# Anyone go ALL IN at the depths of a crash?



## StockyGuy (16 October 2017)

Reality is most of us don't have a nice bundle of cash gathering cobwebs (ie earning pathetic bank interest) ready to go when one of the big crashes or bear markets occurs.

I'm talking 1987 crash, 2000 crash and 2007-2009 crisis, in particular.

In the event, I suppose you'd go for index ETFs or stocks like BHP and the big four banks.

When the GFC hit I simply had insufficient cash to take advantage of the discounts.

I'm wondering if I should stay entirely out of stocks and save my pennies, until the next big crash occurs.

Anyone succeed or fail wildly adopting this approach?  Failure would certainly be possible where you used leverage and underestimated the length of the downturn, or where you bought stock in a business that went under.


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## Indoril (17 October 2017)

Trying to catch the bottom of anything from a daily swing to a market "crash" is near impossible. During the 2008 crash, how many people do you think thought they were getting a bargain before the prices kept going lower and lower and lower...


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## tech/a (17 October 2017)

Buy high and sell higher.
Easier!


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## sptrawler (17 October 2017)

The problem is a crash usually follows a strong bull run, getting out before the fat lady sings isn't easy.
I remember at work when the GFC hit, a mate had sold out only months prior, he jumped back in when it plateaued, we thought he was lucky.
Then it really tanked.lol


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## StockyGuy (17 October 2017)

tech/a said:


> Buy high and sell higher.
> Easier!



Mr tech/a, having read a fair # of your posts I humbly say I simply am not in your league.  Not only in knowledge/skill, but also, I think, capitalisation.  You may be able to consistently do that; I simply can't.

But generally I agree with doubtfulness of the "all in after crash" plan - a lot of things have to align for it to work.

You need to be kind of in-between - wealth-wise.  The seriously wealthy probably wouldn't like to have their money at the mercy of a possibly many years-long bear market.  OTOH, you need to be wealthy/comfortable enough that you can put at least 10s of ks in and not be desperate for it.  (There's little benefit putting very small amounts in to strategies designed to benefit from very broad long term trends.)  You also need to have the cash ready to go at the time.  Basically you gotta be debt-free and not too close to retirement.

Indoril, those people you mentioned did not factor in how long a bear market can last.  This is not a get rich quick scheme.

sptrawler, the strategy I mention is probably more for non-traders who are NOT otherwise in stocks.  When the govt is giving out cheques and dodgy pink batts perhaps it's time to buy index ETFs, and cultivate patience.

But yeah this is all much easier said than done.  Chances are you wont buy quite at the bottom (not that you need to) and will have to endure many years of disheartening stock prices.


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## Smurf1976 (17 October 2017)

Outside of superannuation my first share investments were in 1999.

Yep, it ended in disaster but taught me a lot about market cycles, valuation, bubbles and so on.

Next time around I was selling heavily from the start of 2007 and was out when the GFC hit. Been there, seen this movie before and wasn't going to be caught again.

I missed the actual bottom but caught most of the past bull market. Not all but I'm better off than if I held continuously since before the GFC.

This time it seems I am early once again. I'm not out of stocks but I've certainly been reducing my holdings one stock at a time since March this year. The reason isn't about the ASX as a whole. Just a lack of value at the individual company level plus the extreme valuation of the US market will bring the bears out sooner or later. With central banks moving to tighten and the oil market tightening it's another re-run of the same movie. I've seen this one before.

I'm not into calling tops in markets but if someone held a gun to my head and demanded an answer then I'll say sometime in the first 5 months of 2018 for the major US indicies. No comment for the ASX but if the US starts going down then Australia is unlikely to be going up at that point.

I sure don't try and pick exact tops and bottoms but using weather as an analogy if it's 38 degrees outside then that's near enough to the top for me. Likewise if there's frost on the ground then that's near enough to the low.


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## tech/a (18 October 2017)

If you live in Alaska you’ll be permanently cold
If you live in Dubai you’ll be permanently 
Hot

Find momentum and hop on it
Look at A2M

It’s way easier than waiting for a crash


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## Indoril (19 October 2017)

StockyGuy said:


> Indoril, those people you mentioned did not factor in how long a bear market can last.  This is not a get rich quick scheme.




My point was only that how do you know when it's hit the bottom and ready to buy in again?
Look at sptrawlers comment about what happened to his friend. It's probably a similar story to many.


