"The Most Successful Investors Leave Their Money Alone"

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Taylor Larimore
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"The Most Successful Investors Leave Their Money Alone"

Post by Taylor Larimore »

Bogleheads:

Excerpts from a Boglehead-type article in today's Yahoo's Finance Page:
"My advice to the trustee could not be more simple: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund." -- Warren Buffett"

"After analyzing portfolios held by 325,000 users, the robo-adviser found something interesting: The most successful investors in the group were also the least active."

"Broad, relatively conservative investments like index funds and ETFs, if left largely alone, can be lucrative."
THE MOST SUCCESSFUL INVESTORS LEAVE THEIR MONEY ALONE

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Toons
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by Toons »

Taylor Larimore wrote:Bogleheads:
Excerpts from a Boglehead-type article in today's Yahoo's Finance Page:

"My advice to the trustee could not be more simple: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund." -- Warren Buffett"

"After analyzing portfolios held by 325,000 users, the robo-adviser found something interesting: The most successful investors in the group were also the least active."

" Broad, relatively conservative investments like index funds and ETFs, if left largely alone, can be lucrative."
THE MOST SUCCESSFUL INVESTORS LEAVE THEIR MONEY ALONE

Best wishes.
Taylor
+1 Very true , or as I have heard before ,tend to your portfolio like you would a "cactus" plant. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by stemikger »

Thanks Taylor. Lord knows I need this advice and it is one of my main New Year's resolutions.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by Taylor Larimore »

stemikger wrote:Thanks Taylor. Lord knows I need this advice and it is one of my main New Year's resolutions.
stemikger:

"The Most Successful Investors Leave Their Money Alone" is a good resolution for most of us.

Happy New Year!
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by nedsaid »

There are at least three reasons I can think of that make this true. First, the transaction costs that investors pay every time they make a trade. Second, incorrect buy/sell decisions. How many times have I posted that the best way to make an investment go up is to sell it!! This squares with an article by Larry Swedroe that said that investors tended to trail the market with their initial picks of individual stocks but then compounded this when what they sold outperformed what they bought it the first place. The third reason is that investors are prone to performance chase. We all know how that goes.

An independent broker who I work with on part of my retirement portfolio has made similar comments. He said, "My clients who leave their portfolios alone tend to do better than those who tinker." He also once sent me a synopsis of the Brinson, Beebower, and Hood study on the performance of pension funds. The allocation of asset classes was the big driver of performance and that market timing and security selection detracted from returns. I have to commend him for his honesty.

This is why I am cautious even about rebalancing. Every time I make a buy/sell decision, even when rebalancing, I know that the odds are pretty good that I will be wrong. My portfolio has changed over the years since 2000, but the changes have been gradual and with a lot of thought behind them. I am painfully aware of what Taylor Larimore is talking about.
Last edited by nedsaid on Sun Oct 04, 2015 10:25 am, edited 1 time in total.
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steve roy
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by steve roy »

Along the same lines: Fidelity did a study showing that Fidelity's most successful investors were those who had forgotten they had an investment account at Fidelity.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by PeanutButterIsJelly »

By golly, just leave it alone.If your asset allocation aligns with your risk appetite, then you won't be bothered with the day to day machinations of the stock market and it's Wall Street marketing machine.

I remember during this past summer I was channel surfing and skimmed by CNBC.....the news was grim. The market was approaching the end of days, "analysts" agreed we were due for heavy turbulence. Two days later, strike up the band, "analysts" agreed that the good times were here again and their dire predictions from 2 days ago were entirely forgotten.

