re: What Event, If Any, Would Make You Sell?
« Reply #51 on: June 01, 2020, 08:28:00 AM »
There are only a few reasons I would sell our stock/bond portfolio.

1) We need the cash for expenses.   For example, we needed a down payment and that required cash.

2) We wanted to invest in some rental property because we found a great deal.

3) We wanted to get out of the US market because the government was taken over by fascists; we're fleeing the country; and we don't want the US government to be able to get its hands on our wealth when we do.  This would not have been on my list of reasons 5 years ago.

I, too, worry about the future of governance and institutions in the US. But I look abroad:

  • Many emerging markets are struggling with the response to the virus.
  • Many others are having legitimate governance problems of their own.

I'm not sure the case for international investments is stronger.

In my own portfolio I am 50-50.

Governance is everything. No exaggeration there. A quick look at the stock markets of emerging economies disproves the slogan that “stocks always go up in the long run”. Investors in China or India have earned a pittance for decades from the world’s fastest growing economies. There is corruption and then there is the simple issue that these economies are not set up to divert earnings to retail investors or cultivate innovation.

As the U.S. adopts policies that are unlike what we had when growth was high, our market outcomes will differ. Examples include defunding of education, viewing the military as a means for getting lucrative contracts, allowing bribes (e.g. anonymous campaign donations, Citizens United ruling), having multiple taxpayer-supported industries and government-favored companies, and a political culture that accepts excuse making.

Buffaloski Boris

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Re: What Event, If Any, Would Make You Sell?
« Reply #52 on: June 01, 2020, 02:24:40 PM »
There are only a few reasons I would sell our stock/bond portfolio.

1) We need the cash for expenses.   For example, we needed a down payment and that required cash.

2) We wanted to invest in some rental property because we found a great deal.

3) We wanted to get out of the US market because the government was taken over by fascists; we're fleeing the country; and we don't want the US government to be able to get its hands on our wealth when we do.  This would not have been on my list of reasons 5 years ago.

I, too, worry about the future of governance and institutions in the US. But I look abroad:

  • Many emerging markets are struggling with the response to the virus.
  • Many others are having legitimate governance problems of their own.

I'm not sure the case for international investments is stronger.

In my own portfolio I am 50-50.

Governance is everything. No exaggeration there. A quick look at the stock markets of emerging economies disproves the slogan that “stocks always go up in the long run”. Investors in China or India have earned a pittance for decades from the world’s fastest growing economies. There is corruption and then there is the simple issue that these economies are not set up to divert earnings to retail investors or cultivate innovation.

As the U.S. adopts policies that are unlike what we had when growth was high, our market outcomes will differ. Examples include defunding of education, viewing the military as a means for getting lucrative contracts, allowing bribes (e.g. anonymous campaign donations, Citizens United ruling), having multiple taxpayer-supported industries and government-favored companies, and a political culture that accepts excuse making.

The “cure” for uncertainty seems to be diversification. I have zero certainty that the US equities market will deliver returns similar to those it has in the past. I also have zero certainty that the USD will remain in its lofty position. And international equities are generally cheaper.

So what am I looking for? A burning bush? A neon sign that says “INVEST HERE!!” ? 

I think JL has it mostly right. When it comes to equities, you probably want to own all of them. The world is just a whole lot bigger than the US.

ChpBstrd

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Re: What Event, If Any, Would Make You Sell?
« Reply #53 on: June 01, 2020, 03:17:30 PM »
There are only a few reasons I would sell our stock/bond portfolio.

1) We need the cash for expenses.   For example, we needed a down payment and that required cash.

2) We wanted to invest in some rental property because we found a great deal.

3) We wanted to get out of the US market because the government was taken over by fascists; we're fleeing the country; and we don't want the US government to be able to get its hands on our wealth when we do.  This would not have been on my list of reasons 5 years ago.

I, too, worry about the future of governance and institutions in the US. But I look abroad:

  • Many emerging markets are struggling with the response to the virus.
  • Many others are having legitimate governance problems of their own.

I'm not sure the case for international investments is stronger.

In my own portfolio I am 50-50.

Governance is everything. No exaggeration there. A quick look at the stock markets of emerging economies disproves the slogan that “stocks always go up in the long run”. Investors in China or India have earned a pittance for decades from the world’s fastest growing economies. There is corruption and then there is the simple issue that these economies are not set up to divert earnings to retail investors or cultivate innovation.

As the U.S. adopts policies that are unlike what we had when growth was high, our market outcomes will differ. Examples include defunding of education, viewing the military as a means for getting lucrative contracts, allowing bribes (e.g. anonymous campaign donations, Citizens United ruling), having multiple taxpayer-supported industries and government-favored companies, and a political culture that accepts excuse making.