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## zac (22 October 2017)

sptrawler said:


> The problem is a crash usually follows a strong bull run, getting out before the fat lady sings isn't easy.
> I remember at work when the GFC hit, a mate had sold out only months prior, he jumped back in when it plateaued, we thought he was lucky.
> Then it really tanked.lol




It's very hard to pick a market bottom (or top) with any degree of accuracy. 
I've switched gears in trading where I used to be a 'value investor' through FA and while that's a very good way to invest I've been thrown too many curve balls.
So now I do FA on Global Macroeconomics and being a contrarian investor.

So my question is has anyone been relatively successful or at least had confidence through studying the market conditions at the time? I've been in the markets post GFC so am wary that any success could purely be attributed to the sustained bull run (despite what media says).


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## tech/a (22 October 2017)

zac said:


> So my question is has anyone been relatively successful or at least had confidence through studying the market conditions at the time? I've been in the markets post GFC so am wary that any success could purely be attributed to the sustained bull run (despite what media says).




And whats wrong with that.
If you cant profit in a bull market then you'll never profit in any market.

*Go where the momentum is in your direction and go there often!!*


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## zac (22 October 2017)

tech/a said:


> And whats wrong with that.
> If you cant profit in a bull market then you'll never profit in any market.
> 
> *Go where the momentum is in your direction and go there often!!*




No nothing wrong at all, market historically is heading up 70% of the time. I agree with "the trend is your friend"
Maybe my point hasn't come across well in words.

A point in this thread was made that someone thought they were buying low but the market crashed lower so I was wondering if anyone was able to read the market with some confidence to get an appreciation of likely moves or turning points. I understand no one can predict a top or bottom but can make an appreciable assessment.


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## tech/a (22 October 2017)

Search a thread I posted a long time ago.

Picking tops and Bottoms.



zac said:


> I understand no one can predict a top or bottom but can make an appreciable assessment.




*YES*


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## traderxxx (27 October 2017)

interesting thread
yes i probably would go all in, or nearly all,

but before that  I have just finished the process of getting all out since the market open this morning.


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## tech/a (27 October 2017)

So this is your top or close enough to it?


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## traderxxx (27 October 2017)

yes hopefully the top, but, as you said close enough to it,, is good enough, have picked today though.
so we will (c)
already missed selling spi in the 20,s twice,  monitoring a new calc for the spi
at 5929 so hopefully it will have a go for that.


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## StockyGuy (30 October 2017)

Hmmm IF the US stock market crashed in the near-term, and then consequently ours did, RBA basically have nowhere to lower interest rates further to generate growth.  To lower our interest rate even more, in a "flight to security" scenario where people prefer USD to AUD ANYWAY, could make us be at US50 cents.

Then there's fact government has a serious budget deficit, unlike last time when K Rudd was at the helm.  So don't expect additional stimulus measures.

Anyway, just paranoid musings...


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## stevo2 (19 March 2018)

Picking bottoms only results in smelly fingers!


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## Garpal Gumnut (19 March 2018)

Depends on the crash, if a real crash.

All in. 

I'm near all out now. 

gg


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## robby986 (27 May 2018)

I'm comfortably retired now, mainly because l kept buying shares after the crash, in the same way as before the 2008 crash. We lived on my wife's wages and I threw everything I earned into the market. I think you have to look at it as buying a share of a company for the dividends and the capital growth is the cream. It was very tough doing this as you are going against the crowd. I'd often buy $10000 worth of shares and they would immediately slump. I relied on years of experience and reading about the long term trajectory of shares to keep myself on track. It was a frightening time to buy. And buy. And buy, and lose money, and lose yet more money on paper. I was in my sixties so I didn't relish the prospect of going broke and having to work until I dropped. The market started to turn around 2012 and in a very short time We were made very wealthy on paper by people who were now prepared to pay a lot more than what I paid for the shares we owned. I still wonder at this!  I retired in 2013 after being made redundant. The cash settlement from the redundancy was invested in shares.  I have sold houses and invested them in shares. We now live very well off the dividends we received. Investment is now my full time occupation. The  companies I was invested with paid healthy dividends throughout the panic yet many people were selling at less than half price for the same share.I still buy shares for the long term. Generally I buy stocks that have demonstrated at least five years of steady income and are cheap P/E compared to the index. I concentrate on the dividends I receive. I generally try to return 6% before franking credits. I've, moved away from direct share ownership to a more index/lic fund bias for diversification and easier management.  My top holding is with IHD- my other holdings are ARG, CDM, NSC,TOT,VAS,DUI, WBC. 80 odd percent of our wealth is in shares and 20% is in cash.  I recently took a profit selling down DUI and a large holding in VEU as they had increased in value and I wanted to take a profit. As I have an SMSF in retirement I don't pay CGT. if I was holding them outside the SMSF I would not have sold them. I would prefer to keep them for the dividends. My advice is to stop trying to pick the bottom or the top. Those I know who have tried have failed or have been lucky. The WBC shares I bought recently, just before they went ex dividend. They pay  around 6% plus franking credits. I looked at the graphs and they have been hammered because of the royal commission. Everyone has sold them down. I figured they would drop after they went ex dividend  and they would go up and I would sell them to someone else for a profit. I have too much long term exposure to banks. Looks like  I'll be holding on longer than expected as they are still sinking. Hopefully I will be compensated by a nice income stream in the meantime. Who knows? Not me. This is a tough mental game but if you keep buying regularly over time and don't do what everyone else does in the panic of a crash you will prosper. Unfortunately you will only know if you can do this when the crash is on. Good luck to you.