What's my point? Just spend the time getting your AA right and then do not meddle with it at all costs. Don't check the market everyday, don't follow tea leaf readers, tune out the cable television noise, and go and enjoy your life. Learn a new skill, take on a new hobby, exercise, but whatever you do don't go and meddle with your portfolio. :moneybag

Great post, Taylor.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by harryw »

steve roy wrote:Along the same lines: Fidelity did a study showing that Fidelity's most successful investors were those who had forgotten they had an investment account at Fidelity.
Well, that sure flies right into the face of their advisory service, who just LOVE to trade. Thanks for the link; forwarded to somebody who should pay attention!
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by TheTimeLord »

So time to swear off rebalancing? BTW, I agree with the premise 100%, except maybe like Mr. Bogle when valuations are extremely stretched.
Last edited by TheTimeLord on Sun Jan 04, 2015 11:17 am, edited 1 time in total.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by TheTimeLord »

harryw wrote:
steve roy wrote:Along the same lines: Fidelity did a study showing that Fidelity's most successful investors were those who had forgotten they had an investment account at Fidelity.
Well, that sure flies right into the face of their advisory service, who just LOVE to trade. Thanks for the link; forwarded to somebody who should pay attention!
Probably be more effective if you had a link to the study instead of a post on a forum.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by tfb »

nedsaid wrote:There are at least three reasons I can think of that make this true.
steve roy wrote:Along the same lines: Fidelity did a study showing that Fidelity's most successful investors were those who had forgotten they had an investment account at Fidelity.
I'm guessing another reason is that those who leave it alone or who forgot they had an account on average have a higher percentage invested in stocks. A recent thread about a 92-year-old with 90% in stocks comes in mind. When you don't know you have an account, you are able to tolerate whatever fluctuation it experiences.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by galeno »

Three excellent ways to hold the FTSE all world equity index:

1. 100% VT (ER=0.18%)
2. 50% VTI + 50% VXUS (ER=0.10%)
3. 50% SCHB + 40% SCHF + 10% SCHE (ER=0.07%)

IMHO the simplicity of VT is worth paying 8-11 bps more. No worries about how much USA vs non-USA. No worries about tilting.
KISS & STC.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by montanagirl »

What if, you're perfectly willing to leave it alone, but still need to get it set up just right first? :wink:
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by Toons »

steve roy wrote:Along the same lines: Fidelity did a study showing that Fidelity's most successful investors were those who had forgotten they had an investment account at Fidelity.
Excellent :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by ZumZabo »

Mr, Larimore
I am a new member but a long time reader. I have only done a couple of drive by posts since I have registered. I thank you for this post and countless others I have read through the years as well as your contribution to The Bogleheads Guide to Investing. I am and have been simplifying my life and portfolio greatly with a lot of knowledge and inspiration from you. I've done very well for myself but have also achieved a black belt in mistake making along the way. I look back at some of the changes and tweeking I have done and I know how much better off I would be if I just picked a 2 or 3 fund portfolio and just kept contributing to it. To quote a very learned colleague of mine " Kid, if you're gonna be dumb, you gotta be tough". I have some big gains in taxable which makes it difficult to position myself exactly where I want to be in the realm of simplicity but I am 80% there. I may ask for advice in this area in a subsequent post. For now please accept my gratitude for being an example that it possible to invest and live simply.
What makes me think I could start clean slated? The hardest to learn was the least complicated: Emily Saliers / And if I claim to be a wise man, it surely means that I don't know: Kerry Livgren
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by ccieemeritus »

The irony is, the more books on personal finance I read and the more knowledgeable I become, the less there is for me to do. Now I just buy index funds and hold them till retirement. Boring!

I guess I'd improve my investment returns by not buying any more personal finance books.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by flyingaway »

The most successful investors should be market timers. However, most market timers are not successful investors.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by ZumZabo »

"Don't just do something, stand there!"
Charles Ellis, "Winning the Loser's Game"

I wish I would have internalized this advice 20 years ago.
What makes me think I could start clean slated? The hardest to learn was the least complicated: Emily Saliers / And if I claim to be a wise man, it surely means that I don't know: Kerry Livgren
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by richard »

