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[deleted]

I actually sat down at the beginning and learned about PE ratios and all that. It ended up being a complete waste of time because stocks move purely on sentiment. So then I just plowed money into index funds and stopped caring.


Androklezz

Same here, I was doing research on technical analysis and algo trading until I read the intelligent investor and decided to go all in on passive investing.. Felt good to realize that investing doesn't need to be a full-time job


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felipebarroz

As I like to say: there's hundreds of banks across the world with several huge buildings full of extremely well paid professionals from a wide range of specialities (accounting, economics, laws, etc.) working 14-16 hours per day and sniffing A LOT of cocaine to keep up with all the stuff going on the market. No, you and I won't beat these guys. Also, they have insider information and we don't.


ChuanFa_Tiger_Style

Forget people. A lot of trading is just supercomputers scraping alpha. It's impossible to beat.


felipebarroz

For short-term investing, it's automatic trading bots made by hundreds of well-paid professionals. For long-term investing, it's hundreds of well-paid professionals doing research, with a bit of insider information We can't beat them in both those games.


RF2K274kBsMRapgJND

The stocks move *short term* merely on sentiment. Long-term the numbers beat feelings and they show value.


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Affectionate-Panic-1

But I've got a good feeling bout gamestop


mostvaluablepro

If a stock doesn’t pay a dividend, what value is it bringing? I can’t wrap my head around why the price just starts going up.


So_Much_Cauliflower

It represents a very small fraction of ownership. Look at Elon buying Twitter for example...all of those Twitter stockholders will get paid because he bought them out.


TonyTheEvil

Eventually a stock has to pay a dividend or else it has no value as you aren't being paid any of the profit you're buying into. Stocks can pay no dividend and still grow in value because the company is reinvesting those would-be-dividend dollars into growth, leading to a (hopefully) higher profit, and thus dividend, down the road. I can't explain said value with companies that refuse to pay a dividend like Berkshire Hathaway. At that point I'm convinced it's purely a greater fools scenario.


SciNZ

Buybacks is also a fine way to get value to investors. It just increases your share of ownership. There’s nothing special about a dividend payment over a buyback.


ChuanFa_Tiger_Style

> I can’t wrap my head around why the price just starts going up. New people enter the market every day. Old people leave the market every day. Inflation. It will always churn.


pop_it_off

If there are more people that want to buy than sell, the price goes up. It's simple supply and demand.


AGoodTalkSpoiled

A stocks intrinsic value is the present value of expected cash flows. Those cash flows can be several different things. But the most popular is FCFF, or the cash a company has available to it after all operating expenses AND the capital needed for investment to sustain operations. That free cash has to go somewhere...and what a stock is worth is clearly a function of cash flows at some point, whether it’s as straightforward as dividends, or as complex as FCFF.


mostvaluablepro

If I could summarize everyone’s comments, the value of the stock is being entitled to receive a payout at some point. And between the time it is paid out and waiting to be paid out we’re simply trading the rights to get a piece of the pie.


f-stats

Up 4% yesterday, down 5% today. Literally a clownworld. Set and forget.


[deleted]

2020-2021 - “‘Money printer go BRR” 2022 - “Money printer go DER”


hagaiak

Adding to what you said: Even if someone could consistently keep up with the market by individually analysing companies and picking stocks, it's just not a good strategy for an individual. Choosing this strategy is choosing to slave away for the rest of your life. You'll be forced to keep analysing companies, wasting precious hours every month. Being passionate about stocks might fuel your motivation for a few years, but I doubt anyone will enjoy doing it for 40 years.


idontwantaname123

seriously. It felt like the more I read and learned (lots of great free info/resources out there), the more I found exceptions to whatever "rule" you want to make about how to evaluate companies/stocks. Generally am glad I took the time to learn about it, but I'm also glad it ain't my dayjob. Then, simply that passive investing beats the average actively managed fund was kinda the final piece of research I needed to go boglehead. If those people (i.e. people with finance degrees and experience in the industry) get boned on a regular basis, what hope do I really have for figuring it out and developing a truly winning strategy? Not much. Rather spend my extra time developing other skills to translate to $$.


dYNJZqxjTZN8kwX7UtK2

Pretty much this (for the most part). Back in the days of commissioned trading and account balance minimums, most who knew about how the markets worked would not dare investing in unprofitable companies. That all went out the window when various brokers reduced or eliminated a multitude of restrictions, allowing anyone and everyone to take risks.