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## Darc Knight (27 May 2018)

Garpal Gumnut said:


> Depends on the crash, if a real crash.
> 
> All in.
> 
> ...




Posted 19 March. Interestingly the ASX 300 took a drive right after this post, then regained all those losses plus some.
Everytime I hear someone out or getting out I think about jumping too.


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## luutzu (27 May 2018)

robby986 said:


> I'm comfortably retired now, mainly because l kept buying shares after the crash, in the same way as before the 2008 crash. We lived on my wife's wages and I threw everything I earned into the market. I think you have to look at it as buying a share of a company for the dividends and the capital growth is the cream. It was very tough doing this as you are going against the crowd. I'd often buy $10000 worth of shares and they would immediately slump. I relied on years of experience and reading about the long term trajectory of shares to keep myself on track. It was a frightening time to buy. And buy. And buy, and lose money, and lose yet more money on paper. I was in my sixties so I didn't relish the prospect of going broke and having to work until I dropped. The market started to turn around 2012 and in a very short time We were made very wealthy on paper by people who were now prepared to pay a lot more than what I paid for the shares we owned. I still wonder at this!  I retired in 2013 after being made redundant. The cash settlement from the redundancy was invested in shares.  I have sold houses and invested them in shares. We now live very well off the dividends we received. Investment is now my full time occupation. The  companies I was invested with paid healthy dividends throughout the panic yet many people were selling at less than half price for the same share.I still buy shares for the long term. Generally I buy stocks that have demonstrated at least five years of steady income and are cheap P/E compared to the index. I concentrate on the dividends I receive. I generally try to return 6% before franking credits. I've, moved away from direct share ownership to a more index/lic fund bias for diversification and easier management.  My top holding is with IHD- my other holdings are ARG, CDM, NSC,TOT,VAS,DUI, WBC. 80 odd percent of our wealth is in shares and 20% is in cash.  I recently took a profit selling down DUI and a large holding in VEU as they had increased in value and I wanted to take a profit. As I have an SMSF in retirement I don't pay CGT. if I was holding them outside the SMSF I would not have sold them. I would prefer to keep them for the dividends. My advice is to stop trying to pick the bottom or the top. Those I know who have tried have failed or have been lucky. The WBC shares I bought recently, just before they went ex dividend. They pay  around 6% plus franking credits. I looked at the graphs and they have been hammered because of the royal commission. Everyone has sold them down. I figured they would drop after they went ex dividend  and they would go up and I would sell them to someone else for a profit. I have too much long term exposure to banks. Looks like  I'll be holding on longer than expected as they are still sinking. Hopefully I will be compensated by a nice income stream in the meantime. Who knows? Not me. This is a tough mental game but if you keep buying regularly over time and don't do what everyone else does in the panic of a crash you will prosper. Unfortunately you will only know if you can do this when the crash is on. Good luck to you.




Yea, not a good feeling when you buy something and it just keep on falling. 

Seems that the way the market is structured, with index fund managers, traders, algorithms etc., I think that a falling stock get smashed over a few rounds. Same with a rising star - being booted up for good results, then further booted up from the fact that it's been rising.


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## Craton (27 May 2018)

Spoiler alert! Long winded reply.

Firstly, as I've posted elsewhere here, I'm rarely all in as I like to have a min of 5~10% of that nice, dry powder for if/when opportunity beckons.

Secondly, I'm rarely all out as I primarily invest for the additional income stream along with the associated tax input credits and building those stocks up for my eventual retirement.

Lastly, my stock portfolio contains blue, green and spec stocks. Apart from the specs I have value and growth stocks.

As my sig. I am a mostly passive, contrarian investor meaning am not a trader per se but I do trade.

