In the 13 years since this thread was started, I have never really had an investment strategy that was reliable and allowed me to sleep well. When I was in my mid/late 20s, I shot for the moon with MYR. In my early 30s, I was paying off debt caused by margin calls. Finally, by mid-30s, I started to have some financial stability, but never a consistent investment strategy. I spent 2013-19 having moderate success trading bonds and temporarily buying dips in equities, but certainly underperformed a simple buy and hold strategy. I just never believed the rally would go this high or last this long.
By March 2019, nearing age 40, I wrote here that I'd had enough and was moving to cash. As my assets have grown, now over $2M, and my desire to earn an income is fading, it has become important to come up with a strategy that is reliable and allows me to sleep well.
During late Feb and early March of this year, I bought over $1M in stocks that I plan to hold through retirement. My current allocation is 70% equities, 15% commodities, and 15% bonds. Even though I bought after stocks had entered a bear market, I was still down $500K for the year at one point. That sort of decline is highly discouraging. What is the point of working and saving if you can lose it all so easily?
Remarkably, stocks have rebounded sharply and I'm at breakeven YTD. To get comfortable with the ups and downs, for planning purposes, I have started to focus on the dividend payout rather than the asset value. That's not to say I'm reaching for yield, but rather view the 3-4% yield on my ETFs (mostly value and international) as a sustainable withdrawal rate and less volatile than the price. Instead of using net worth to measure progress toward the FI goal, I'm tracking this dividend payout, with similar metrics for bonds and commodities. The goal is to visualize financial health in a way to reduces some of the daily noise, so I feel like I'm making long term progress with my savings, while taking enough risk to fund a retirement that could last several decades.
All of this is just to say that saving and investing has been a struggle for me my entire adult life. I have only had some success by earning a top 1% income and living a (merely) upper middle class life. Hopefully in the second half of life, I will become a better master of money, rather than a slave to it. This includes stopping the habit of checking stocks daily, reducing discretionary trading, becoming more generous, and relying on my investments to support my own creative efforts.