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"Finance is a minefield that few navigate without getting maimed. It’s replete with mirages—what you see is often not what you get. Our instincts hurt us more often than they protect us. Actions that are sensible in every other realm of life lead us astray in finance."Link
Thank you @Observant1 Every little bit of knowledge helps someone.
This connects to my QQQ post about the continuous attempts to awaken brains about investing, both young and old. I established and encouraged investment learning in 1985 when an investment club was put in place among 14 co-workers. After 5 years and too little interest or participation, the club was dissolved. But, years later I still had comments related to could've, would've and should've given more attention. Even with the brief market melt in 1987, the club had a very nice profit period. Some did benefit a bit when a 401k was introduced within the company. A few small victories here and there. I'll add again, that we've presented the following book as an additional wedding or birthday gift. The Millionaire Next Door, written in 1996. The math values provided in the book are from this time frame, but the "heart" of the book is about one's treatment of hard earned money.....how not to piss it away. Which leaves money for investing. A personal finance book in the best form, that also applies to current investors.
@catch22 : Did the club invest in stocks or MF's & what kind of profits are you speaking about if I may ask ? I hope you didn't follow the Breadstown ladies math . Stay Safe, Derf
Finance is indeed a minefield. Poor decisions hurt and recovery is challenging.
Sorry if I’m repetitive, but I really believe that Monte Carlo analysis is a useful tool that reduces the minefield risk. It reduces but can never eliminate risk completely. The future can never be accurately predicted so Monte Carlo methods work well under these conditions. Here is a Link to One such tool. It’s easy to use even if you are not math oriented.
The output shows past results for the given portfolio.. No absolute guarantees that history will repeat. Sorry about that.
Best of luck to all. Luck always matters since profitable entry and exit investment times are not possible to predict. Reduce the number of decisions and reduce the overarching risk. It’s as simple as that. The long haul matters most so Ignore day to day perturbations completely.
@Derf You try'in to overload an oldtimers brain cells....??? I recall reading a few articles in Barron's or WSJ about the Beardstown Ladies investment club. About the coworker investment club: the life span was a portion of 1985 through a portion of 1991. As most funds required $2,500 to invest (exception was FCNTX); we had to get to that point for a purchase of a fund. The goal was met in short fashion. The initial monies went into a MM Cash Reserves fund that had a 1988, 7 day yield of 7.2%. Additionally for the funds of this time period, is that many had a 3% (one time) front load and some had redemption fees up 1.5% within the first 12 months of purchase. This was still better than many of the prominent big houses at the time.....a Merrill Lynch, etc. The E.R. range was from .83 through 2%. The Select funds might also have a $75 trading fee. Select funds at the time could be bought and sold on the hour throughout the business day. Transactions were performed through F.A.S.T. (Fidelity Automated Service Telephone) using a touch-tone phone. All investments were through a Fidelity account and only used their mutual funds. I can offer a few trinkets about this period (1985-1991) and investing. As noted previous, Fidelity had already established numerous "select" funds; the front runners of sector funds or what are named thematic today. To the best of my recall, we used the following funds during this period:
---Cash Reserves, MM ---Select American Gold (later merged in Precious Metals) ---Select Computers ---Select Health Care ---Contra... FCNTX ---Captial & Income, (junk bonds and related) FAGIX
We didn't trade often, mostly due to the fees. We also escaped, without harm, during the Oct., 1987 market melt, as we did not sell anything, and our position in American Gold provided a +40 in 1987 to provide a balance.
My recall for the time frame of the club is 10-12% annualized. As members of the club placed different amounts each month, each member had a percentage of ownership when the club was dissolved; and the total profits were dispatched to each member, along with their tax form for the year.
I'm sure I've missed something I thought about previously, but a fun flashback.
@catch22 : And I thought I had a good memory. Thanks for adding this to the thread, as I'm sure a few enjoyed the flash back. Stay Safe,Derf P.S. Probably a good idea to stick to funds instead of stocks !
@Derf I did find several old report papers that were published for the club which contained information that I wrote, but surprisingly; I did recall some details from those days. A nice test that apparently my brain is not as impacted by our personal lock down as I had suspected.
Comments
This connects to my QQQ post about the continuous attempts to awaken brains about investing, both young and old. I established and encouraged investment learning in 1985 when an investment club was put in place among 14 co-workers. After 5 years and too little interest or participation, the club was dissolved. But, years later I still had comments related to could've, would've and should've given more attention. Even with the brief market melt in 1987, the club had a very nice profit period. Some did benefit a bit when a 401k was introduced within the company. A few small victories here and there.
I'll add again, that we've presented the following book as an additional wedding or birthday gift.
The Millionaire Next Door, written in 1996. The math values provided in the book are from this time frame, but the "heart" of the book is about one's treatment of hard earned money.....how not to piss it away. Which leaves money for investing. A personal finance book in the best form, that also applies to current investors.
Stay Safe, Derf
Finance is indeed a minefield. Poor decisions hurt and recovery is challenging.
Sorry if I’m repetitive, but I really believe that Monte Carlo analysis is a useful tool that reduces the minefield risk. It reduces but can never eliminate risk completely. The future can never be accurately predicted so Monte Carlo methods work well under these conditions. Here is a Link to
One such tool. It’s easy to use even if you are not math oriented.
https://www.portfoliovisualizer.com/backtest-asset-class-allocation#analysisResults
The output shows past results for the given portfolio.. No absolute guarantees that history will repeat. Sorry about that.
Best of luck to all. Luck always matters since profitable entry and exit investment times are not possible to predict. Reduce the number of decisions and reduce the overarching risk. It’s as simple as that. The long haul matters most so Ignore day to day perturbations completely.
I recall reading a few articles in Barron's or WSJ about the Beardstown Ladies investment club.
About the coworker investment club: the life span was a portion of 1985 through a portion of 1991. As most funds required $2,500 to invest (exception was FCNTX); we had to get to that point for a purchase of a fund. The goal was met in short fashion. The initial monies went into a MM Cash Reserves fund that had a 1988, 7 day yield of 7.2%.
Additionally for the funds of this time period, is that many had a 3% (one time) front load and some had redemption fees up 1.5% within the first 12 months of purchase. This was still better than many of the prominent big houses at the time.....a Merrill Lynch, etc. The E.R. range was from .83 through 2%. The Select funds might also have a $75 trading fee. Select funds at the time could be bought and sold on the hour throughout the business day. Transactions were performed through F.A.S.T. (Fidelity Automated Service Telephone) using a touch-tone phone.
All investments were through a Fidelity account and only used their mutual funds.
I can offer a few trinkets about this period (1985-1991) and investing. As noted previous, Fidelity had already established numerous "select" funds; the front runners of sector funds or what are named thematic today.
To the best of my recall, we used the following funds during this period:
---Cash Reserves, MM
---Select American Gold (later merged in Precious Metals)
---Select Computers
---Select Health Care
---Contra... FCNTX
---Captial & Income, (junk bonds and related) FAGIX
We didn't trade often, mostly due to the fees. We also escaped, without harm, during the Oct., 1987 market melt, as we did not sell anything, and our position in American Gold provided a +40 in 1987 to provide a balance.
My recall for the time frame of the club is 10-12% annualized. As members of the club placed different amounts each month, each member had a percentage of ownership when the club was dissolved; and the total profits were dispatched to each member, along with their tax form for the year.
I'm sure I've missed something I thought about previously, but a fun flashback.
Take care,
Catch
Stay Safe,Derf
P.S. Probably a good idea to
stick to funds instead of stocks !