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Discussion Starter #1
For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!
http://schrts.co/hNZmQGbz

Same with US and world as seen in AOK, which is a similar conservative asset allocation ETF
http://schrts.co/MqDXvtYb

Does this make anyone else nervous? I actually felt more comfortable seeing some volatility in 2018 since that's normal.

VCNS.png
 

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If you're nervous you may want to re-think your asset allocation. Or are you just trying to time the market?

Look at a 5 yr chart. Between 2017 to 2018 we had a similar uptick in the market with relatively low volatility. Followed by a correction.

Enjoy the rise and buy more when it corrects. If you can't stomach a big correction adjust your asset allocation. We are due for a correction one of these days, or months or years....
 

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Not really. I mean you can cherry pick and market time, but I don't have the patience for that sort of thing. If there is going to be a crash in the near future, so be it. My horizon is a few decades away, so it's not really a concern at the moment.

When I look back in my past returns, I've seen the 2008 give my portfolio a hit, but then a few years later, I ended up with a pretty large return. Maybe if I was thinking of winding down my portfolio in the next 5 years, I may consider this being an issue.
 

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Looks like a fairly consistant run up from 2009. Chart wise, what would have been your thoughts about it at the end of 2015?
 

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Discussion Starter #10 (Edited)
Looks like a fairly consistant run up from 2009. Chart wise, what would have been your thoughts about it at the end of 2015?
You're right, it's pretty consistent.

To get more of a 'numerical' reading on this, I tried using some technical measurements to see if this really is a historical anomaly. I'm using the 100 day moving average, which is an intermediate term trend line. This can show the consistency of a rally. For example, in this 3 year chart, you can see a very steady rally in 2017 (above the trend line), then no rally in 2018, and then the current rally starting in 2019: http://schrts.co/YYJYRVai

Going back to 2009, I'm looking for long rallies of AOK above that trend line and counting how many months the price was above the trend line:

2010-2011 ... 12 months
2012-2013 ... 11 months
2013-2014 ... 12 months
2017-2018 ... 13 months
Since 2019 ... 13 months so far

This shows that the current, consistent rally in the stock/bond mix is pretty normal. It seems to happen reasonably often. I feel better about it after seeing this!
 

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I think that markets are exuberant over Powell’s January ‘19 comments that were supportive to the market.

As well the recent security of ‘not raising rates’ unless there is ‘sustained inflation’ or was it ‘persistent inflation’.

Plus there has been consensus among central banks that they want inflation to run higher than the interest rate. This will theoretically ever so slowly devalue the world debt. One way to help manage the like 50+ trillion debt market.

I think with that as the playbook, markets will continue to rise....effectively testing the feds resolve to hold to the above criteria.

IMHO, there will be a trigger and the house of cards will fall to the ground, and it will be spectacular to watch. The implosion could be 1-10 yrs away.... there’s no way to know.

Would a recession cause a market implosion, or would a market implosion cause a recession ? All depends on the ‘trigger’, 2018 fed rate increases, corona virus, debt market insolvency, somewhere a war, another economy cracking that causes contagion.... the list goes on and on and could be any or all.
 

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For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!
http://schrts.co/hNZmQGbz

Same with US and world as seen in AOK, which is a similar conservative asset allocation ETF
http://schrts.co/MqDXvtYb

Does this make anyone else nervous? I actually felt more comfortable seeing some volatility in 2018 since that's normal.

View attachment 19938
No it actually makes me feel more confident for my trading plan of being long FNGU & TQQQ untill 5 up are complete from Oct 3 & or sell by mid Jan 2021 then add to my Dec 2022 SPX far out of the money puts then looking for a generational crash
 

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For about a year now, stocks & bonds combined have been rising very steadily. It seems that just about any day I look at my portfolio, the value is higher. Take a look at the VCNS chart and you'll see what I mean, since 2019. No volatility, and no dips!

Does this make anyone else nervous?
Stirring the pot by quoting another active, learned poster - perhaps you should re-think your asset allocation or maybe switch to a permanent portfolio to fit your comfort/risk zone?
Oh wait ... :rolleyes2:


FWIW ... the timing of when I'll need some funds have changed so I moved significant amounts out of equity and into FI last year. If I lose some gains, it won't bother me and if I avoid losses, I have some dry power to take advantage.


Cheers
 

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All I know is that 3 years ago a monkey could have thrown a dart at a list of stocks and whatever the dart hit would be up a lot right now. Yeah, that kind of makes me nervous, but what can you do...throw another dart and hope to be as smart as a monkey.
 

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Sell High buy Low.
Buy Low sell High.
Ride it out for the long haul if you have the time.
To invest or not to invest a large lump sum today.
I think its on the minds of many but it all depends on ones time frame and there exit plan.
 

