From Simplicity to Complexity

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bck63
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Joined: Fri Sep 28, 2018 4:59 pm

From Simplicity to Complexity

Post by bck63 » Fri Jun 14, 2019 4:24 pm

I have noticed something about myself, and am wondering if I'm alone. I learned about the Boglehead way of investing about two years ago. Since then, I've sold all my individual stocks, am invested in only index funds (with small and temporary exceptions; see below), and have developed an asset allocation that works for me.

This seems like the best course. Yet, I am constantly tempted to "find an angle," to reach for yield, to potentially mess things up. I bought an expensive and risky junk-bond fund (a small amount that I will get out of in 30 days); a REIT fund (again, just got started and am going to sell it), a higher yielding municipal income fund (already out of that), and I guess that's about it.

I know these are not the best way to go, but I constantly have this temptation. Can anyone relate? And how have others effectively dealt with this tendency? Despite the temptations, I am continuing to stay the course.

Hockey10
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Location: Philadelphia suburbs

Re: From Simplicity to Complexity

Post by Hockey10 » Fri Jun 14, 2019 4:32 pm

Don't log into your brokerage account during weekdays when the market is open. This may reduce some of the temptation for you.

Broken Man 1999
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Re: From Simplicity to Complexity

Post by Broken Man 1999 » Fri Jun 14, 2019 4:48 pm

Hockey10 wrote:
Fri Jun 14, 2019 4:32 pm
Don't log into your brokerage account during weekdays when the market is open. This may reduce some of the temptation for you.
If your activities are causing such issues you might want to sign up with a Vanguard advisor. It is cheap enough, probably cheaper than you fiddling around with your portfolio.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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HomerJ
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Re: From Simplicity to Complexity

Post by HomerJ » Fri Jun 14, 2019 4:53 pm

bck63 wrote:
Fri Jun 14, 2019 4:24 pm
I have noticed something about myself, and am wondering if I'm alone. I learned about the Boglehead way of investing about two years ago. Since then, I've sold all my individual stocks, am invested in only index funds (with small and temporary exceptions; see below), and have developed an asset allocation that works for me.

This seems like the best course. Yet, I am constantly tempted to "find an angle," to reach for yield, to potentially mess things up. I bought an expensive and risky junk-bond fund (a small amount that I will get out of in 30 days); a REIT fund (again, just got started and am going to sell it), a higher yielding municipal income fund (already out of that), and I guess that's about it.

I know these are not the best way to go, but I constantly have this temptation. Can anyone relate? And how have others effectively dealt with this tendency? Despite the temptations, I am continuing to stay the course.
Sad to say, checking into Bogleheads sure isn't helping any more these days. Half the threads on the investing boards are about trying to "find an angle".

Just buy and hold, stay the course. Ignore the noise. Even the noise here.

There is no perfect plan. "Good enough" will still make you rich.
The J stands for Jay

longinvest
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Re: From Simplicity to Complexity

Post by longinvest » Fri Jun 14, 2019 5:14 pm

bck63 wrote:
Fri Jun 14, 2019 4:24 pm
And how have others effectively dealt with this tendency? Despite the temptations, I am continuing to stay the course.
After I discovered the Bogleheads, I learned a lot. This lead to a series of portfolio changes. Each change (most very small) was fully justified. I eventually realized that if I continued this approach, it would never end because I would always find a new detail to improve. I also saw that rebalancing a portfolio would remain a challenge for my wife. So, we took a radical turn. We selected an all-in-one Vanguard ETF closest to our previous asset allocation (similar to a Vanguard LifeStrategy fund) and moved all of our money into it. My wife and I now only need to add money regularly to our portfolio. No maintenance is required because it's automatically rebalanced. This move removed all temptations to improve something. It was the ultimate good enough portfolio for us.

Your mileage may vary.
Bogleheads investment philosophy | single-ETF balanced portfolio | VBAL

Better2bWise
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Location: Columbus, Ohio

Re: From Simplicity to Complexity

Post by Better2bWise » Fri Jun 14, 2019 5:25 pm

Average is a hard thing to accept because we hope to be number 1 or able to do better in most things in our life.

Perfectionism is a mirage because the finish line keeps moving. The more you read, the more you are tempted to create a new standard of perfect.

Contentment and enough is a hard concept to stay with. I haven't read the book but John Bogle did write a book named Enough. Maybe it will help your desire to keep doing more with your allocation.

nix4me
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Re: From Simplicity to Complexity

Post by nix4me » Fri Jun 14, 2019 6:27 pm

Easy fix.

1. Make sure all contributions are automated - each week/month auto transfer from checking to investment account.
2. Go to account website and enter wrong password like 10 times until it locks you out.
3. Wait until the day you officially retire, call them to reset account, log in and be shocked!

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Sandtrap
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Re: From Simplicity to Complexity

Post by Sandtrap » Fri Jun 14, 2019 6:41 pm

Great tips thus far.

You can also set aside a certain dollar valuation to "play" with.
Not "mad money", but to experience the cause and effect of various changes, not with the portfolio, but with that fund or stock.
For example: the REIT, or MUNI that you messed around with. Fine. Track it. See that things don't matter over a short time. But, limit the valuation to something that you can afford to lose.

If you have to scratch an itch, scratch it, but keep it a little one, far away . . . like on the back of the little toe. :shock:
Wiki Bogleheads Wiki: Everything You Need to Know

RadAudit
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Location: Second star on the right and straight on 'til morning

Re: From Simplicity to Complexity

Post by RadAudit » Fri Jun 14, 2019 6:43 pm

bck63 wrote:
Fri Jun 14, 2019 4:24 pm
I have noticed something about myself, and am wondering if I'm alone. I learned about the Boglehead way of investing about two years ago. Since then, I've sold all my individual stocks, am invested in only index funds (with small and temporary exceptions; see below), and have developed an asset allocation that works for me.

This seems like the best course. Yet, I am constantly tempted to "find an angle," to reach for yield, to potentially mess things up.
No. You are not alone. The urge to mess things up is so pervasive among us humans that something similar was noticed by Warren Buffett, IIRC -
There seems to be some perverse human characteristic that likes to make easy things difficult.


Don't do it.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

samstar
Posts: 52
Joined: Wed Jul 25, 2018 12:34 am

Re: From Simplicity to Complexity

Post by samstar » Fri Jun 14, 2019 6:45 pm

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Last edited by samstar on Thu Jul 11, 2019 2:20 am, edited 1 time in total.

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arcticpineapplecorp.
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Re: From Simplicity to Complexity

Post by arcticpineapplecorp. » Fri Jun 14, 2019 6:52 pm

don't know if this helps, but I think Rick Ferri summed it up nicely:

Rick Ferri has described the investor's eductional endeavors to generally follow the following path (viewtopic.php?t=250534) :
A successful index fund investor goes through four phases:
1) Darkness - takes advice from everyone;
2) Enlightenment - realizes a market return is superior to their return;
3) Complexity - overdoing everything to find optimal;
4) Simplicity - invests in a few total market funds

source: https://twitter.com/rick_ferri/status/9 ... 89?lang=en
Perhaps you think you're in the simplicity phase, but are really in the enlightenment phase, but are being drawn to complexity. I was too when I first read Bernstein's Four Pillars and Intelligent Asset Allocator and started listening to Paul Merriman. I never went that route of slicing and dicing and instead decided to keep it simple. I'm glad I did, because I think as Rick has found, I probably would have ended up there after spending years making my portfolio more complex.

why not realize it and skip step 3 and move right to step 4 and get on with life?
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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