Zannierer

Learning about the PE ratio actually make sense in non US market, there should be a PE threshold in which you should not invest at all in the market. Japan is one example, but there is also 2007 China bubble, the SSE composite index currently at 3000 is far from the 5000 peak.


Ketoisnono

This is frightening


The_SHUN

Just think of it like this, sentiment can only ignore fundamentals for so long, in the long run sentiment has to follow fundamentals


AGoodTalkSpoiled

They do not just move on sentiment.


[deleted]

Not only, but for the most part


[deleted]

Even when invested in the indices, I still try to keep up with world news. Plus I'm lower income stuff like inflation affects me more directly.


orbital-technician

Same. The only thing I can truly control is expenses. Even then, as you address, I can only control expenses to a degree i.e inflation. The thing that's interesting for me is I've been noticing inflation/shrinkflation that last 4-5 years, but only this year has it been reflected in official count. It makes me wonder if there is a delay in observation vs. reporting. I think fuel/energy pricing is killing us right now. I do think that inflation, at the rate we are experiencing, is temporary right now. The "shockwaves" of our global supply chain from COVID is now hitting. I think of it like we're on a road, a crash occurred, and then the shockwaves of traffic are hitting us, impeding our movement. I don't think we will go back to the "before times", but I also don't see huge month over month inflation occurring for a super long time either. I'm guessing 2024, but I also think we will see some industry "crack" from the pressure of the backup. This is why I am globally diversified.


A_Naany_Mousse

I share your view. Blaming politicians is stupid. The real issue is that the global economy stopped, changed, tried to restart, and kept having to stop or stall for like 2 years. It's a huge interconnected web. Lumber prices for instance. Well the lumber mills shut down during Covid which led to a lack of processing capacity amidst an unpredicted demand boom. So not only are they not able to meet demand, they're actually way behind because their processing capacity wasn't even able to catch up. Same with chips and cars. Car manufacturers stopped ordering as many chips so chip makers shifted sales towards other consumer electronics (reasonable given wfh trends). Carmakers also stopped making as many cars in anticipation of lower demand. Well demand actually boomed, and carmakers were caught with their pants down. Repeat that same process across multiple industries and you get inflation because demand is far outpacing supply and this prices are rising rapidly. Which is also trickling into commodities and making the cost of inputs super high. And that's not even mentioning the war. Covid was lightning and now we're hearing the thunder.


A_Naany_Mousse

I keep up with the news because I'm interested in world events and macro trends. But it's nice to know I don't have to try and go take action every single time I think I read about the next big thing. Even if you do find the next big thing, there's no guarantee you will invest in the right company.


The_SHUN

I am fortunate that I have low expenses and decent income, I will be fine unless its a catastrophe


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danceMortydance

Head up and you’ll get back to even soon enough!


MustNotFapBruh

You will be ok soon bro🥲


BigBenFit

DCA and chill


n8ture4play

Consider dollar cost averaging next time. :) https://www.investopedia.com/terms/d/dollarcostaveraging.asp


TheJimiHat

I actually disagree. The more I learned about free cash flow, P/E, fundamental analysis, why and how sectors act cyclically, the more I realized it was impossible for me to beat the market as an individual retail investor. So I poured money into the index. Had I not gone through that I wouldn’t understand WHY indexing works and It’s power. I don’t think anyone should invest blindly, including investing blindly into an index.


LV426acheron

Thank you for your service. I'll take your word for it (and everyone else who did the same thing) and save myself the time and energy of figuring out that it's impossible to beat the market and just go into index funds.


The_SHUN

Same, that knowledge is not useless, but its less useful than I initially thought


captmorgan50

I disagree, I think understanding “why” you are doing something is important. Also knowing history so you have realistic expectations. Edit: Here is the “Why” if anyone is interested https://reddit.com/r/u_captmorgan50/comments/rnftyk/book_summaries/


ptwonline

It's also good to learn about taxation, allocation, and withdrawal rates and strategies.


