Investing

Market timing step 2: going back in

  • Last Updated:
  • Jan 14th, 2021 11:00 am
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Feb 26, 2017
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IrwinW wrote: Not me.
I haven't figured out what the difference is between "total return" and "personal return", but either way, I didn't beat the TSX.
Too lazy to look for a benchmark that would be a suitable comparison.

About 50/50 portfolio as of Dec 23.


1223 perf.png
I think Total would be time weighted and personal would be your actual XIRR/IRR rate of return. My Canadian portfolio hasn't done anything special this year either and my biggest Canadian account is up 5.3% for the year as of Dec 22nd according to TDDI. I have another Canadian account that is down 4% and one that is up around 10%. It my much smaller US portfolio that has bailed me out this year. Last year account was doing so badly that last year I created a thread about it...

how-long-give-investing-strategy-2266875/4/#p30590379

You're very close to the market's returns and one year is too short of a time period to evaluate how your doing. Its the 5 and 10 returns that I think we should be looking at. I always find this graph interesting :).

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I think Total would be time weighted and personal would be your actual XIRR/IRR rate of return.
Ah ! That makes sense. Thank you @Chance7652
[OP]
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Aug 4, 2014
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Omg @Chance7652 , I found our friend’s legacy in your old thread! Wonder if he would’ve added ARKK to his “investment bucket list” this year.. Face With Tears Of Joy
alexcalvado wrote: the best way to make money is my way :

have a great income
be happily married
have some fixed income, GIC, HISA, REITs, preferred, etc.
have some index funds
have some dividend stocks (eg. canadian banks)
have some speculative stock
try to time the market once in a while

the rest is history
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Feb 26, 2017
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freilona wrote: Omg @Chance7652 , I found our friend’s legacy in your old thread! Wonder if he would’ve added ARKK to his “investment bucket list” this year.. Face With Tears Of Joy
I always picture him as driving a hummer and smoking a cigar and looking like people I know who got on steroids in their late 30s...

Probably not as I think he's a Doctor. While I'm not a Bombardier fan myself, his posts were interesting.
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Aug 17, 2008
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@freilona

Does this thread get retired in 2021? I think we are well past "step 2."Christmas Tree

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IrwinW wrote: I haven't figured out what the difference is between "total return" and "personal return"
Chance7652 wrote:
I think Total would be time weighted and personal would be your actual XIRR/IRR rate of return.
Yes. Personal return reflects your actual return based on the timing of your contributions. If you don't make any contributions then time weighted and personal (money weighted) return are the same.

Say you hold 100 shares of RFD.Q at a price of $10 on Jan 1, for a total holding of $1000. By July 1 the price has dropped to $5. Most dumb money investors would be terrified, but the smart money here on RFD sees this as an opportunity to buy the dip. So you buy another $1000 worth, or 200 shares. Then the price goes back up to $10 by Dec 31.

The time weighted return of RFD.Q is 0%. But your money weighted personal return is better. The $1000 you held on Jan 1 is still worth $1000. But the $1000 you invested on July 1 is now worth $2000 for a total value of $3000. Plugging the values into XIRR calculates 70% return, because 1/2 of your contribution returned 0% and half returned 100%.

2020-01-01 -1000
2020-07-01 -1000
2020-12-31 3000
=XIRR(B1:B3,A1:A3) 70%

So did you add the $1000 on July 1 because you are a superior investor with uncanny skill at timing the market or was it just luck? For most average people it's just luck, but as we know everyone here on RFD knows the right time to buy the dips and sell the rips. :)
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.
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Apr 21, 2004
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Went back into mostly Euro region sunlife mutual funds last week for our smallish pensions. Thank goodness Brexit trade is a done deal.
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MrMom wrote: @freilona

Does this thread get retired in 2021? I think we are well past "step 2."Christmas Tree

How about... Market Timing Step 3: How I learned to Stop Worrying and Love the Markets.*

Apologies to Stanley Kubrick.

*Only if stocks always go up of course.
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Extrapolating this. Should the world return to the way it was pre 2020, where Retail investors were more focused on their day job and other diversions vs the equity markets, will the markets lose some of it's FOMO fuel and give back some of the gains? You decide.

New Army of Individual Investors Flexes Its Muscle
Dec. 30, 2020 7:00 am ET
https://www.wsj.com/articles/new-army-o ... 1609329600

Happy New Year!
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Sr. Member
Aug 16, 2015
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MrMom wrote: Extrapolating this. Should the world return to the way it was pre 2020, where Retail investors were more focused on their day job and other diversions vs the equity markets, will the markets lose some of it's FOMO fuel and give back some of the gains? You decide.