Examples of some of my bigger accumulation windows are, post dot com bubble, 9/11 and the CFG. Here I normally keep topping up on the big div payers and maybe adding a stock or two by way of diversification.

Examples of my distribution windows are, the lead up to what became the dot com bubble (anyone remember eCorp and the like? TLS over $9). Again post 9/11 simply because a SP will never rise infinitely. I sold off non div and specs stocks pre GFC simply because the writing was on the wall so to speak. Like Smurf1976 says, "...seen it all before." and now we come to the present. 

Let me put it to you this way. What would you do if you had several non div paying and spec stocks showing between 2 and 8 bags?
Simply answer really. 

Allow me to add one more observation. There has been an increasing amount of talk of a market top which means a crash is imminent or at least a correction perhaps into a bear market. Why?
The longer the bull runs, the quicker the bear comes out of hibernation. The signs are there IMHO. Oddly, I'm not hearing, "...it's different this time."

Now to the OP's question. Do you go all in when the bottom is perceived?
Ah, now that really is up to the individual, their investing style and appetite for risk but for this little black duck (g'day tech/a), simple answer really especially if you have time on your side.


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## Mr ABC (30 May 2018)

I’ve done this but in reality it plays out a bit different to going “all in” like one would in poker. 

That One needs to be deploying cash is the general gist. However it’s completely unrealistic that an investor hoards a cash pile and buys the moment the ASX rings a bell at the low point. 

More realistically, a dollar cost averaging strategy is used to deploy funds against a falling market where the more the market falls the greater the enthusiasm to deploy funds. 

This can require savings before the decline, setting shares to reinvestment during the decline and the use of leverage in the later stages when dry powder is exhausted. 

Some basic calculations are required - you need to be fairly Saavy with odds, risk and how one goes about this. 

An example in real life may be a 100k portfolio suffering during a 50% declining market. 10-20 cash could be invested as the market falls 20 odd percent, dividends reinvested and ongoing contributions as the market falls another 10-20 percent and then a loan if/when another 10-20 occurs. I did this 2008-2012.


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## So_Cynical (30 May 2018)

Craton said:


> Let me put it to you this way. What would you do if you had several non div paying and spec stocks showing between 2 and 8 bags?
> Simply answer really.




My problem is that three of my four ~ 5/6/7 baggers pay dividends, one of them a crappy dividend, and its like a massive tax bill if i bail...

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Mr ABC said:


> An example in real life may be a 100k portfolio suffering during a 50% declining market. 10-20 cash could be invested as the market falls 20 odd percent, dividends reinvested and ongoing contributions as the market falls another 10-20 percent and then a loan if/when another 10-20 occurs. I did this 2008-2012.




I did similar 2007 - 2013 but without the loan, just kept plowing the money back in..you can only spend (invest) what you have.


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## sptrawler (23 October 2018)

We may be heading into this territory again IMO, so it may be worth refreshing the thread.
The problem with going all in at the depths of a crash, is it intimates, you have to be all out before the crash.
This is where the dilemma manifests itself, what do you hold through the crash, what do you dump in expectation of the crash?
Or do you just sell everything, in the expectation of the crash and forego dividends?


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## willy1111 (24 October 2018)

sptrawler said:


> We may be heading into this territory again IMO, so it may be worth refreshing the thread.
> The problem with going all in at the depths of a crash, is it intimates, you have to be all out before the crash.
> This is where the dilemma manifests itself, what do you hold through the crash, what do you dump in expectation of the crash?
> Or do you just sell everything, in the expectation of the crash and forego dividends?




A little on the risky side . . . but I have heard some successful long term dividend income investors say they keep a Line of Credit against their home so that they can take advantage of these opportunities when they come along.  Ie they may stay fully invested through the down turn, store up dividends as cash and when they think it has come off enough start deploying the cash into the market and use leverage from Line of Credit or Margin Loan, then they let the dividends from the new purchases pay down the debt.


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## sptrawler (24 October 2018)

willy1111 said:


> A little on the risky side . . . but I have heard some successful long term dividend income investors say they keep a Line of Credit against their home so that they can take advantage of these opportunities when they come along.  Ie they may stay fully invested through the down turn, store up dividends as cash and when they think it has come off enough start deploying the cash into the market and use leverage from Line of Credit



That is how I built up my portfolio, just kept the line of credit at a reasonable amount, so even if everything went pear shaped it didn't leave you financially exposed. 
While things are bubbling along the balance is paid down, when that once in a lifetime event that happens ever 7-10 years comes along, add shares.


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## MrChow (16 December 2018)

This is my philsophy (not for everyone).

