What made you get rid of your funny money?

[DetroitRick]

Never had anything I would consider to be a funny money or gambling account. I'm unlikely to change.

I do have one account that is 100% common stock, making up about 15% of total invested assets. I've had it for 16 years, trade fairly infrequently (maybe 10-15 times yearly), research as needed, and benchmark against the equity market. It's nicely diversified and not a gambling account. Does not involve significant time, is not considered a hobby, and performs fine. That size of account makes it just about right for me to manage, without undue time burdens. For the rest....

My other invested assets, across various accounts, are a combo of mutual funds, etf's, and individual bonds. I use a combo of indexed and actively managed, with no impairment of performance.

[PicassoSparks]

My funny money is substantially outperforming my Boglehead money. That’s fine. I don’t expect it to last and I’m certainly under no illusions that I’m a brilliant stock picker.

should be "has substantially outperformed".
you know what has happened.
you don't know what will happen.
things can turn on a dime.
until and unless you lock in your wins, you're still playing what Ellis calls "The Losers Game."

No. The present tense was accurate. I didn’t make any future claim.

I have no idea what you are trying to get at re locking in wins. Why would I sell my portfolio? The whole idea is that we hold onto our portfolio (minus consumption) up to death. Do you sell your investments when they perform well? What would you buy? This is an infinite game. It cannot be won.

I think you are trying to make some kind of point about volatility, but those platitudes about things changing suddenly apply to the entire stock market. Are you imagining that I’m engaged in active trading, maybe?

This is very

[arcticpineapplecorp.]

My funny money is substantially outperforming my Boglehead money. That’s fine. I don’t expect it to last and I’m certainly under no illusions that I’m a brilliant stock picker.

should be "has substantially outperformed".
you know what has happened.
you don't know what will happen.
things can turn on a dime.
until and unless you lock in your wins, you're still playing what Ellis calls "The Losers Game."

No. The present tense was accurate. I didn’t make any future claim.

I have no idea what you are trying to get at re locking in wins. Why would I sell my portfolio? The whole idea is that we hold onto our portfolio (minus consumption) up to death. Do you sell your investments when they perform well? What would you buy? This is an infinite game. It cannot be won.

I think you are trying to make some kind of point about volatility, but those platitudes about things changing suddenly apply to the entire stock market. Are you imagining that I’m engaged in active trading, maybe?

This is very

You can't currently be outperforming the market because it's not open at the moment. So all you can really say is you've outperformed the market so far. Tomorrow is another day. Next week is another week. Next month is another month. Next year is another year. The future performance can and usually is different from the past. The first often becomes the last.

Whether you believe it or not you have to be making a claim your stock picks will continue to outperform the market otherwise you would own the market instead.

Sure the market may fall when your stocks fall but often stocks fall by greater percentages than the market does on the same days. That's the nature of making concentrated bets.

[Logan Roy]

It seems like many Bogleheads, myself included, went through a phase of separating out some “funny money” for side bets — whether it be crypto, options, individual stocks, etc.

I also read a lot about Bogleheads who are strict index investors and don’t have this allocation.

Personally, I am a little addicted to instant gratification, so a side of funny money has always been interesting to me. But seeing my VTWAX investment grow has made me consider how much consolidating my “funny money” into VTWAX would increase the number of shares I own even more. My “funny money” is only about 10% of total allocation, but still!

Bogleheads who used to have funny money and don’t anymore - what changed for you to be 100% index without exception?

After awhile, say five or ten years, either your funny-money bets pan out, or they don't. I remember being really firmly convinced that I could do better than the market, but, well, over time the evidence wasn't on my side. I merely matched (or maybe slightly beat) the market. So I stopped bothering. Spending all that time to be merely just as good felt stupid when I could spend almost zero time and be just as good.

IMHO this is different from many other hobbies. I'm never going to be a competitive cyclist, but just being out there I get to see things and talk to friends and feel physical consequences (dopamine, fitness, etc). I'm not likely to make a living on my ceramics work, but I have some sweet mugs to drink coffee out of, and the mugs themselves act as memory keys, and they make nice gifts. Whereas stocks are much less comfy, I'm even losing my nostalgia for the position I hold in my last employer, which I used to be really committed to keeping. It's just a number on a spreadsheet at this point.

I think what's interesting is that monkey portfolios (100 random stocks, equally weighted) have, on average, beaten the market (seemingly even in risk-adjusted terms).

The problem may be that whatever research and screening an investor does, it's probably leading to the same broad conclusions as every other active investor – 'this is a value opportunity', 'this is a quality company', etc. And that effect may explain alpha (positive and negative) better than anything. The rule is that you can't generate alpha without adding information to the system. And as most investors are unlikely to have information the market doesn't, our interaction with alpha is more likely to come down to piling into information 'bubbles' that too many investors are bidding up.

[PicassoSparks]

Whether you believe it or not you have to be making a claim your stock picks will continue to outperform the market otherwise you would own the market instead.

It is incredibly presumptuous and rude to presume to tell me my motivations. Please stop.

The OP asked a question. I answered it. I have no idea why you singled my reply out to teach some lesson.

[ralph124cf]

Definitions:

Fun money is money that you gamble with, in stocks of a casino.

Funny money is cash from countries that are no longer countries, such as Iraqi dinars and South Vietnamese piasters. I also have money from several other defunct countries, and some that simply no longer honor their former currency.

Ralph

[CyclingDuo]

It seems like many Bogleheads, myself included, went through a phase of separating out some “funny money” for side bets — whether it be crypto, options, individual stocks, etc.

I also read a lot about Bogleheads who are strict index investors and don’t have this allocation.

Personally, I am a little addicted to instant gratification, so a side of funny money has always been interesting to me. But seeing my VTWAX investment grow has made me consider how much consolidating my “funny money” into VTWAX would increase the number of shares I own even more. My “funny money” is only about 10% of total allocation, but still!

Bogleheads who used to have funny money and don’t anymore - what changed for you to be 100% index without exception?

We have a garden where all of our funny money goes. Due to all of the funny money going towards buying the plants/seeds, watering, fertilizer, pruning, time and effort we put into it - it's literally the most expensive food we have ever eaten.

At some point we'll learn our lesson and go back to index eating (buying our produce at the grocery store and famers markets).

[bogledogle87]

It had no objective purpose and, as it turns out, it wasn't that fun or entertaining watching it underperform the rest of my portfolio.

[wander]

When funny money was small enough for me to care, I dropped it.