What's your strategy for 2022?

[FIREstarter]

@user137 already answered a lot of what I also would refer to.

@Patron

Yes, a hedge against an upcoming recession. Silver could be interesting too, some say.

I think there’s a video from Warren Buffett about gold. He’s not a fan of it. Also, you would have to check how much hedge gold provided during the financial crisis 2007-09 or other crises before. I remember people talking about Silver already 5 years ago, citing that it’s on the rise and Bill Gates owns a lot of silver (back then - not even sure if the story is true).

@Patron

It’s more about optimising a portfolio when there are strong indications that the old strategy doesn’t work anymore during the next decade or so and there would be better options available.

What are the “strong indications” that the strategy is not going to work anymore? All those predictions from “analysts” usually have one thing in common: they don’t turn out to be true. I remember people writing books and predicting the stock market to crash for the last 10+ years. Guess what: I used to believe those crash prophets back in the days. Which was utterly stupid, looking at it from hindsight. At least those crash prophets made some good money selling books and their own funds…

@Patron

I’m not saying they are wrong or they are right, I just know that some people spend much more time on such analyses than me and then it would be foolish not to at least think about it, no?

It would be more interesting to know what they recommend, not what they say is not viable anymore.
The problem I see with all those analysts is that none of them has a crystal ball. Let’s take for example the analysts following certain stocks and giving buy, hold or sell recommendations. From what I’ve seen for most of the single stocks I hold is, that those predictions are worthless. If I had bought every time some analyst downgraded a stock, I would have made much more money, because usually the stock price was going up after the downgrade.

So yes, I think it makes sense to think about it. But then you have to come up with a solid plan.

@TeaCup

Stock Percentage: This is THE TIME to re-assess whether your shares allocation (100%) was still right. It was easy to hold 100% shares in a Bull-Run, that might change some day in the next 10 years max

I totally second this! Holding 100% shares during a bull run is easy. You still need to be comfortable with when stocks go down over and extended period of time, e.g. 3 years. It still depends on where in your investment timeline you are.

@TeaCup

„Alternative Assets“: If your Share percentage permits, I would now invest mainly into i) Cash, ii) Swiss Real Estate Funds and iii) European Residential Reits.

I see it similar to user137: most real estate in european countries is overpriced (even though I only know the German and Swiss market, and a little bit the market in Czech Republic, Slovakia and Romania). It might be good for capital preservation, but not if you want to grow your net worth significantly.

@TeaCup

Diversify shares away from market cap. As a Swiss investor and given the Swiss Market actually was on-par with the US market; I would recommend a Swiss investors first 20% of Shares to be Swiss

So why not just buy Roche, Novartis and Nestle? They anyway make up 60% of the SMI.

[user137]

@FIREstarter

So why not just buy Roche, Novartis and Nestle? They anyway make up 60% of the SMI.

and SwissRe with their 7% dividend yield.

[the_p]

@Patron

@FIREstarter

Betting against US tech in the last 10 or 15 years would have been a very bad idea.

Yes, but that could be even more an indication that it’s now time to get out. No?

The worst investment decision I made was in ~2015-2016. I had a position in a tech stock, which has tripped in value. I’ve sold it, thinking I’d take a nice profit and that it can’t go much higher, can it? Today it would have been 10x the original value.

[johndoe1]

Thanks guys, as soon as you’re done selling your stocks I’m going to buy the s… out of VT

But honestly: Timing the market (e.g. a recession) just doesn’t work, it’s been scientifically proved so many times. You gotta get it right twice: on your way in and on your way out. Good luck with that!

[the_p]

@Patron

Again it’s not about risk tolerance, it’s not like I couldn’t bear the 40% downturn, however, if you can avoid, why not avoid it?

Another one of my old mistakes: around 2013, I was thinking about whether to enter the market. I’ve had a look at the historical S&P 500 chart, what I saw was that the price was reaching the peak of 2000 and 2007. According to technical analysis, this were “resistance” points, meaning, that it’d be likely for the price to go down from there. And sure enough, there were enough doomsday predictions available to confirm my point. I’ve decided to stay out of the market.

[Dr.PI]

@Patron

in an upcoming recession

This is a prognosis, see above.

The coming recession

Did the title get your attention? We’re already in a bull market and heading for a recession in the next 8-12 months. Central banks might try to intervene, but in any case their hands are tied given their massive balance sheets and the fact that interest rates are already low. In addition, the long-term debt cycle points to a natural correction. If the above sounds crazy to you, then move on to another topic and hang on tight to your 7 shares of Amazon. If it doesn’t sound crazy to you…

[logitacher]

@johndoe1

But honestly: Timing the market (e.g. a recession) just doesn’t work, it’s been scientifically proved so many times. You gotta get it right twice: on your way in and on your way out. Good luck with that!