nedsaid wrote:There are at least three reasons I can think of that make this true. First, the transaction costs that investors pay every time they make a trade. Second, incorrect buy/sell decisions. How many times have I posted that the best way to make an investment go up is to sell it!! This squares with an article by Larry Swedroe that said that investors tended to trail the market with their initial picks of individual stocks but then compounded this when what they sold outperformed what they bought it the first place. The third reason is that investors are prone to performance chase. We all know how that goes.
Remember that there are two sides to every trade. Investors as a whole can not lose money by market timing, performance chasing, etc., other than fees and other costs.
nedsaid wrote:<>This is why I am cautious even about rebalancing. Every time I make a buy/sell decision, even when rebalancing, I know that the odds are pretty good that I will be wrong. My portfolio has changed over the years since 2000, but the changes have been gradual and with a lot of thought behind them. I am painfully aware of what Taylor Larimore is talking about.
There are approximately two reasons you might rebalance. The first is the market has moved (the overall market split between stocks and bonds has changed and the change in your portfolio reflects this) and the second is some other reason. A good argument can be made against rebalancing for the first reason. William Sharpe is a proponent of this point of view, largely on efficient market type grounds. Note that if you started at 50/50, you're highly unlikely to go outside 60/40 to 40/60. However, it's harder to argue against rebalancing in other circumstances.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by richard »

darrellr wrote:The irony is, the more books on personal finance I read and the more knowledgeable I become, the less there is for me to do. Now I just buy index funds and hold them till retirement. Boring!
It's an interesting phenomenon, isn't it. I also found the more proficient I got at sophisticated data analysis, the less utility I found in sophisticated data analysis.
darrellr wrote:I guess I'd improve my investment returns by not buying any more personal finance books.
:D
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by Levett »

"I guess I'd improve my investment returns by not buying any more personal finance books."

Ain't that the truth!

Lev
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by steve r »

darrellr wrote:The irony is, the more books on personal finance I read and the more knowledgeable I become, the less there is for me to do. Now I just buy index funds and hold them till retirement. Boring!

I guess I'd improve my investment returns by not buying any more personal finance books.
+1
Perfect Comment :P
Same with the getting better with data comment.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by nedsaid »

richard wrote:
nedsaid wrote:There are at least three reasons I can think of that make this true. First, the transaction costs that investors pay every time they make a trade. Second, incorrect buy/sell decisions. How many times have I posted that the best way to make an investment go up is to sell it!! This squares with an article by Larry Swedroe that said that investors tended to trail the market with their initial picks of individual stocks but then compounded this when what they sold outperformed what they bought it the first place. The third reason is that investors are prone to performance chase. We all know how that goes.
Remember that there are two sides to every trade. Investors as a whole can not lose money by market timing, performance chasing, etc., other than fees and other costs.
nedsaid wrote:<>This is why I am cautious even about rebalancing. Every time I make a buy/sell decision, even when rebalancing, I know that the odds are pretty good that I will be wrong. My portfolio has changed over the years since 2000, but the changes have been gradual and with a lot of thought behind them. I am painfully aware of what Taylor Larimore is talking about.
There are approximately two reasons you might rebalance. The first is the market has moved (the overall market split between stocks and bonds has changed and the change in your portfolio reflects this) and the second is some other reason. A good argument can be made against rebalancing for the first reason. William Sharpe is a proponent of this point of view, largely on efficient market type grounds. Note that if you started at 50/50, you're highly unlikely to go outside 60/40 to 40/60. However, it's harder to argue against rebalancing in other circumstances.
Thank you for your comments. The reason I am very cautious about trades is that I know there is at least a 50/50 chance that I will be wrong on a trade. The odds are probably lower than that. My guess is that I was 30% to 40% correct on my buy/sell decisions. My suspicion is that holds true for most individual investors. Trading costs have come down a lot, what really drags returns down are the incorrect buy/sell decisions.

