Greatest Hits: Volume 6 (Back From The Dead)

Greatest Hits

Welcome to the weekend!

Over the past few months, my trusted Yahoo stock app has been playing visual tricks on me.

More than once, I had to do a double take to confirm that my eyes weren’t (prematurely) giving up on me.

But no, the mirage just wouldn’t go away:

To save you the time, the above two tickers represent c. 50% of my equity portfolio – translating to about 22% of my total net worth.

That’s right, value and small-cap stocks.

Now, I’ve written about my tumultuous love affair with both asset classes before.

Having started off well about a decade ago, my experience has been getting progressively worse since about 2015. That was the year that growth (read: tech) has started its amazing run, leaving everything else in the dust.

I’ve lost count of the number of times I’ve read an article titled “Value Is Dead” since then.

Did the thought of rebalancing my portfolio towards large-caps ever cross my mind?

I’ll admit that it did, more than a few times.  But I wouldn’t – because as I’ve written before

…it’s persevering over long, multi-year (or even decade-long) stretches of underperformance that separates the truly successful investors from the rest.

Kind of like the people who kept piling into the S&P 500 between 2000 and 2009.

Sure, my 100% US equity allocation has held up my portfolio – but the value and small caps weren’t doing it any favours.

Until now.

As of this writing, value is up a whopping 59% since September.  Small caps are up 52%.

The S&P 500, on the other hand, is only up 11% or so.

Now, we could double-click on the above – but that would be an entire blog post (or book) unto itself.

The five-second, still-in-my-bed Saturday morning investing lesson here is as follows:

Once you have a strong conviction on your asset allocation, just stick with it.  Because if there’s one quality that makes for a successful stock market investor, it’s patience.

Have a wonderful weekend.

From Yours Truly

Why Money Is Hard

Thought Experiments That Change The Way You Think About Money

Evolution

Hedging Against A “Lost Decade” In The Stock Market

Building Wealth

The Stock Market Is Smarter Than All Of Us – A Wealth Of Common Sense

In today’s era of instant (over)communication, it’s very easy to get a severe case of investing FOMO.

This is further exacerbated by the fact that while everyone is happy to shout from the rooftops about their winners, very few people dedicate as much airtime to their losers.

The important thing to remember is that missing out on the latest investment trend does not make for an unsuccessful investing career.

As Physician on FIRE reminds us, there are no called strikes in this business.

The Problem With Market Timing – The Escape Artist

Is Investing A Zero-Sum Game? – Occam Investing

Blameshift – Indeedably

Unless You Are Spock, Irrelevant Things Matter In Economic Behaviour – New York Times

How Bitcoin’s Vast Energy Use Could Burst Its Bubble – BBC

…but, Money Is Stored Energy – Monevator

Early Retirement

Mr. Money Mustache Reveals A Huge, Hidden Obstacle To Early Retirement – Fool.com

Drawdown In Early Retirement: From Saver To Spender – Fire and Wide

New Blogger Feature

In every edition, I would like to spotlight a blogger or two who aren’t yet very well-known to the general public.

If you want to be included in my next edition, please scroll down to the bottom of the post.

Today’s featured blogger hardly qualifies as “new”. In fact, J Money has been a personal finance blogger far longer than I, having founded – and sold – Budgets Are Sexy.

I was delighted to hear he is back in the “game” with an excellent curation feature over at All Star Money.

Quality curation is tough to do – but it’s something J Money is excellent at.  Make sure to check it out.

Lifestyle Design

The Scourge Of Work Email Is Worse Than You Think – The Financial Times

As it happens, it was last fall when I realized that the pace of professional life is getting out of hand, and the volume of email is a big part of the problem.

Here are some of my methods to take back control.

Three Things I Learned From Burnout – Today Years Old

Finally, for those who have more time in the morning than they know what to do with, here are some ideas:

Morning Routine: 30 Habits To Help Start Your Day – Bella Wanana

All Around

Walker Stunned To See Ship Hovering High Above Sea Off Cornwall – The Guardian

Recommended Books

As always, some excellent and entertaining books to wrap it all up.

Let’s start with the best £1.49 you will ever spend:

The Almanack of Naval Ravikant: A Guide To Wealth And Happiness

What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures – Frank Gallinelli.  This one is an absolute must for any property investor.

The Most Important Thing: Uncommon Sense For The Thoughtful Investor – Howard Marks

Enjoy!

 

P.S: Attention New Bloggers:

if you are a personal finance blogger who hasn’t yet been featured on Greatest Hits, I would like to hear from you.

Please send an email to bankeronfire at gmail dot com with a blog post you would like to submit for consideration.

The key criteria for inclusion are as follows:

(i) Content that will be interesting or beneficial to the readers of this blog (I hope you will forgive me for reserving judgment on this one)

(ii) Your blog must be at least 6 months old, with regular posts. Too many bloggers flame out early, and I don’t want the readers here to follow a bunch of dead links.

I look forward to hearing from you.

 

Note: the above post may contain affiliate links.  You can read up about our affiliate policy here.

 

 

About Banker On FIRE

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Banker On FIRE is a London-based M&A (mergers and acquisitions) investment banker.  I am passionate about capital markets, behavioural economics, financial independence and living the best life possible.

Find out more about me and this blog here.

If you are new to investing, this is a good place to start.

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2 Comments

  1. Great roundup as usual. Thanks for the Mr. Money Mustache article, I hadn’t seen that. Makes me feel better about my Accidental Retirement jump from the corporate rat race even at 90% FI. I’ll figure the last 10% out and try not to over stress in the process. Life is too short!

    • One of the biggest FIRE challenges is to try and de-risk everything.

      Except, of course, that there’s no way to fully eliminate risk from life, no matter what we like to tell ourselves.

      Much better to acknowledge the risk and enjoy the journey instead.

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