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We have had to come up with an extra $300k US and counting for our new condo in Mexico. So our equity split has gone down by necessity. (44%)
 

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We have had to come up with an extra $300k US and counting for our new condo in Mexico. So our equity split has gone down by necessity. (44%)
I hope that isn't a Nuevo Vallarta "extra 300k if you want the keys to your condo senor" Mexican developer demand?
 

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Discussion Starter #18 (Edited)
Stirring the pot by quoting another active, learned poster - perhaps you should re-think your asset allocation or maybe switch to a permanent portfolio to fit your comfort/risk zone?
Oh wait ... :rolleyes2:
Did someone else post the same? If so, I forgot about that. This was my own genuine thought. Every couple of days, I log in, and always see a higher account value. It started making me nervous because I'm feeling an expectation that my account value will "always go up".

I have considered my asset allocation, and went as conservatively as I can possibly go. I realistically can't get any more conservative than I am right now. The results are still kind of nuts; I've gotten 6.8% CAGR over 4 years ... that's compared to a historical long term average of 6.5% for my allocation.

That is good advice though; I know you're poking fun, but it's the right answer.

So taking my own advice, I would re-think my allocation, decide it continues to be OK, and recognize that we just happen to be in one of those "lucky" stretches where all assets just zoom straight up. It's normal, and it happens. The price history (in post #10) shows there are frequently stretches like this current one where the price just smoothly goes up.

All I know is that 3 years ago a monkey could have thrown a dart at a list of stocks and whatever the dart hit would be up a lot right now. Yeah, that kind of makes me nervous, but what can you do...throw another dart and hope to be as smart as a monkey.
Yes, I think that's the reality of the situation. In a market like this where every asset class is up (stocks & bonds too) anything you picked would be up. And there's no way to predict whether it will keep going up, or not.

I still believe that the passive method of blindly sticking to the allocations is likely to outperform "tactical" shifts in anticipation of the market direction, at least in the long term.

The current situation seems like a good exercise in sticking to the plan. Putting my money where my mouth is, I just added a few thousand $ to my RRSP and deployed it right into my target asset allocation. This meant buying XIU (Canada) and XBB (bonds) which were relatively low versus other assets.
 

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Did someone else post the same? If so, I forgot about that ...
In less detail where IIRC your comments were about asset allocation beyond equity and the need to be invested instead of having a cash drag.



... This was my own genuine thought. Every couple of days, I log in, and always see a higher account value. It started making me nervous because I'm feeling an expectation that my account value will "always go up" ... That is good advice though; I know you're poking fun, but it's the right answer ...
I'm reminding you of your statements about asset allocation, the smoothing of the permanent portfolio, the need to stick to the plan and how market timing doesn't work.

Seems ironic to have these other comments made so often to other posters and now be driven by what appears to be fear with some market timing mixed in. The plan was to stick to the plan, n'est pas?


... I still believe that the passive method of blindly sticking to the allocations is likely to outperform "tactical" shifts in anticipation of the market direction, at least in the long term.

The current situation seems like a good exercise in sticking to the plan. Putting my money where my mouth is, I just added a few thousand $ to my RRSP and deployed it right into my target asset allocation. This meant buying XIU (Canada) and XBB (bonds) which were relatively low versus other assets.
Again stirring the pot ... if you believe what you believe, relative costs shouldn't matter.
Or is the nervousness and/or focus on "low versus other investments" a gauge showing that the confidence in the plan is shaky?


Food for thought ...


Cheers


PS
It's good that you are following your plan.
 

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Discussion Starter #20
Seems ironic to have these other comments made so often to other posters and now be driven by what appears to be fear with some market timing mixed in.
I don't know if irony is the right word. Whether it's other posters, or myself, we are all vulnerable to the same human tendencies and investor psychology:

- concern that prices seem 'too high'
- concern that there hasn't been any correction
- concern that turmoil is coming, or is imminent

I'm not somehow immune to the same investor psychology that everyone else experiences. We all experience it. Even when I am aware of the "theory" of how a person should invest, this does not eliminate the fear or concerns.

And the advice I give to others is absolutely the same advice I should take myself. It's good when others remind me to follow the same advice!

Again stirring the pot ... if you believe what you believe, relative costs shouldn't matter.
Or is the nervousness and/or focus on "low versus other investments" a gauge showing that the confidence in the plan is shaky?
I think you misunderstood what I wrote here. I am not nervous about what was low versus others. Instead, this is plain & dumb asset allocation, maintaining target %. My % Canada was lower than the target, so I added to Canada.

e.g. my % bonds had fallen to 48%, so with the RRSP contribution, I bought more XBB to bring it back up to 50% bonds. Sticking to the dumb old asset allocation plan without attempting to time the market.
 
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