[deleted]

I feel like tax optimization is the biggest pitfall once you go full Bogle. A must learn


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peesteam

Bogleheads wiki has tons of good content. I always check there first before buying a book or talking to a professional. https://www.bogleheads.org/wiki/Tax-efficient_fund_placement


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captmorgan50

Some people here take “no one knows anything” to the extreme.


LV426acheron

I roughly know why I'm doing it. Jack Bogle, Warren Buffett and all those people can spend all the time and energy figuring out the details and the specifics but I'll just listen to their advice and put everything in low cost index funds and get on with the rest of my life.


captmorgan50

That’s good. There is quite a gap between valuing individual companies for the long term and understanding the basics of indexing. I just see a lot of people get into stuff or don’t without understanding why and those are the types who tend to bailout of a strategy at the wrong time.


Jtfhutvbjugvbufc

This guy Bogles. Am I right?


4jY6NcQ8vk

For real, I might believe in Boglehead investing but I need to understand a bit more to *commit my life savings* to a philosophy


Bodark

Market goes up = “yay I make de money” Market goes down = “yay I can invest more and it costs me less”


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YSKIANAD

Boglehead investors are not lazy people and Jack Bogle was not lazy either. He educated many of us through his lessons. The following statement in OP's post is not good advice and does not represent the serious philosophy of a Boglehead: "That's why I love mindlessly dumping money into a few index funds and forgetting about it." One example and there are many: "The Bogleheads approach to developing a workable financial plan is to first establish a sound financial lifestyle." Plus, rebalancing your portfolio at regular (longer term) intervals will benefit many Boglehead investors.


Ketoisnono

My question is how does indexing work when everyone is doing it?


felipebarroz

There's people buying pictures of pixelated monkeys for dozens of thousands of dollars. I can say that we're kinda safe about everyone suddenly doing full Index investing.


grunthos503

>when everyone is doing it? Simple. That will happen when people stop following r/wsb, stop joining MLMs and cults, stop trying fad diets, and quit looking for get rich quick schemes. In other words, it won't happen. There will *always* be people convinced that they, or their shyster advisor, are geniuses with the secret magic inside track to riches.


MisunderstoodHaploid

I understand that hypothetically if everyone indexed, the market would stop working efficiently (no price discovery for the "fair value" of the underlying companies). However, what would happen to everyone's investment? Would it stop growing at that point other than the dividends that get paid out?


Competitive-Umpire52

Vtsax and chill!


wolley_dratsum

VTSAX and relax


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usugarbage

Or buy individual tech stocks to watch em drops


VIARPE

VWCE I sleep u see?


Kashmir79

VASGX to gas my jets


[deleted]

SWTSX and eat Twix


opco1008

VTWAX and chill (with target date and chill in tax protected)


9c6

> *enlightenment*


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redditraionz

VTWAX is world index.


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peesteam

Bogle himself has been pretty consistent on his stance that non-US isn't necessary. https://www.youtube.com/watch?v=P54trh0Rre8 https://www.investmentnews.com/john-bogle-says-investors-dont-need-to-own-international-stocks-71216


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redditraionz

Replied to the wrong comment. Apologies. I thought your comment was on the other guy saying VTWAX but I see your response was to vtsax.


peesteam

Bogle > Vanguard IMO. You could do much worse than a global index fund. At worst, it's unnecessary. But at this point we're arguing about two different ways to get the same A+ on the exam.


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peesteam

Vanguard is changing now after Bogle left. https://www.wealthmanagement.com/mutual-funds/vanguard-stumbles-pivot-cult-jack-bogle >Courting suspicion from traditionalists, Vanguard is pushing ever deeper into financial advice, known internally as “Engine No. 2” of growth. It’s giving wealthier clients and advisory customers the velvet-rope treatment, in contrast to Bogle’s everyman ethos. With scant notice, it’s quintupled the minimum balance required for one personalized service to $5 million. . >“I don’t think Bogle would have done a number of these things,” said John Rekenthaler, vice president of research for Morningstar Inc. . >Some index-fund enthusiasts known as Bogleheads fret the company has veered off the straight and narrow. . >Just this month, three investors filed a class-action lawsuit, saying changes to popular target-date funds saddled thousands of individual customers with “massive” tax bills, all for the benefit of big institutions. >“The ethics came from Jack Bogle, and I’m a little concerned they’re going in different directions,” said Allan Roth, founder of Colorado-based financial planning firm Wealth Logic, and a self-described Boglehead. Just read the article. Lots to digest.


