Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So I am retired with LOTS of time on my hands. I also have access to more information about stocks, bonds, mutual funds, ETF's and a variety of other investments I can make using my Fidelity account. I have been following the stock market for more than forty years. I thought I had figured out the game.
So I check my diversified portfolio of equities on the last day of the month, every month and compare it against the S&P 500 Index (SPY) and the Total Stock Market Index (VTI). Some months even though I spent countless hours on my portfolio, the results are worse than SPY or VTI. I feel terrible and like a loser. This should not be happening. Can you relate?
You should spend some time reading the Bogglehead rules. The rules recommend setting allocations of low fee, highly diversified funds. Then avoid making changes and especially do not try to time or anticipate market changes. Chasing individual stocks on a regular basis is never recommended.
So I am retired with LOTS of time on my hands. I also have access to more information about stocks, bonds, mutual funds, ETF's and a variety of other investments I can make using my Fidelity account. I have been following the stock market for more than forty years. I thought I had figured out the game.
So I check my diversified portfolio of equities on the last day of the month, every month and compare it against the S&P 500 Index (SPY) and the Total Stock Market Index (VTI). Some months even though I spent countless hours on my portfolio, the results are worse than SPY or VTI. I feel terrible and like a loser. This should not be happening. Can you relate?
You need to get some better hobby's to fill your time.
The world is full of people that like to analyze and stock-pick...they come out of the woodwork when the market is flourishing and then get real quiet when it isn't. Remember day-trading? Yeah...ouch for many people.
In contrast let me share my approach. I buy and hold long-term in low cost mutual funds. I live my life and check on my balances every quarter or so but not in depth. I'm 46 and I just hit 800k in my 401k.
However, if you choose to remain on your course of action I can help you a small bit. Your horizon period of one month is terrible. Assuming you are making good decisions they may not manifest over the short term and looking each month inserts a lot of noise into your process.
You should switch your approach to quarterly (or every 6 months) since I doubt you can quit cold turkey.
So I am retired with LOTS of time on my hands. I also have access to more information about stocks, bonds, mutual funds, ETF's and a variety of other investments I can make using my Fidelity account. I have been following the stock market for more than forty years. I thought I had figured out the game.
So I check my diversified portfolio of equities on the last day of the month, every month and compare it against the S&P 500 Index (SPY) and the Total Stock Market Index (VTI). Some months even though I spent countless hours on my portfolio, the results are worse than SPY or VTI. I feel terrible and like a loser. This should not be happening. Can you relate?
Don't feel bad. The majority of high-paid active mutual fund managers fail to match the index, too. Active management for pros and individuals usually trails passive index investing.
Do you mean should you expect, every month, to beat the broad indeces? No, you shouldn't, that's unrealistic. But if over time you're under performing the broad indeces, you should do something different.
Do you mean should you expect, every month, to beat the broad indeces? No, you shouldn't, that's unrealistic. But if over time you're under performing the broad indeces, you should do something different.
Yes, like get some low cost index mutual funds, and work out a risk-comfortable allocation of equities/bonds/cash.
Check your account/fund management fees. If you are holding annuities or managed funds, you may find your net, after fees return leaves you making less than the major indices, even though your accounts/funds are indexed.
I'm not thrilled with that scenario, but, since I'm not willing to "spend countless hours on my portfolio," I consider that part of the cost of investing. If you are going to spend that much time managing your own accounts, you should probably not also pay high management fees.
I also feel angry, but for somewhat different reasons. The preponderance of my equity investments are in index funds, so I'm quite OK with merely comporting with "the averages". But what irks me ceaselessly is that the S&P 500 keeps doing better than any other index – small or midcap, European, Emerging Market, whatever else. It's as if diversifying has been – to misquote the venerable Peter Lynch – "diworsifying". Had I just stuck 100% with the S&P 500, blithely ignoring everything else, I'd have been doing better.
On the other hand, the performance of my individual stocks doesn't bother me. They're a small part of my portfolio. If those stocks happen to lag behind the indices, that's fine, as the purpose of those investments is more about research and pedagogy, than maximizing profits.
I feel terrible and like a loser. This should not be happening. Can you relate?
What makes you believe you should be beating the market (VTI is pretty much the market)? You are competing with millions of other investors out there who all believe the same thing. You cannot all be right. In fact, by definition, half of you will do better than the 'market' and half of you will do worse. That is how things average to be the market.
You are competing with some very experienced managers, like insurance companies and public retirement funds (like CalPers), all of which have people that are supposed to be experts and are paid to try to beat the market.
My suggestion is to (a) stop trying to beat the market (b) stop hovering over your portfolio and find some other hobby, (c) check out the bogleheads forum and follow their advice. There are very smart people on that forum. Their recommendations are very sound and for a good reason. Check it out.
A day to day lose use to bother me because it's not fun knowing that there was a better alternative to your own choice, but you have to have a longer time horizon. I would recommend comparing your portfolio to an S&P index fund and analyze why your bought particular underperforming securities and why refused to sell them. Reflect on what macro and micro events occurred and evaluate whether you have the conviction to buy another increment of that particular stock or if it might be time to cut your losses.
Give yourself a 3 year time horizon and evaluate if you money might be better off in an index fund or managed by someone else. I manage a portfolio that is about 10% of my net worth. I don't have the confidence or the security to self-manage any more than 10%. I've been investing for 18 years and I feel it's important to evaluate your risk tolerance and at which point you are no longer comfortable.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