Yes, I know that as a group investors buy and hold the market. Individual investors get burned by performance chasing. They also get burned because they aren't necessarily trading with other naïve individuals but with the big institutions. If the individual tries the trading game, he or she is usually out-brained by experienced market professionals with Masters' Degrees (some firms hire Math PhD's) and outgunned by faster and better computers and software. Not saying it can't be done, but most individuals aren't going to win at this.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by JRA »

Rebalancing is about controlling risk, not maximizing returns. In a rising market, leaving one's equities alone will certainly lead to higher returns but with significantly higher risk. If I were Warren Buffet and could easily live on the dividends of equities that had declined 90%, I wouldn't worry about rebalancing either. Unfortunately, I am not in that position and have to control risk. The prudent course of action is only to take risk when one needs to take risk.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by Dave55 »

Taylor Larimore wrote:Bogleheads:

Excerpts from a Boglehead-type article in today's Yahoo's Finance Page:
"My advice to the trustee could not be more simple: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund." -- Warren Buffett"

"After analyzing portfolios held by 325,000 users, the robo-adviser found something interesting: The most successful investors in the group were also the least active."

"Broad, relatively conservative investments like index funds and ETFs, if left largely alone, can be lucrative."
THE MOST SUCCESSFUL INVESTORS LEAVE THEIR MONEY ALONE

Best wishes.
Taylor
THANKS TAYLOR! After years of chasing better returns, I am now hardly working at doing nothing!
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by Silence Dogood »

When I funded my Roth IRA the other day (maxed out 2015 contribution on the 2nd), I reviewed my transaction history and was happy to notice that, other than distributions each December (which are automatically reinvested) the only other transactions over the past few years have been contributions in January. I'm all in Target Retirement 2055.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by steve roy »

TheTimeLord wrote:
harryw wrote:
steve roy wrote:Along the same lines: Fidelity did a study showing that Fidelity's most successful investors were those who had forgotten they had an investment account at Fidelity.
Well, that sure flies right into the face of their advisory service, who just LOVE to trade. Thanks for the link; forwarded to somebody who should pay attention!
Probably be more effective if you had a link to the study instead of a post on a forum.
You're right. The reference comes from an interview between Barry Ritholtz and financial advisor James O'Shaughnessy in a radio interview. I've linked it in another thread. I'll link it again when I have a bit more time.

Add On: Here's the link to the Business Insider article:

http://www.businessinsider.com/forgetfu ... est-2014-9

Sadly, it doesn't provide a link to the Fidelity study Mr. O'Shaughnessy is referencing.
Last edited by steve roy on Mon Jan 05, 2015 12:48 pm, edited 1 time in total.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by magneto »

Some thoughts :-

"SigFig finds that investors who trade frequently — defined as "investors who have a turnover amount equal to or greater than their portfolio value in a year" — actually see lower returns than their peers who are more hands-off."

1. Surely a select bunch of idiots, or geniuses. Not typical investors, therefore a straw man?

2. Would we say that a US investor who reduced their stock holdings in 1999 in response to valuations, and then loaded up in 2008/9 when stocks were on sale, did worse than the investor who simply held (or rebalanced)?

3. How would such comments help the Japanese investor who held since 1989?

While set and rebalance, stay the course, etc, is a great philosophy and gives good returns, and will accordingly be in our instructions to our heirs, would never advocate that it gives the best returns.

All Best and a Prosperous 2015.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by abyan »

Actually, as for it only being a "select bunch of idiots," my local evil broker who shall not be named was trading an amount equal to my account on an annual basis. And I googled and found out that that's far below the limit for "churning," which is around, I read, 3x your account value. So, I'm not so sure that's such a select group.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by richard »

magneto wrote:Some thoughts :-

"SigFig finds that investors who trade frequently — defined as "investors who have a turnover amount equal to or greater than their portfolio value in a year" — actually see lower returns than their peers who are more hands-off."

1. Surely a select bunch of idiots, or geniuses. Not typical investors, therefore a straw man?
"Managed mutual funds have an average turnover rate of approximately 85%, meaning that funds are turning over nearly all of their holdings every year. Many funds, in fact, have turnover ratios of more than 100%, meaning their average holding period for a stock is less than one year." http://www.fool.com/School/MutualFunds/ ... rnover.htm
magneto wrote:2. Would we say that a US investor who reduced their stock holdings in 1999 in response to valuations, and then loaded up in 2008/9 when stocks were on sale, did worse than the investor who simply held (or rebalanced)?
Rebalancing most likely would have led to reducing stock holdings in 1999 and increasing 2008/9
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by abuss368 »

