Am I keeping it too simple?

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Kookaburra
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Am I keeping it too simple?

Post by Kookaburra »

I don’t use margin, puts, calls, options, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
Last edited by Kookaburra on Wed Dec 01, 2021 11:35 pm, edited 1 time in total.
Marseille07
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Re: Am I keeping it too simple?

Post by Marseille07 »

I'm pretty much the same way; mine's actually simpler because I don't even rebalance. If you plan to use VPW, be sure you understand the pros and cons.
minimalistmarc
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Re: Am I keeping it too simple?

Post by minimalistmarc »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
Not missing anything. Most investors using these tools will underperform the market in the long term.
bhsince87
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Re: Am I keeping it too simple?

Post by bhsince87 »

That's essentially what I've done for almost 35 years. Although I have owned quite a few individual stocks.

And I maybe made a "trade" 4-5 times a year, not counting regular contributions to my 401k.

I retired at 53, (with no pension), so I can't complain.

Simple will work.
Time is what we want most, but what we use worst. William Penn
Charon
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Re: Am I keeping it too simple?

Post by Charon »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears
Actually, it sounds too complicated. I just use a target date account that does all this for me :wink:
jwfails
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Re: Am I keeping it too simple?

Post by jwfails »

Sounds good to me.

Retired three years ago and mine is: No International, 60 stock/40 bond, Stocks are VTSAX/VTI, Bonds are split between VBTLX and TSP “G” fund. Emergency fund split between money market and I-Bonds.

Now having to navigate Tax Gain Harvesting, large portion in brokerage account.
CoAndy
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Re: Am I keeping it too simple?

Post by CoAndy »

I too keep it simple. Why not? It simply works.
Jack FFR1846
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Re: Am I keeping it too simple?

Post by Jack FFR1846 »

If you wanted to make it more complex, you could do all that stuff, waste a ton of time doing it and end up with lower gains and higher taxes. "Don't do something, just stand there".
Bogle: Smart Beta is stupid
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Kenkat
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Re: Am I keeping it too simple?

Post by Kenkat »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
I think you are doing what most people do here; it matches what I am doing.
UpperNwGuy
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Re: Am I keeping it too simple?

Post by UpperNwGuy »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities.
I use none of these tools. They're unnecessary for the average investor.
Zeno
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Re: Am I keeping it too simple?

Post by Zeno »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
We have done the same since 1986. And actually, we didn't start to rebalance until I was 50 years old; prior to then we were 100/0/0, with everything in broad market funds, just squirreling away month after month. We have never held an individual stock or bond. We have never bought or sold during a market event. The only time we sell now is to rebalance, which is triggered infrequently given our 5% bands. The events since Friday didn't come close to triggering rebalancing.

No pension. No RSU's. No windfalls. No start-up options. No IPO scores.

This boring approach applied over many decades -- coupled with a LBYM & DIY (and more recently LCOL) lifestyle -- has gotten us to 50x. I'm 57 and DW is 61. We are currently at 65/32/3 (likely now 64/33/3 but I haven't checked).

The BH approach has worked well for us.
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Taylor Larimore
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Re: Am I keeping it too simple?

Post by Taylor Larimore »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.
Kookaburra:

Congratulations for resisting the urge to "beat the market."

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “The marketing colossus known as the mutual fund industry provides the weaponry which enables investors’ to indulge their suicidal instincts.”
"Simplicity is the master key to financial success." -- Jack Bogle
jebmke
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Re: Am I keeping it too simple?

Post by jebmke »

You are missing the frustration and regret associated with making a wrong-footed move.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
mptfan
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Re: Am I keeping it too simple?

Post by mptfan »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm Am I missing something by not using all those other “tools”?
No.
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ruralavalon
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Re: Am I keeping it too simple?

Post by ruralavalon »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
In my opinion you are missing nothing by not using "margin, puts, calls, shorts, stop limits, or leveraged securities."

Keep it simple.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Sandtrap
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Re: Am I keeping it too simple?

Post by Sandtrap »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
IMHO you are missing nothing and gaining a great night's sleep.

OTOH: if you memorize those technical financial words, as well as: opportunity costs, locking in gains, tax lost harvest, et al, you can use them in social conversations and sound financially wise and wealthy. (kidding). :shock: :shock:

Simple is good.
j :D
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260chrisb
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Re: Am I keeping it too simple?