Instead of a significant win or lose bet why not allocate your assets in a manner in which you either win small or win big.

EG.  Buy and Hold over 20 years would have gotten you between 2% to 18% depending on date in the past 100 years.

Any tinkering with variables such as timing brings extra variance which brings in the possibility of negative returns which didn't exist prior.


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## Value Hunter (23 April 2019)

Maybe somebody here can help me. There was a thread not along ago about being fully invested and not keeping cash on hand. I cannot find the thread now.


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## cynic (23 April 2019)

Value Hunter said:


> Maybe somebody here can help me. There was a thread not along ago about being fully invested and not keeping cash on hand. I cannot find the thread now.



When I do a search on  the phrase "fully invested" a number of threads come up in the results.

Can you remember anything else to help narrow the search down?


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## Value Hunter (24 April 2019)

It was a thread with very recent discussion and the O.P. was discussing how he prefers as a methodology to be always fully invested at all times rather than keeping dry powder. I did not find in the search that is why I asked. I do not remember the title of the thread.


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## cynic (24 April 2019)

Could this be the one?

https://www.aussiestockforums.com/threads/being-100-invested-a-different-way-of-thinking.34526/


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## Value Hunter (24 April 2019)

Yes, that is the one! Thanks


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## robby986 (20 March 2021)

I thought I might give a brief update on my original post about buying at the bottom. March 2020! I started buying and rebalancing in June. I have sold IHD,NSC,WBC,RDV and replaced with VAS.Why? Cheap fees and they do the same or better than the aforementioned. I took advantage of the drop in prices and bought up CDM, DUI,WHF,SOL,MLT and as mentioned before, VAS. Since then prices have recovered. I will eventually sell down some of my cdm as I am moving towards lower fees and cdm has grown to 28% of my portfolio due to mopping up the shares at very attractive prices. They have been repurchasing shares and trying to reduce their discount to NTA. It needs to be smaller. So far dividends are down in 2021 but the earnings season points to better dividend harvesting in the future. Share sight reports that we have made capital loss of -.9%,p.a, a dividend yield of 6.08% including franking credits, an overall gain of 5.24% p.a. Since December2014. If I had just bought and held Vas I would have made 8.82% p.a.. We live on the dividends so we won’t starve, and the capital loss will correct over time. We will now reinvest in Vas and low fee Lics when prices are attractive. No more fancy higher fee smart beta etfs and lics.


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## Value Collector (20 March 2021)

MrChow said:


> EG.  Buy and Hold over 20 years would have gotten you between 2% to 18% depending on date in the past 100 years.




That is a decent argument in favour of dollar cost averaging.


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## Cam019 (20 March 2021)

Value Collector said:


> That is a decent argument in favour of dollar cost averaging.



That is a decent argument for classic trend following.


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## Value Collector (20 March 2021)

Cam019 said:


> That is a decent argument for classic trend following.



Well a person that attempted to time the market jumping in and out through out the period mentioned could have ended up losing (as many did).

However, someone that just dollar cost averaged in over that period was guaranteed to succeed, without having to put in any real effort.


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## Cam019 (20 March 2021)

Value Collector said:


> Well a person that attempted to time the market jumping in and out through out the period mentioned could have ended up losing (as many did).
> 
> However, someone that just dollar cost averaged in over that period was *guaranteed* to succeed, without having to put in any real effort.



Uh, not if we are talking about real rates of return. Which we should be.


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## Value Collector (20 March 2021)

Cam019 said:


> Uh, not if we are talking about real rates of return. Which we should be.



I guess what you are saying it that the dollar cost averaging that would have earned about 9% over that time would have earn  less than 9% once you factor in inflation, that is true.

but inflation is still a curse on the trend follower, especially the one that got it wrong and earned 0% or worse lost 10% on average each year.


I am not here to argue which strategy has the highest possible growth, or which is best, just simply pointing out that in the example given where long term buy and hold earned 2% at worst and 18% at best, dollar cost averaging would have guaranteed an improved result of the 2% guy, and generated a credible long term return with almost zero effort.

of course you can rightly claim it’s possible to beat the hands off guy, but you also have to admit that if you try you are opening yourself up to the possibility of a worse result.

After all for every $1 you beat the market average return by, some one else has to underperform by $1 to fund your over performance, that’s just simple math.

If you recommend 100 people take up trend following rather than dollar cost averaging, some will win some will lose, but if you recommend 100 people take up dollar cost averaging the market, all 100 will get the market average return, which over time has proved to be a decent return.