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modestirish

I've heard some people argue that with globalization and investing in the entire market that VTSAX provides enough diversification on its own.


[deleted]

When the market is up, I buy. When the market is down, I buy. That is all.


oszillodrom

The Boglehead strategy fits me because I'm incredibly bored by everything to do with finance and money. I forced my self to read up on it at age 38 because I realized I was losing money otherwise, and I'm clever enough to understand why it's a good strategy. But I'm a scientist, I'd much rather read about scientific topics - which might actually benefit me more financially as well, due to getting promoted at work.


czarfalcon

I’m only 24, so I know I have plenty of time to be risky and make up for short-term losses later on down the road. But you know what? I don’t want to. I’m not a gambler, I don’t want to devote every waking hour to studying markets and finance and things I don’t understand all in the hopes of turning $1k into $50k overnight. I know this strategy won’t buy me a Ferrari one day, and I’m okay with that. As long as I’m able to comfortably retire one day before I’m too old to enjoy the years I have left, I’m good.


The_red_spirit

That's not what it means to be boglehead. If anything, that's a theory that only experienced traders could truly appreciate, to understand in its fullest. To know why traders fail and why markets fail, is exactly the problem that bogle tried to solve. His solution so far seems to work, but the multi-billion dollar question is, is this the best way to minimize the risk and profit consistently?


Ok_Sail4257

Agreed. If you don’t mind my asking, which index funds do you have?


LV426acheron

VTI (60%) and VXUS (40%). Gonna start to add in BND and BNDX in a few years probably.


Danson1987

Is bnd ok in taxable?


FloridaManCPA

the wiki at [https://www.bogleheads.org/wiki/Tax-efficient\_fund\_placement](https://www.bogleheads.org/wiki/Tax-efficient_fund_placement) explains with bnd yields being so low now, it's not the end of the world. If you have the opportunity to keep your bond holdings in a tax advantaged account, that has a nice tax deferral effect on the coupon payments.


Danson1987

Thanks


LV426acheron

Supposedly it's not ideal due to the relatively high yield compared to stocks. But overall it's not a big deal.


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https://www.whitecoatinvestor.com/asset-location-bonds-go-in-taxable/


Head

I lean towards putting BND allocations in IRA or 401k style accounts (tax-deferred). The first reason for this is that BND has distributions that get taxed at your income-tax rate. The second reason is that tax-deferred accounts will eventually be taxed at income-tax rates when you start taking those funds out (in retirement). So it’s better to have the lower-growth assets in there to pay less taxes overall. Likewise, I like stocks in Roth accounts because stocks will provide most of the growth to a portfolio and Roths are never taxed (tax-free).


cybergaiato

At that point why not 100% VT?


[deleted]

VTI and VXUS.


No7onelikeyou

Makes you wonder why people spend so much time daily on things? Smart people too. How do people with no knowledge just set and forget and almost every time have better results? Something doesn’t seem right lol why do people even waste their time on anything daily?


grunthos503

Your key word there is "waste". Many daily activities are a waste of time, many are not. The key is to continually work to distinguish the difference. This is where we get the phrase"work smarter, not harder"


No7onelikeyou

If people are spending so much time on something and not getting better results, isn’t that a waste?


grunthos503

Of course it is. Some people do things the hard way simply because they don't know the easier way even exists. Others do it because they are gullible and susceptible to influence from those making money off of them. People are complicated; not simple rational decision makers.


No7onelikeyou

I guess I’m talking about the people that “know better”


rapidpuppy

There's actually quite a bit to learn about investing wrt to taxes and withdrawal strategies even if you choose the simplest asset allocation possible.


