What's your VIAC/Finpension 3A strategy for the next months?

[yetanothername]

@Neville

Humans are wired to “don’t just stand there, do something” – whereas here it’s “don’t do something, just stand there.”

Love it. Passive investing is a bitch. Goes against human nature.

[neutralname]

Thanks for everyone who participated.
I am confused as it seems most of you haven’t replied my question : your planned strategy for your 3A for the next months(of course subject to change).

I have put way more money on my IBKR account than 3A but I have not asked anyone’s strategy when it comes to active investment. With 3A we have so many limits, this is why I think it’s totally 2 different types of things and it doesn’t make sense to compare these 2.

I agree we can’t time the market, but My understanding of “you can’t time the market” means you can’t know the exact moment when the S&P 500 or Nasdaq touches the bottom. But as the stock market goes up most of the time, if we are not very picky to find this exact moment, it’s possible to “time the market” with a monthly or quarterly granalurity(at least to see the likelihood/probability): like what I did on Feb, I haven’t checked the stock market at all till end Feb, and it was obvious for me that it will drop in the following months. Do you define this judgement as “time the market”?

But I don’t know much about the Swiss real estate market, anyway you can see that I don’t check my VIAC account frequently. not even once per month.

As our 3A provides us the possibility to change our portfolio on a weekly basis, I think it’s not too much to think about changing it say each month/quarter

@Cortana

There is already a thread and I think there is no need to discuss the 3rd pillar separately: What’s your strategy for 2022?

Yes, I thought we could discuss 3A separately in a thread, but if there is already a 3A strategy thread or if the moderator doesn’t agree, please feel free to merge my thread…

[Yanikuza]

@neutralname

your planned strategy for your 3A for the next months(of course subject to change).

Sticking to the initial plan and continue to DCA it every month if possible (in my case). I have 3 Global 100 strategy

[user137]

I moved over my Postfinance75 portfolio to Finpension. This chunk will migrate to 30% equities with a minimum volatility fund, hedged to CHF, 30% cash and 30% real estate. It’s not gonna make much profit (if at all), but at least it’s gonna protect my capital. It’s gonna stay like this until the SP500 reaches below 3500 (weekly 200MA) then I’ll reconsider to slowly increase equity exposure.

I’m leaving the other chunk in 99% Quality factor equities.

I think the post opener is right with trying to protect your wealth. If you only have 3-4 years in equities it doesn’t really matter much, but if your 3a is already 100k+ it’s worth considering the downside protection. And also I believe a good chunk of the current forum population was not living through the 2000 and 2007 crash so they don’t really have a psychological experience of a 50% drop with 6-7 years of full savings.

[Neville]

@neutralname

your planned strategy for your 3A for the next months

You might be in the wrong forum for this. You’ll mostly get answers like “the same strategy as before”, which would be my answer, too.

[Wolverine]

First to answer neutralname’s questions:

My strategy:
VIAC: do nothing, ride the wave.
Frankly: keep having fun timing the market based on momentum indicators (for the entertainment value and the learning experience).

@neutralname

Do you define this judgement as “time the market”?

Yes. To me, it doesn’t mean it’s bad by itself but it means it’s “know what you are doing” territory. We’re one statement from the FED away to stocks either skyrocketing again, or diving toward lower belows, depending on the content of the statement. Other assets would be affected as well. In my opinion, we live in uncertain times and predicting the future is hard.

Then, the rant:

@San_Francisco

But isn‘t that… you know… kind of… timing the market as well?

I’m kind of on the side of “market timing is ok if you know what you’re trying to achieve by that and accept the risks of doing so” so, yes.

It could also be seen as a risk assessment, though: I can’t predict where the bottom is and won’t know it when it happens, I’ll know it only in hindsight and it will probably take some time for me to get enough confidence in it. So it could have happened yesterday, it could happen next week, next month, next year or it could even never happen and stocks could never reach that high a peak as we have had last year (and even go all the way to zero).

Acknowledging that, I’m balancing the risk of missing a quick recovery if it is around the corner, to the one of taking more apparent losses for some time as things go down more. I’m confident that stocks will recover and don’t need that money for a long time, so my account keeping its value in the short term has no import to me, I’m glad to trade it for a shot at something that do matter to me, higher returns, as was the case when I chose my allocation.

The baseline being: know what you want to achieve and what matters to you before choosing an allocation/strategy.

[johndoe1]

@Wolverine

The baseline being: know what you want to achieve and what matters to you before choosing an allocation/strategy

I’ll toast to that one

That said, does this rule of thumb hold true: the older you get, the less allocation to stocks (and more to bonds)? If so, what allocation at what age? Should it be a linear or rather exponential change of allocation to bonds over time?

The reason for this strategy, as far as I’ve understood it, is to avoid retiring right before a stock market crash possessing a 100% stock portfolio. Also, fixed income from bonds might play a role

[Double_A]

My retirement is in 40 years or so… So I certainly won’t worry about what happens in the next few months.

[dbu]

@Bojack Please merge to the other “strategy for crash/2022” topic or delete.

@neutralname Please stop opening a topic for each question you have, and use search to find a convenient one to think whether it fits somewhere before you do.

[Dr.PI]

@dbu

Please merge to the other “strategy for crash/2022” topic or delete.

Well, I think it is a legimate question if one should have a different strategy for 3a. My answer is no, but I am happy to see other arguments.

@dbu

Please stop opening a topic for each question you have, and use search to find a convenient one to think whether it fits somewhere before you do

My feeling is that most forums have a support style “one question, one topic” habit, what is common here is actually rather unusual.