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## over9k (20 March 2021)




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## systematic (20 March 2021)

I never get to go all in after a crash (unfortunately), or at a peak (fortunately). I'm always all in.
Empirical evidence (related to my style of investing) convinces me that I'm _probably_ better off all in over a long period of time.


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## Cam019 (21 March 2021)

Value Collector said:


> I guess what you are saying it that the dollar cost averaging that would have earned about 9% over that time would have earn less than 9% once you factor in inflation, that is true.
> 
> but inflation is still a curse on the trend follower, especially the one that got it wrong and earned 0% or worse lost 10% on average each year.



What I am saying is this - we should always consider real rates of return. You said that someone DCAing over time is guaranteed to succeed - earning a nominal annualised average return of 9%. But once you factor in inflation, that will be significantly less. Let's us use VAS for example, in 2010 VAS had a nominal return of -1.49%. Slightly negative, not terrible right? But when you factor in inflation, VAS's real rate of return for that year was -4.41%. Not insignificant. Now do that for every year in a 20 year period and tell me what the annualised average return is. Index investing and DCAing has become this religious like cult where apparently is has become impossible to outperform markets. Obviously I disagree and wish these people would factor in one of the biggest drags on performance returns - inflation, before they start espousing their zero effort nominal annualised average returns of 7-9%

100% agree. Inflation is a curse on all market participants regardless of strategy.



Value Collector said:


> I am not here to argue which strategy



Whole heartedly agree. Futile exercise from both sides.



Value Collector said:


> but you also have to admit that if you try you are opening yourself up to the possibility of a worse result.



True. Always the possibility of this.



Value Collector said:


> After all for every $1 you beat the market average return by, some one else has to underperform by $1 to fund your over performance, that’s just simple math.



Also true.



Value Collector said:


> If you recommend 100 people take up trend following rather than dollar cost averaging, some will win some will lose, but if you recommend 100 people take up dollar cost averaging the market, all 100 will get the market average return, which over time has proved to be a decent return.



This is probably true. But, if I am going to have to sit through a 40-50% drawdown, I want to be putting the odds in my favor that I will be getting more than a 7-9% nominal rate of return. Sitting and leaving my returns to chance without having some protection like a stop loss or trailing stop isn't my view of the world and does not suit my trading psychology.


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## Value Collector (21 March 2021)

Cam019 said:


> What I am saying is this - we should always consider real rates of return. You said that someone DCAing over time is guaranteed to succeed - earning a nominal annualised average return of 9%. But once you factor in inflation, that will be significantly less. Let's us use VAS for example, in 2010 VAS had a nominal return of -1.49%. Slightly negative, not terrible right? But when you factor in inflation, VAS's real rate of return for that year was -4.41%. Not insignificant. Now do that for every year in a 20 year period and tell me what the annualised average return is. Index investing and DCAing has become this religious like cult where apparently is has become impossible to outperform markets. Obviously I disagree and wish these people would factor in one of the biggest drags on performance returns - inflation, before they start espousing their zero effort nominal annualised average returns of 7-9%
> 
> 100% agree. Inflation is a curse on all market participants regardless of strategy.
> 
> ...



9% return over the time frame being discussed does best inflation, and in general holding shares is a god inflation hedge over time, because the assets owned and the products produced have natural inflation hedges.

but as I mentioned bringing up inflation is a red herring, because your trend follower is equally affected by inflation.

——————
inflation lowers the spending power of money, but the reason it does that is because prices rise over time.

Therefore, the prices of the products sold by the companies on the stock market rise over time, as to the capital value of the assets they own, this over time increases the shares prices, giving long term holders a natural inflation hedge.

for example when baked beans were $0.25 a can Woolworths probably made $0.01 profit selling it, but now that baked beans are $1.25 a can, they make $0.05 selling it.

So Woolworths and most other companies on the markets profits will increase in value to match inflation due to the revenue streams expanding with inflation, so there is a good chance that the long term holder will be protected from any inflation over time.


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## Cam019 (21 March 2021)

Value Collector said:


> 9% return over the time frame being discussed does best inflation, and in general holding shares is a god inflation hedge over time, because the assets owned and the products produced have natural inflation hedges.
> 
> but as I mentioned bringing up inflation is a red herring, because your trend follower is equally affected by inflation.
> 
> ...



I understand what you're saying, but, are you really trying to explain to me that just because someone is a buy and hold investor, that inflation adjusted returns don't apply to them? Because that is insane. 

Yes, stocks are a hedge against inflation because historically they have outperformed over and above the rate of inflation. However, that doesn't mean you can just exclude inflation from the real return calculation for buy and hold investors. They are subject to it, just like the rest of us.

