tag:blogger.com,1999:blog-6213354074634538714.post9167351719778893849..comments2023-08-03T23:30:19.645+08:00Comments on (The) Boring Investor: The Irrelevance of Time DiversificationLee Chin Waihttp://www.blogger.com/profile/10250390011842795509noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6213354074634538714.post-27483907176815675622014-11-13T23:20:20.475+08:002014-11-13T23:20:20.475+08:00Hi 15HWW,
You hit the nail on its head. "Tim...Hi 15HWW,<br /><br />You hit the nail on its head. "Time diversification" should really be about dollar cost averaging rather than investing a lump sum and having a long holding period.Lee Chin Waihttps://www.blogger.com/profile/10250390011842795509noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-10200314256070503252014-11-09T14:57:19.169+08:002014-11-09T14:57:19.169+08:00Hi Chin Wai,
Agree that we only have 1 life and 1...Hi Chin Wai,<br /><br />Agree that we only have 1 life and 1 holding period. As you have shown, market timing matters and 4.7% over 30 years make a whole lot of difference. <br /><br />If I am not wrong, dollar cost averaging the initial capital should make the variance in outcomes smaller? If one is aiming for the "average" return as a target, that should be a good strategy? My 15HWWhttps://www.blogger.com/profile/05406638167557231093noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-40608778074352590702013-07-21T12:12:15.170+08:002013-07-21T12:12:15.170+08:00Hi Ia papillion,
Yes, you're right that hold...Hi Ia papillion, <br /><br />Yes, you're right that holding the right stock at the right price is important for time compounding do its magic. We just cannot rewind back time if we hold the wrong stock or at the wrong price.Lee Chin Waihttps://www.blogger.com/profile/10250390011842795509noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-23494391145454249792013-07-19T11:54:09.942+08:002013-07-19T11:54:09.942+08:00Hi Chin Wai,
STI has survivor-ship bias. If you u...Hi Chin Wai,<br /><br />STI has survivor-ship bias. If you use individual companies, they might be long gone. In other words, I think STI is over-representing companies that survives. Usually this is not a problem, but if you're talking about 20 yrs, I think it significantly magnifies survivor-ship bias.<br /><br />I think time diversification is just one of the factor to ensure you have a good returns. The others include right timing and right value. If you're holding a stock at the right price and at the right value, time will be a good friend on your side. If not, time will expose the charlatan that the stock is. <br /><br />Time is the best stressor to test if a system is robust or fragile :)la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-39941224001273394592013-07-08T23:36:27.345+08:002013-07-08T23:36:27.345+08:00Thanks for your comments. I used the index as ther...Thanks for your comments. I used the index as there is sufficiently long data for the analysis. The reasoning applies to any type of investment. While the index may not affect our portfolios, time diversification may.Lee Chin Waihttps://www.blogger.com/profile/10250390011842795509noreply@blogger.comtag:blogger.com,1999:blog-6213354074634538714.post-37410319041041943072013-07-07T21:06:44.254+08:002013-07-07T21:06:44.254+08:00Track and measure our own portfolio performance.
...Track and measure our own portfolio performance. <br /><br />Index performance measurement is just for academic exercise.<br /><br />How relevant is the index performance affecting our bank account?<br /> <br /><br />:-)<br />CreateWealth8888https://www.blogger.com/profile/04870750974362417154noreply@blogger.com