The “cure” for uncertainty seems to be diversification. I have zero certainty that the US equities market will deliver returns similar to those it has in the past. I also have zero certainty that the USD will remain in its lofty position. And international equities are generally cheaper.

So what am I looking for? A burning bush? A neon sign that says “INVEST HERE!!” ? 

I think JL has it mostly right. When it comes to equities, you probably want to own all of them. The world is just a whole lot bigger than the US.

It’s a lot easier to identify markets I’d like to avoid for governance reasons (I.e. Turkey, the BRICs) than it is to identify markets where good governance will yield long term economic results. South Korea, Japan, and Australia have very solid governance systems and entrepreneurial cultures, but have yielded meh performance for decades despite these benefits.

If one wants to buy a little of everything, one would have to buy into a lot of scenes set up just to snare the money of Western investors. Chinese shell companies on the pink sheets for example. Truth is, even the most pro-diversification investors have standards. The question is where to draw the line. That line would eventually apply to US large caps.

Buffaloski Boris

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Re: What Event, If Any, Would Make You Sell?
« Reply #54 on: June 01, 2020, 04:47:58 PM »

It’s a lot easier to identify markets I’d like to avoid for governance reasons (I.e. Turkey, the BRICs) than it is to identify markets where good governance will yield long term economic results. South Korea, Japan, and Australia have very solid governance systems and entrepreneurial cultures, but have yielded meh performance for decades despite these benefits.

If one wants to buy a little of everything, one would have to buy into a lot of scenes set up just to snare the money of Western investors. Chinese shell companies on the pink sheets for example. Truth is, even the most pro-diversification investors have standards. The question is where to draw the line. That line would eventually apply to US large caps.

Everyone has standards. You could take the line that all of the US also includes penny stocks. Very few people that I know do. One of my personal no-go’s is China. YMMV.
« Last Edit: June 01, 2020, 05:10:49 PM by Buffaloski Boris »

ETF2

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Re: What Event, If Any, Would Make You Sell?
« Reply #55 on: June 01, 2020, 05:06:20 PM »
3) We wanted to get out of the US market because the government was taken over by fascists; we're fleeing the country; and we don't want the US government to be able to get its hands on our wealth when we do.  This would not have been on my list of reasons 5 years ago.

Lol.  Too funny.

wingfold2001

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Re: What Event, If Any, Would Make You Sell?
« Reply #56 on: June 02, 2020, 02:53:13 AM »
I moved all our assets from Fidelity to Vanguard in kind. FutureAdvisor changed their fees from flat to percentage based which is 170% increase!
Selling might trigger a tax event but would simplify things. It's well diversified either way. Would that make you sell? I'm undecided!

wingfold2001

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Re: What Event, If Any, Would Make You Sell?
« Reply #57 on: June 15, 2020, 07:32:30 AM »
Interesting thing to add to this because the pressure to sell just increased. On Jun 9th, Vanguards digital advisor changed their algorithm. It suddenly triggered a reduction of my bond holdings from approx 65% to 2%

Unfortunately it was just in time to catch the record 6% decline! Thankfully only a small amount was being managed but it could have easily been a blood bath because I'm almost FE.

I've always used robo advisors but I'll be doing it myself from now on. Now I can't decide if I want 20/80 or 80/20!
« Last Edit: June 15, 2020, 07:35:56 AM by wingfold2001 »

Dicey

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Re: What Event, If Any, Would Make You Sell?
« Reply #58 on: June 15, 2020, 08:38:43 AM »
Not quite, but similar vein.

It listed one event for every year, IIRC, in what looked like a chart made in excel--it was a grid, if I recall correctly.

Is this the one you meant, @arebelspy?

https://www.ci.com/orderform/pdf/general_marketing/idontwant_flyer_e.pdf
Ooh, that's good! I'll be forwarding that to a few people today.
« Last Edit: June 16, 2020, 07:27:35 AM by Dicey »

MustacheAndaHalf

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Re: What Event, If Any, Would Make You Sell?
« Reply #59 on: June 16, 2020, 07:22:22 AM »
I moved all our assets from Fidelity to Vanguard in kind. FutureAdvisor changed their fees from flat to percentage based which is 170% increase!
Selling might trigger a tax event but would simplify things. It's well diversified either way. Would that make you sell? I'm undecided!
You might open a new thread for that - it will likely get lost in the existing topic.

Dicey

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Re: What Event, If Any, Would Make You Sell?
« Reply #60 on: June 16, 2020, 07:29:43 AM »
Coming back around to say every time this thread pops up, my brain says, "Sell what?" I guess all that planning stuff has really sunk in.