Here is something just for interests sake - annualised average real return for VAS over a 10 year period from 2010 - 2019: *0.93%*

I think trend following can do better than that.


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## Value Collector (21 March 2021)

Cam019 said:


> I understand what you're saying, but, are you really trying to explain to me that just because someone is a buy and hold investor, that inflation adjusted returns don't apply to them? Because that is insane.



No I didn’t say that at all, my original point was simple pointing out that dollar costing averaging into the example given would have improved the return from 2% to 9%.

you then brought up inflation, which in the example is a red herring because the 2% return is still going to be affected by inflation, dollar cost averaging doesn’t increase the inflation risk.

And all this is a red herring because inflation over that period was far below 9% anyway, so I don’t know why you are beating the dead horse about it, it has nothing to do with my original point.


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## StockyGuy (28 June 2021)

Praying for a crash these days, but no dice, yet.

Does anyone really do the tedium of moving around a decent sum between all those bank deals with arcane rules to squeeze the absolute most from a cash account?  All saving interest rates (even on term deposits - which I'm not interested in) are uninspiring now, but the sometimes ok deals on comparison sites look a lot better than what I'm currently receiving.

But it's a lot of aggravation for things like intro rates  that only last 3 months or deals that mean I gotta make certain # of transacs a month on their visa debit card and/or have linked transaction account.  Could mean sometimes going with purely online neo banks or credit unions, any entity that guarantees up to government-backed threshold that has the best rate offer at the time. 

Trying to squeeze the max rate out of savings products, hopping from account to account, seems like a special purgatory but might be wise if your pot is decent, to somewhat offset erosion by inflation (that may soon get crazy).

This is kind of an anti-trading post, so likely a bit against the grain.  Everything safe just seems too expensive at the moment.


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## over9k (29 June 2021)

StockyGuy said:


> Praying for a crash these days, but no dice, yet.
> 
> Does anyone really do the tedium of moving around a decent sum between all those bank deals with arcane rules to squeeze the absolute most from a cash account?  All saving interest rates (even on term deposits - which I'm not interested in) are uninspiring now, but the sometimes ok deals on comparison sites look a lot better than what I'm currently receiving.
> 
> ...



Why not go for a value stock like FMG or T?


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## StockyGuy (29 June 2021)

over9k said:


> Why not go for a value stock like FMG or T?




Personally, because I have a plan to buy up certain stocks and certain ETFs in the next crash.  Details will be discretionary based on what is hit harder than the average but can take the punch, in my view, and survive and thrive.  Aiming for safe multibaggers over long term.

It's hard keeping powder dry as I watch S&P 500 marching toward 10,000, if only to spite me


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## Value Collector (29 June 2021)

StockyGuy said:


> Praying for a crash these days, but no dice, yet.
> 
> Does anyone really do the tedium of moving around a decent sum between all those bank deals with arcane rules to squeeze the absolute most from a cash account?  All saving interest rates (even on term deposits - which I'm not interested in) are uninspiring now, but the sometimes ok deals on comparison sites look a lot better than what I'm currently receiving.
> 
> ...



Plenti is a good place to store some cash.

I also obviously use cash holding to offset interest on my home loan, which is has the added benefit of being a tax free return.


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## StockyGuy (29 June 2021)

Value Collector said:


> Plenti is a good place to store some cash.
> 
> I also obviously use cash holding to offset interest on my home loan, which is has the added benefit of being a tax free return.




The P2P stuff is not gov guaranteed and not funds at call.  Perish the thought, but in a true situation where something serious goes down, with genuine safe stock bargain implications, I would not wanna have money returned to me reliant on citizen borrowers repaying me like that.

Yeah you're right if you have a home loan then offset will be best, as you'll save more on that than you get from a bank account.


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## Value Collector (29 June 2021)

StockyGuy said:


> The P2P stuff is not gov guaranteed and not funds at call.  Perish the thought, but in a true situation where something serious goes down, with genuine safe stock bargain implications, I would not wanna have money returned to me reliant on citizen borrowers repaying me like that.
> 
> Yeah you're right if you have a home loan then offset will be best, as you'll save more on that than you get from a bank account.



I think if you check out Plenti’s provisionfund, you will find it offers investors quite a lot of protection, and puts it in a better position than most alternatives such as corporate bonds etc.

But no it’s not government guaranteed, (neither are banks over certain limits), but then again things that are government guaranteed offer negative returns at the moment after tax and inflation, so you have to make a decision about earning a return or reducing risk.

