I Told You So
On 2/13/17 I wrote this article on Ankle biting the stock market. My main takeaway from that article was that you should not speculate on things with no data to back it up. ESPECIALLY when you are running negative headlines about a purely positive phenomena. People will think you are dumb. Let me rephrase and add a little bit: the smart people will know you are dumb. You will generate plenty of page views though, which I guess is more important than accuracy in today's journalism.
Think about it a second. The big shot day traders and fund managers that consistently outperform the market do not write about their daily strategy, they just go and run it and make a boatload of money on the market then they shave some off the top as their nominal fee for over-performance. It is quite literally more than a full time job in most cases. And again it is likely that these positions are rewarded to only the best and brightest, and competition is fierce. Nowadays computer aided day trading algorithms and analytics have evolved well beyond the realm of a mere casual's understanding. I would liken these performance requirements to an F1 driver's. There is no person in the world who is capable of driving that car while at the same time writing about how he is taking every turn. Makes sense? If not, then possibly you would be a good candidate for writing at Forbes and generating "trainers hate him!" ads.
Let's stick to the car/race analogy here for a second. I have just illustrated that it is impossible to get good data from the boots on the ground because they are too busy! So who should you get your data from? Well, maybe smart people for starters. Possibly people who offer a solid foundation of financial advice that is consistent with the performance of every major metric known to man in that realm. Possibly it doesn't have to beat the market, maybe you just have to beat your own expectations on occasion.
I heard a joke at Thanksgiving this year. 2 guys are hiking and they are approaching bear country:
Guy#1: (takes off hiking boots, begins putting on running shoes)
Guy#2: Hey bro, why are you doing that?
Guy#1: Don't you know? This is bear country dude.
Guy#2: Dude, there is no way you can outrun a bear.
Guy#1: I don't have to outrun a bear, just you.
Think about that a second. My point is that you will not be outrunning a Goldman Sachs fund runner anytime soon. That should not even be your basis for comparison. Also, you are not trying to outrun your friend for any particular reason, because there is no big bad bear that will come and get you (accidental pun.) Yes, quite literally, a bear market could surface at any point, but any coherent financial advice takes into account this hard fact of life. Really, I just took an opportunity put a rare SFW joke in my blog that I thought was funny, so sue me.
To summarize, here is FJJ's list of investing advice which will get you ahead of the game for the rest of your life:
- Have a good job and marketable skills.
- Maintain your body in some fashion
- Always maintain a safety net with 6 months of expenses in it minimum. Invest with it if you want but read this first.
- Consistently invest in the asset classes of your choice:
- Do your own car work and house repairs and upgrades when you can.
- Buy things you want and sell things you don't need for profit and fun
- Run dollar cost averaging to get involved and get the most bang for your buck
- Build your portfolio in such a manner that you lower your taxes legally. And you can be sure I take my own advice on this one baby.
- And a whole lot more I won't even list right now!
Notice that the title and main image of the article are implying that I gave advice to invest because I knew the DJIA would reach 24k. But in fact, what really happened was that I told you to invest multiple times. Then I gave you a framework of articles to support said investment so it would be possible to hold even in an economic downturn without a painful withdrawl. This would inevitably ensure long term gains at a minimum and very high short term gains at a maximum. Then I had the audacity to point out that practically every major "news" outlet in Feb of 2017 was calling DJIA at a mere 20K a bubble with virtually no evidence to support these claims, so you should not have changed any of your plans based on their pathetic speculations at that time.
Do you want my brain crammed in there with yours so it can do all the work for both of us or what????