Post by 260chrisb »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
I've let others use those tools! No, I don't believe you're missing a thing!
3funder
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Re: Am I keeping it too simple?

Post by 3funder »

What is VPW?
Global stocks, US bonds, and time.
Triple digit golfer
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Re: Am I keeping it too simple?

Post by Triple digit golfer »

You already know the answer to this question. If you're seeking a pat on the back, here you go. Good job!
Fallible
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Re: Am I keeping it too simple?

Post by Fallible »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
You are missing out on the “half” of those things you wisely admit you don’t understand, and if you do truly understand the rest well enough to Invest successfully, you still need to know if they are right for you. It seems that your current investment plan is working out for you, so maybe you are dealing with a case of FOMO, fear of missing out.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
sailaway
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Re: Am I keeping it too simple?

Post by sailaway »

This is the way.
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retiredjg
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Re: Am I keeping it too simple?

Post by retiredjg »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
I hope not. I don't use any of those things either. Like you, I'm not even sure what they all are.
Normchad
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Re: Am I keeping it too simple?

Post by Normchad »

retiredjg wrote: Wed Dec 01, 2021 1:05 pm
Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
I hope not. I don't use any of those things either. Like you, I'm not even sure what they all are.
I’m in the same boat. And completely satisfied and confident in the approach.
Triple digit golfer
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Re: Am I keeping it too simple?

Post by Triple digit golfer »

Normchad wrote: Wed Dec 01, 2021 1:13 pm
retiredjg wrote: Wed Dec 01, 2021 1:05 pm
Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
I hope not. I don't use any of those things either. Like you, I'm not even sure what they all are.
I’m in the same boat. And completely satisfied and confident in the approach.
Me four.
Cara
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Re: Am I keeping it too simple?

Post by Cara »

Am I the only one who doesn't know what VPW is (and wants to know) ?
X528
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Re: Am I keeping it too simple?

Post by X528 »

Cara wrote: Wed Dec 01, 2021 3:46 pm Am I the only one who doesn't know what VPW is (and wants to know) ?
VPW = Variable Percentage Withdrawl?:

https://www.bogleheads.org/wiki/Variabl ... withdrawal
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BrooklynInvest
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Re: Am I keeping it too simple?

Post by BrooklynInvest »

I think you're being exactly as complex as the situation warrants.
Cara
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Re: Am I keeping it too simple?

Post by Cara »

X528 wrote: Wed Dec 01, 2021 3:53 pm
Cara wrote: Wed Dec 01, 2021 3:46 pm Am I the only one who doesn't know what VPW is (and wants to know) ?
VPW = Variable Percentage Withdrawl?:

https://www.bogleheads.org/wiki/Variabl ... withdrawal
Thanks
kilkoyne
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Re: Am I keeping it too simple?

Post by kilkoyne »

Marseille07 wrote: Tue Nov 30, 2021 10:34 pm I'm pretty much the same way; mine's actually simpler because I don't even rebalance. If you plan to use VPW, be sure you understand the pros and cons.
Can you elaborate on the cons with VPW?
JnyVuko
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Re: Am I keeping it too simple?

Post by JnyVuko »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
FWIW: I don't use any of these tools. I do what you do and have been retired now for 4 years (I turn 62 this month). I'd rather spend my time thinking about and doing other things aka living life. I SWAN about as well as I think I could, especially given the times we live in. All the best to you. Do the right thing. Relax. And enjoy life.
Marseille07
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Re: Am I keeping it too simple?

Post by Marseille07 »

kilkoyne wrote: Wed Dec 01, 2021 8:53 pm
Marseille07 wrote: Tue Nov 30, 2021 10:34 pm I'm pretty much the same way; mine's actually simpler because I don't even rebalance. If you plan to use VPW, be sure you understand the pros and cons.
Can you elaborate on the cons with VPW?
There are two primary issues (for me, might not apply to everyone);
1. It's really difficult to grow your portfolio in retirement because the WR starts off high and goes higher.
2. VPW runs out of money after N years. I know they tell you to buy SPIA at age 80, but that's a huge unknown because we have no idea how much it'd cost then.
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Alto Astral
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Re: Am I keeping it too simple?

Post by Alto Astral »

Ignorance is bliss.
Northern Flicker
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Re: Am I keeping it too simple?