Great information! It just begs the question: why clutter up a portfolio with High Yield, TIPS, International Bonds, Emerging Markets equity and debt, etc? Why not a simple Target or Life Strategy fund or a couple /few index funds?
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by selftalk »

The Fidelity study indicated that the most successful investors were the ones that were dead and secondly were the ones who left it alone.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by nedsaid »

If successful investors leave their money alone, what is there for a robo-advisor to do?
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by zengolf2011 »

Thank you, Taylor, your posts do all of us a great service. Reminds me of a sign over our OR before I retired: "Better is the enemy of good." Endless tinkering just diminishes returns and increases the odds of failure. We only need to do a couple of big things right (sensible saving, broad diversification, low investment costs) to succeed.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by selftalk »

Be your own robo advisor and allocate the 3 fund portfolio recommended here on this website according to your emotions and "DON`T PEEK." That`ll do it as good as a person can. I have never met anyone who made a lot of money playing the market but I have met numerous people who invested in funds and individual companies and left it alone and made very large gains over the years due to compounding.
Last edited by selftalk on Sun Oct 04, 2015 10:18 am, edited 1 time in total.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by dodecahedron »

nedsaid wrote:There are at least three reasons I can think of that make this true. First, the transaction costs that investors pay every time they make a trade. Second, incorrect buy/sell decisions. How many times have I posted that the best way to make an investment go up is to sell it!! This squares with an article by Larry Swedroe that said that investors tended to trail the market with their initial picks of individual stocks but then compounded this when what they sold outperformed what they bought it the first place. The third reason is that investors are prone to performance chase. We all know how that goes.
A fourth reason is tax consequences. If any of your investments are in taxable accounts, leaving those investments alone allows capital gains taxes to be deferred (and possibly avoided forever if the assets are held until death and/or charitable donation.) (Nod to livesoft: possible exception for TLH.)
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by malabargold »

The old and oft-attributed " bar of soap" analogy.
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nedsaid
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by nedsaid »

So how have I actually practiced what I have preached? It is a mixed picture.

I brought up my retirement portfolio as it was at year end 1999.

I had 15 stocks in a brokerage IRA and three of them I still own. A fourth was recently sold, it was a local insurance company that received a buyout offer from a Japanese insurance firm. I held that stock for 16 years. The two mutual funds that I owned in this account are still there. I now have 16 stocks in that account. I haven't calculated my average holding period for stocks but it certainly is well over five years.

The funds that I owned at my favorite mutual fund company in 1999 are mostly still there. I owned 10 funds there, of those I still hold seven. Two of the ten were mid-cap stock funds that were merged into one in recent years. One was a bond fund that changed names. Out of the 10, only one was sold because I was dissatisfied with it.

I started a new job in 1999, and the three funds I started with at my workplace savings plan are all still there.

A small variable annuity that I own still has two of the three funds that I had then.

I had three DRIP plan stocks, I still own all three and now I have four.

So mostly what I did was mostly keep what I had and as my portfolio got larger, I branched out. I built upon what I had before. But yes, I admit that I tinkered. I just can't resist. I will have to join a support group for that. The one thing I did right was relatively long holding periods for my investments. I tend to buy good stuff and keep it. I didn't do much trading but over many years a portfolio can change a lot with incremental small changes over time.

I made changes and adjustments as I learned more.
A fool and his money are good for business.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by Maynard F. Speer »

Well (just to be a fly in the ointment) have stock market returns been that good so far this century?

With 50:50 US and international, you'd have averaged about 3.5% nominal(?) ... You could (rightly) argue I'm choosing a start-point of high valuations, but of course the US market also looks due a correction - if it mean reverts from today's PE10 of 27, to 16, I think you might be looking at 30 years of close-to-zero real returns

Say we get another 15-20% correction, have the most successful investors simply been the ones who chose not to play? .. Obviously we know most investor behaviour is destructive - so as a whole the less active will do better .. But are you doomed to be in the destructive camp? Can you pat yourself on the back for receiving a fair share of nothing?