I keep some cash at bank, but I hate having more cash in the bank than my offsets accounts can absorb, so I put some into Plenti.


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## dyna (4 July 2021)

The safest (?) interest rate in the world, pays less than 1.5 % [ 10yr US treasury bills ] Mr. Warren Buffet's not doing any better than that, with his billion dollar cash hoard. So, getting nothing on my cash in the bank, is just  the price I pay for not being 100% invested. Even though I expect this bull share market will press on higher, I was taking money off the table in the last few  months of this 2020-21 fiscal year. It uses up franking credit offsets for one thing and I'll plonk 27+ grand into super in July. I like holding cash. Even when it's a poor investment ,like now! You can do other stuff, if you've got it.


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## sptrawler (5 July 2021)

Value Collector said:


> I think if you check out Plenti’s provisionfund, you will find it offers investors quite a lot of protection, and puts it in a better position than most alternatives such as corporate bonds etc.
> 
> But no it’s not government guaranteed, (neither are banks over certain limits), but then again things that are government guaranteed offer negative returns at the moment after tax and inflation, so you have to make a decision about earning a return or reducing risk.
> 
> I keep some cash at bank, but I hate having more cash in the bank than my offsets accounts can absorb, so I put some into Plenti.



What happened to Ratesetters, or is that now Plenti?


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## qldfrog (5 July 2021)

sptrawler said:


> What happened to Ratesetters, or is that now Plenti?



Post in thread 'Anyone go ALL IN at the depths of a crash?' https://www.aussiestockforums.com/threads/anyone-go-all-in-at-the-depths-of-a-crash.33525/post-1126553
Good returns but getting lower and lower, and IMHO not worth the risk .
On a personal view
I invested a bit of cash but now in  withdrawal mode.heading from 5 figures toward 4.
They had a scheme funding energy saving /solar in SA and from memory returns around 6pc.
All gone and not interested to lend to someone getting money for new bazooka exhausts for his car with no collateral.i let this to the people on the other side of my political views 
RS now Plenti did well and was probably saved by the job saver plan.
But not so sure in the future, especially for multi year view.
But easy web interface,good platform


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## Value Collector (5 July 2021)

sptrawler said:


> What happened to Ratesetters, or is that now Plenti?



They split from the UK based parent, changed their name to Plenti, and listed on the share market.


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## divs4ever (24 July 2021)

all in ?? 

 probably  not i am terrible at picking bottoms  and on the rare time i  do i  often  end up with a part-filled order  so the brokerage takes the sweetness out of the bargain  , now assuming March 2020 was not  a real crash , then i haven't been in a real crash  yet , but from what i have learned in 2018 and 2020  when the market really gets moving there are so many places to watch   ( and i could see how you would be tempted by an index fund in sliding  market , because i did so with VAS in 2011 , although not all my ready cash  , just dabs of it  )

will i buy a few things  in the next big correction ( or crash )  YES  , but probably not use all the reserve cash  just in case there is a bargain out-of-step with  the market 

 the hard on a downturn is knowing when the pain has stopped ( remember that term 'dead-cat bounce' that can be tragic , if you don't have a steady income  to fill up the treasure chest  between dips )

 just remember to assess you ability to fill up the warchest after the spending spree 

 please try very  hard NOT to be a forced seller


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## sptrawler (14 June 2022)

Is opportunity about to present? Is this the bust before the boom, or the bust before the abyss?


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## Dona Ferentes (14 June 2022)

sptrawler said:


> Is opportunity about to present? Is this the bust before the boom, or the bust before the abyss?



wait a week.

Das Kapitulation needs to occur.


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## JohnDe (14 June 2022)

My phone has gone off. I have been adding stocks to my price watch list for several months, at very low prices that I thought were more realistic for the quality stocks that I picked. I'd put in several prices, ranging from average to extremely low. Every so often one wold go off. This morning my phone is binging away like a Christmas melody.

Prices may be heading towards pre-pandemic pricing, or it could be a big blip for a week.

Watch and wait.


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## Telamelo (14 June 2022)

Reckon thing's likely to get worse (pending capitulation/crash imo)..  how low will market's fall too ?


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## JohnDe (14 June 2022)

Telamelo said:


> Reckon thing's likely to get worse (pending capitulation/crash imo)..  how low will market's fall too ?




True, though not everything is down and some will float in bad times.


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## KevinBB (14 June 2022)

JohnDe said:


> Watch and wait.



Don't watch and wait. Follow your plan! There must have been a reason why you set those alert prices at the levels you did.  
KH


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