New Army of Individual Investors Flexes Its Muscle
Dec. 30, 2020 7:00 am ET
https://www.wsj.com/articles/new-army-o ... 1609329600

Happy New Year!
Interesting so its true what they say about the robinhoodies. You just know wall street is going to figure out a way to fleece everyone.

do tfsa reset and we gain contribution room starting tomorrow?
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Aug 16, 2015
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Is anyone else getting very optimistic about Nikolas clean energy story? And also the story about the 33% short interest?
Deal Guru
Feb 9, 2009
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MrMom wrote: Extrapolating this. Should the world return to the way it was pre 2020, where Retail investors were more focused on their day job and other diversions vs the equity markets, will the markets lose some of it's FOMO fuel and give back some of the gains? You decide.

New Army of Individual Investors Flexes Its Muscle
Dec. 30, 2020 7:00 am ET
https://www.wsj.com/articles/new-army-o ... 1609329600

Happy New Year!
every fomo ends bad...this one looks very bubbly especially with these new spac stocks that will all end in pain.
[OP]
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Aug 4, 2014
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So, we finished the year with 60/40 portfolio which performed in line with VBAL (+10.32% YTD Daily Total Return)

Trailing portfolio return (time-weighted return, comparable return) as of 31/12/2020

1 month 1.3%
3 months 6.7%
6 months 10.5%
YTD 10.3%
1 year 10.3%
3 years* 7.3%
5 years* 9.1%
* Annual compound return

Happy New Year - here's to January correction in time for 2021 TFSA injections! Face With Stuck-out Tongue And Tightly-closed Eyes

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Feb 26, 2017
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I'm quite happy with my year. It was a wild ride from being down 40% to being up by 13.4% for the year. I'm 65% Canada and 35% US portfolio that is 86% individual stocks and 14% index funds and no bonds in the accounts I track. I don't track the returns of the RESPs but they're in a CCP portfolio and would close to vgro.

@freilona also updated the Boogleheads spreadsheet and am also a big fan of it.

https://www.bogleheads.org/wiki/Calcula ... al_returns

Portfolio return as of 12/31/2020
1 month 1.2%
3 months 9.2%
6 months 19.0%
YTD 13.4%
1 year 13.4%
3 years* 10.3%
5 years* 12.3%
10 years* 14.5%
* Annual compound return
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Feb 9, 2009
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Chance7652 wrote: I think Total would be time weighted and personal would be your actual XIRR/IRR rate of return. My Canadian portfolio hasn't done anything special this year either and my biggest Canadian account is up 5.3% for the year as of Dec 22nd according to TDDI. I have another Canadian account that is down 4% and one that is up around 10%. It my much smaller US portfolio that has bailed me out this year. Last year account was doing so badly that last year I created a thread about it...

how-long-give-investing-strategy-2266875/4/#p30590379

You're very close to the market's returns and one year is too short of a time period to evaluate how your doing. Its the 5 and 10 returns that I think we should be looking at. I always find this graph interesting :).

Image
Homes 3.4%...can we get a category for Vancouver and Toronto RE please?
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Feb 26, 2017
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Sanyo wrote: Homes 3.4%...can we get a category for Vancouver and Toronto RE please?
Add a extra zero to it :).
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Aug 26, 2004
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Toronto
My big regret was not selling some of my losing stocks in in March to lock in some capital gains as I have in the past. However I don’t believe in timing the market either it would be say sell a bank stock like TD to claim a loss and then buy a similar stock like RY in case the markets go up. If they do go up you are covered and can then decide to rotate back in the original stock with some tax consequences. If they down after 30 days you simply buy sell and buy back the original stocks.
freilona wrote: As most of us have heard, market timing doesn’t work since you have to be right twice: when selling and when buying. Which is next to impossible to do consistently. Yet looks like many of us keep questioning this wisdom - and want to be right at least this one time. Would love to hear from those who will be re-entering the stock market in 2020 for long-term holds - and will post my own purchases.

For the record, I turned bear-ish in the summer 2019 - here’s my post from Recession incoming! (part 2) thread:

Aug 7th, 2019 7:02 pm



At this point, I only need to decide when to repurchase IEMG and VTI in my RRSP. It’s just 10%+ of the overall portfolio, but want to use it as yet another “learning opportunity” of sane decision making in crazy times :)
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Feb 26, 2017
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mkl38s wrote: That doesn't change anything, 3.4% vs. 3.40% :)
Are you an programmer/engineer/accountant by any chance? ;)

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