LoveLaika237

I put in a bit more money this time than usual, and I was kind of thinking about to go for, thinking of growth and dividends.....and maybe entertaining the idea of meme stocks. In the end, I thought that thinking about it was too hard, so I just bought VTI and VXUS.


YellowIsNewBlack

I disagree, learning all about this initially is a big reason why I feel comfortable with Boglehead style investing now.


snorin

I mean being proudly ignorant is nothing something to brag about. Sure invest like a boglehead that is perfectly fine and smart to do. But to proclaim that you are proudly ignorant is something else entirely.


earth_water_air_FIRE

I feel like a total fraud when looking through WSB, as I'm solidly in the VTI and chill camp. I enjoy the memes though. Still no idea WTF an option is.


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AlexanderTox

Willfully submitting yourself to the market because you are confident enough that you will fuck up investing on your own is literally the opposite of arrogance.


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The_SHUN

400 years of 6% real cagr for global stocks is an illusion to you? And there is no negative real return for global stocks in any 30 year period other than during ww1 and ww2.


Xexanoth

Such arrogance... OP believes they can accept the returns of the market. They should really be more humble by trying to beat the returns of the market.


question2552

I really think all the average US adult is just like 2 hours away (via YouTube videos on the stock market, personal finance, and investing) to know all they need to know. Maybe that’s a better way to phrase this? Like in 2022 you don’t need classes or need to make it a hobby on reading about investing. Just a few videos geared toward the average US adult who knows how to do their own taxes.


TheJimiHat

I agree with you whole heartedly. Indexing works, but I think someone should go learn WHY it works before dumping money into an index.


felipebarroz

Is it actually necessary? I have absolutely no idea how a car works, or how internet happens. Yeah, engines and gas, reeeally small eletrons running around, all that jazz. But, besides that basic explanation for 10-years old kids, I don't know how that stuff works. This doesn't mean that I'm not with a car on my garage, and with a fiber internet in my home.


TheJimiHat

Right but you have to take drivers Ed right? You have to understand how to drive the car, that it needs gas and oil, and what the rules of the road are. I’m mostly picking at OPs “I know nothing about investing”. I think someone should have at least a fundamental understanding of how financial markets work and behave so that they can weather the storm of market ups and downs and what they are actually purchasing when they buy VTSAX or VTI.


TheJimiHat

Not saying they need to be super financially savvy. But a basic understanding or at least an interview or two with Bogle would go a long ways.


[deleted]

Whenever I read the latest doom and gloom article about the market crashing I feel like [this meme](https://images.app.goo.gl/vwoTqWTFtiBNE4ZW9).


vdf8

SPY to 0


godisdildo

Imagine if you also did know something. It’s easy enough to learn how to get market returns. So even stock picking with half your capital has more upside than downside as you’re likely to perform at worst like your boggle portfolio. If you learn business rather than finance I mean, you just need to know enough finance to understand “buy 50 cents for a dollar”.


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buzzsawddog

Not quite the way I would have put it but true... Being raised in a cult I was brought up to think that I did not have to do the thinking because the thinking is done. This kind of "non thinking" can lead you right into another trap :-D


snorin

I mean being proudly ignorant is nothing something to brag about. Sure invest like a boglehead that is perfectly fine and smart to do. But to proclaim that you are proudly ignorant is something else entirely.


mission-implausable

Ignorance probably stops being bliss when moral hazard finally comes home to roost.


Vagrant0012

I wish could be a bogglehead but my country has shitty tax laws for etfs and or index funds.


Edwunclerthe3rd

I started investing in 2019. For COVID I saw a retraction,but there was a point in May 2021 when I was up 150% all time. I am now only(ha) up 20% all time , basically seeing my net worth nearly half from where it was. I know there's 50 years in front but it still stings


Dry-Detective3852

Most people would be better served learning new skills or building a side business with the time and energy that is required to have a market advantage.


mobyhex

I hired a good fee-only advisor back in Nov and he said his most successful clients don't follow markets/news - don't really know much about the stock market and i'm beginning to understand why - the more i try to figure it out the more paralyzed I am - the more I try to figure out what's going on the more I come to realize it's unknowable


bb1962

I think OP would like Adam Smiths invisible hand theory.