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Re: "The Most Successful Investors Leave Their Money Alone"

Post by malabargold »

Yes. No question.
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arcticpineapplecorp.
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by arcticpineapplecorp. »

selftalk wrote:The Fidelity study indicated that the most successful investors were the ones that were dead and secondly were the ones who left it alone.
Correct, "Fidelity's best investors are dead":
http://theconservativeincomeinvestor.co ... -are-dead/
http://www.businessinsider.com/forgetfu ... est-2014-9

And the Barry Ritholtz interview with James O'Shaughnessy was mentioned in the above link.
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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nedsaid
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by nedsaid »

arcticpineapplecorp. wrote:
selftalk wrote:The Fidelity study indicated that the most successful investors were the ones that were dead and secondly were the ones who left it alone.
Correct, "Fidelity's best investors are dead":
http://theconservativeincomeinvestor.co ... -are-dead/
http://www.businessinsider.com/forgetfu ... est-2014-9

And the Barry Ritholtz interview with James O'Shaughnessy was mentioned in the above link.
Buying the good stuff and keeping it to me is the key to whatever investment success that I have had. Patience is a virtue particularly in the investment world.
A fool and his money are good for business.
jfave33
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by jfave33 »

Maynard F. Speer wrote:Well (just to be a fly in the ointment) have stock market returns been that good so far this century?

With 50:50 US and international, you'd have averaged about 3.5% nominal(?) ... You could (rightly) argue I'm choosing a start-point of high valuations, but of course the US market also looks due a correction - if it mean reverts from today's PE10 of 27, to 16, I think you might be looking at 30 years of close-to-zero real returns

Say we get another 15-20% correction, have the most successful investors simply been the ones who chose not to play? .. Obviously we know most investor behaviour is destructive - so as a whole the less active will do better .. But are you doomed to be in the destructive camp? Can you pat yourself on the back for receiving a fair share of nothing?
Yes having a high start point makes a big difference plus this is the only investment made. If you assume this particular investor adds $1k a year throughout the period (as most people would contribute annually) the picture is very different.

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pkcrafter
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by pkcrafter »

stemikger wrote:Thanks Taylor. Lord knows I need this advice and it is one of my main New Year's resolutions.
Stemikger, last new year or next new year? :happy


Article on an academic study that finds the same thing.

http://www.behaviouraldesign.com/2015/0 ... XapPm.dpbs

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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Taylor Larimore
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"The Most Successful Investors Leave Their Money Alone"

Post by Taylor Larimore »

Mr. Bogle has been telling us this for many years. In his classic book, Common Sense on Mutual Funds, Mr. Bogle wrote:
Stay the course. No matter what happens, stick to your program. I've said "Stay the course" a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to you. (underline mine)
Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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abuss368
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by abuss368 »

Thanks Taylor!
John C. Bogle: “Simplicity is the master key to financial success."
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stemikger
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by stemikger »

pkcrafter wrote:
stemikger wrote:Thanks Taylor. Lord knows I need this advice and it is one of my main New Year's resolutions.
Stemikger, last new year or next new year? :happy


Article on an academic study that finds the same thing.

http://www.behaviouraldesign.com/2015/0 ... XapPm.dpbs

Paul
lol. It's anyone's guess at this point. lol
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
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oldzey
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Re: "The Most Successful Investors Leave Their Money Alone"

Post by oldzey »

Toons wrote:
Taylor Larimore wrote:Bogleheads:
Excerpts from a Boglehead-type article in today's Yahoo's Finance Page:

"My advice to the trustee could not be more simple: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund." -- Warren Buffett"

"After analyzing portfolios held by 325,000 users, the robo-adviser found something interesting: The most successful investors in the group were also the least active."

" Broad, relatively conservative investments like index funds and ETFs, if left largely alone, can be lucrative."
THE MOST SUCCESSFUL INVESTORS LEAVE THEIR MONEY ALONE

Best wishes.
Taylor
+1 Very true , or as I have heard before ,tend to your portfolio like you would a "cactus" plant. :happy
+1 to Toons' quote.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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