Post by Northern Flicker »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
The short answer is no.
Topic Author
Kookaburra
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Re: Am I keeping it too simple?

Post by Kookaburra »

Thanks everyone! It’s relieving to know that I’m not missing something important. Plus, I really have no interest in learning about all those things.
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LilyFleur
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Re: Am I keeping it too simple?

Post by LilyFleur »

I've used a stop-limit order to purchase shares in an index fund ETF in taxable. It was fun. I bought while I was still asleep :mrgreen:

ETFs bounce around quite a bit during the trading day, so why not save a few dollars if you need to do some rebalancing?

I like learning new things.

I don't make many changes in my portfolio, though. So I've only done a stop-limit order a handful of times over several years.
shess
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Re: Am I keeping it too simple?

Post by shess »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I don’t use margin, puts, calls, options, shorts, stop limits, or leveraged securities. Heck, I don’t even know what half those things are.

I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.

Am I missing something by not using all those other “tools”?
My first 15 years of investing, I was all about reading up on the wonderful new techniques, and it didn't really help much. So I switched to a 3-fund portfolio, and the past 15 years have been boring but performance has been very good. I'm a technical person, so when I see threads about leverage and the like, it draws my eye and I start reading. But my biggest investing challenge by far is stepping back and NOT doing any of this interesting stuff, because I should know better. But, every time, I want to believe, so I start reading the thread, even though I'm going to step away...
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JoeRetire
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Re: Am I keeping it too simple?

Post by JoeRetire »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm I just buy MFs/ETFs when I have the cash, maintain my AA through re-balancing, gradually adjust my AA to become more conservative as retirement nears, and plan to decumulate using VPW.
Aside from the VPW plan, you are doing what many people do.
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TT
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Re: Am I keeping it too simple?

Post by TT »

delete
Last edited by TT on Tue Feb 06, 2024 3:45 pm, edited 1 time in total.
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mdigital
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Re: Am I keeping it too simple?

Post by mdigital »

Yes you are missing the fun of crypto investing :D
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Re: Am I keeping it too simple?

Post by RadAudit »

Kookaburra wrote: Tue Nov 30, 2021 10:30 pm Am I missing something by not using all those other “tools”?
I hope not. I don't use them, either.

I've been retired for more than a decade and I am now using two target risk funds to get my AA where I want it. I'll rebalance my portfolio (two funds) in about five years or so, if the portfolio AA gets too far out of alignment (+/- 5% of target.)
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
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arcticpineapplecorp.
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Re: Am I keeping it too simple?

Post by arcticpineapplecorp. »

Simplicity is the ultimate sophistication.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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arcticpineapplecorp.
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Re: Am I keeping it too simple?

Post by arcticpineapplecorp. »

mdigital wrote: Thu Dec 02, 2021 7:13 am Yes you are missing the fun of crypto investing :D
also known as speculation (not investing)
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
wander
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Re: Am I keeping it too simple?

Post by wander »

Investing is like driving which is simple, but you need to know your destination.
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Eagle33
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Re: Am I keeping it too simple?

Post by Eagle33 »

arcticpineapplecorp. wrote: Thu Dec 02, 2021 5:07 pm Simplicity is the ultimate sophistication.
+1 Well said.

IMHO the financial world add all that extra stuff to help justify the various fees and to confuse the average person so they will pay for advise, etc. After the big levers of your savings rate, time in the market to capture power of compounding, a target AA to control your risk, and some basic tax diversification knowledge, what is left has little positive impact for the average investor - just my opinion.
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arcticpineapplecorp.
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Re: Am I keeping it too simple?

Post by arcticpineapplecorp. »

Eagle33 wrote: Fri Dec 03, 2021 7:28 pm
arcticpineapplecorp. wrote: Thu Dec 02, 2021 5:07 pm Simplicity is the ultimate sophistication.
+1 Well said.

IMHO the financial world add all that extra stuff to help justify the various fees and to confuse the average person so they will pay for advise, etc. After the big levers of your savings rate, time in the market to capture power of compounding, a target AA to control your risk, and some basic tax diversification knowledge, what is left has little positive impact for the average investor - just my opinion.
'The only thing useful banks have invented in 20 years is the ATM' --Paul Volcker

https://nypost.com/2009/12/13/the-only- ... s-the-atm/
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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