Nice summary for all the recent posts here.

[user137]

@the_p

The worst investment decision I made was in ~2015-2016. I had a position in a tech stock

my soulmate I sold all tech when Trump was elected. I don’t even dare to post those stock prices.
I would’ve been about a year’s income better…

[user137]

@johndoe1

You gotta get it right twice: on your way in and on your way out.

which is timing the market twice

what about 1999 to 2010?

[Kay4rElle]

i have the luxury to only time my way in… lol
I wanted to buy when VT was well above 100, now im happy to get a 10% discount, i just buy and buy… thats how we do it, righ? (just like the crypto folks… lol)

[FIREstarter]

Do you have that luxury because you received a larger amount which you didn’t want to invest?
And do you have a plan when you buy? I mean certain numbers, how much to buy?
It’s one thing to buy and buy, but one day you’ll run out of ammunition. And what if VT keeps falling further?

I wouldn’t compare it with crypto (I know, it was more of a joke) - with VT you at least get some dividends, and it won’t get rekt magically (like so many crypto scams)

[Kay4rElle]

@FIREstarter

Do you have that luxury because you received a larger amount which you didn’t want to invest?
And do you have a plan when you buy? I mean certain numbers, how much to buy?
It’s one thing to buy and buy, but one day you’ll run out of ammunition. And what if VT keeps falling further?

I got some money at the end of last year but i did not feel “safe” throwing it all in. Its less than 10% of my NV so i don’t feel too bad, even if it drops further. In that case i could just buy more and average down?

[FIREstarter]

@Kay4rElle

In that case i could just buy more and average down?

Yes, I get that. My question is: how much are you investing (percentage wise) of that amount, and which buy prices to you have? E.g. let’s say VT goes down to 90 USD. Are you investing 10% at 93, 92, 91, 90? I’m curious about your targets.

[cyberhigh]

Only like 10% of investors (private and professional) beat the market over the last 100 years.

So even if VT falls, the likelihood is quite high that you would underperform VT when picking stocks / adjusting accordingly.

[FIREstarter]

@cyberhigh

So even if VT falls, the likelihood is quite high that you would underperform VT when picking stocks / adjusting accordingly.

You misunderstood my question I was more interested in his approach about when and how to invest in VT. I’m not talking stock picking.

[Neville]

@Patron

[…] occasionally you might miss some great opportunities etc. but through that you can avoid that in a recession your portfolio goes down 40%.
[…]
Again it’s not about risk tolerance, it’s not like I couldn’t bear the 40% downturn, however, if you can avoid, why not avoid it?

Basically what you are saying is that you don’t need the extra profit and would welcome avoiding downturns.

You seem to have a high risk tolerance and a high risk capability, so the discussion is indeed not about risk tolerance. It’s about the risk profile of your asset allocation being out of sync with your investing goals.

@Patron

Also, some people recommend increasing liquidity a lot right now, e.g. by holding around 20% cash or so. If then, markets go down, you could use that money to buy cheap stocks and profit from the upwards trend.

Market timing.

[Kay4rElle]

@FIREstarter

Yes, I get that. My question is: how much are you investing (percentage wise) of that amount, and which buy prices to you have? E.g. let’s say VT goes down to 90 USD. Are you investing 10% at 93, 92, 91, 90? I’m curious about your targets.

since i would fail at timing the market i DCA from here so that i invest my sum over the span of a year (so about 8-10% each month?)

[user137]

@Kay4rElle

since i would fail at timing the market i DCA from here so that i invest my sum over the span of a year (so about 8-10% each month?)

study the dotcom bubble and the 2007-2009 crisis, especially duration and recovery times before you start to buy in into a long-overdue recession with a 10% monthly amount.

[Kay4rElle]

@user137

study the dotcom bubble and the 2007-2009 crisis, especially duration and recovery times before you start to buy in into a long-overdue recession with a 10% monthly amount.

Well my allocation (Based on my NV excluding RE) at the moment is somewhat 70% cash.
The amount i planned to invest/i got represent 12% of my NV. So the 10% monthly represent 1% of my NV. This will not change much at my cash allocation, and i start to feel bad having that much cash lying around with no “plan”.

[Neville]

@Kay4rElle

i start to feel bad having that much cash lying around with no “plan”.

It’s actually not lying around. Its value is being reduced by inflation.