[Slutmachine]

@Patron

Maybe it would help if some people would just stop policing around other people on what opinions and investment ideas/approaches they may have, when they have to open another topic and when not, what investment approaches are legitimate or not and when they don’t agree that buying VT in DCA mode is the best approach then they are in this wrong forum and kindly gtfo.

They’re merely trying to help you staying the course, or at least that’s what they believe. There’s that.

@Patron

Barely anyone who studied macro finance, economics, or whatever topic and is working professionally in wealth management or is researching investment topics in a University context is investing purely in VT in DCA mode. Maybe think why that is. And I don’t think that everyone here knows it better than those people. Not saying it’s a bad approach but I don’t get why here some people are so militantly intolerant.

Cos if investing was seen as too simplistic (which in reality it is), all those folks would be out of a job!
But yes a few geniuses will succeed in beating the markets constantly and they will generally make a good living off working for persons whose financials require more than dca’ing in VT.
The thing is you are not either of them. Keep it simple!

@Patron

DCA’ing VT surely is a good strategy especially for people who absolutely don’t care about investing at all, but many people here spend hours on this forum what begs the question what for if DCA’ing VT is the only thing that interests you.

Many people stuff themselves with information for no reason other than fighting boredomness/emptiness, addiction to newsfeeds, internet and socials as well as FOMO. Especially nowadays where everyone is so desperately afraid of missing the train that will lead them to their fantasized dream life of getting rich fast, retiring early and traveling the world.

[SwissTeslaBull]

The same strategy since 2006: (Max year amount of 3a / 12) in highest stock package (global 100 atm). Best DCA of my life.

[Wolverine]

@johndoe1

That said, does this rule of thumb hold true: the older you get, the less allocation to stocks (and more to bonds)? If so, what allocation at what age? Should it be a linear or rather exponential change of allocation to bonds over time?

That’s a question worth it’s own thread, if you open it (or revive an existing one if there is one), I’ll be glad to participate. Common wisdom is to use age in bonds for a retirement glidepath but there are many alternatives to that common wisdom, including a more agressive path, liability matching ladders, bond tents, having different asset classes into the mix, lifecycle investing and probably other aspects I’m not thinking of right now.

For me, I’m willing to have a 100% conservative assets allocation (including more than just bonds) at the time of my death, but wouldn’t fret still having some agressive assets if I die earlier. Leaning on the conservative side, Edit: scratch this: [I’m using 125-age in bonds to establish my allocation.] Replace with either “age-25 in conservative assets” or “125-age in agressive assets”. Thanks Burningstone!

[Burningstone]

@Wolverine

I’m using 125-age in bonds to establish my allocation.

Didn’t you mean 125-age in equities? Otherwise your bond allocation decreases as you get older, which doesn’t make sense in my opinion

[johndoe1]

@Wolverine

That’s a question worth it’s own thread, if you open it (or revive an existing one if there is one), I’ll be glad to participate. Common

Done, thanks for your first input ! Here’s the link to the new thread:

Change of asset allocation getting older?

Does this rule of thumb hold true: the older you get, the less allocation to stocks (and more to bonds)? If so, what allocation at what age? Should it be a linear or rather exponential change of allocation to bonds over time? The reason for this strategy, as far as I’ve understood it, is to avoid retiring right before a stock market crash possessing a 100% stock portfolio. Also, fixed income from bonds might play a role @Wolverine’s already kindly provided his input to this topic: “Common wis…

[Wolverine]

@Burningstone

Didn’t you mean 125-age in equities? Otherwise your bond allocation decreases as you get older, which doesn’t make sense in my opinion

Indeed, thanks for pointing it out. I’ve edited that sentence in my previous message.

[Daniel]

Continuing to make regular, steady investments regardless of market conditions has proven to be a good strategy from a historical perspective. One problem I’ve noticed with investment solutions being quickly accessible via app, etc. is that it’s easy to get “addicted” to tracking your investments non-stop as if it were a game of sorts. It kind of reminds me of what my mum used to say about our habit of peeking in the fridge non-stop for treats: “Opening the fridge door doesn’t make goodies appear.”

The alternative is to close investment positions and go with savings accounts or medium-term notes. Historically, just holding Swiss francs has often resulted in decent real returns over other currencies, particularly in times of crisis. That’s true even if you keep CHF banknotes under your mattress. If you are somewhat risk-averse, this is not a bad option.

[Brndete]

To provide a good answer you would need to share more of your insights.

@neutralname

It was a no-brainer

Why was it a no-brainer last year but not anymore? And why would it be different to holding index funds or shares elsewhere?

@neutralname

When the stock market touches the bottom, I will switch back

How will you determine that it touches the bottom?

@neutralname

What is your 3A “strategy” for the next months?

Same as before, max amount paid in annually, invested in max equity. Every few years I will decide whether to repay mortgage with it, taking into account the funds development and interest rates. In that case, I will switch to cash until withdrawal but continue to make my annual payment. But the timeline is years, even decades, not months.

[neutralname]

My reply to people asking me how would I judge “when the market touches bottom?”
No one can time the market, but I think it makes sense to switch back to Equity 100 strategy only when US inflation number gets significantly improved and the Fed stops to increase interest rate in the immediate future.

@dbu unless you are an admin OR you can show me the forum rule saying that we have to post under an existing thread/theme even I don’t find anything with my keywords search, I can’t promise you that. I generally search exisitng thread before posting but for my new threads I just didn’t find any existing relevant thread. I am open for discussion on this point.