End Game - Deepstash

End Game

  • The win condition is to have 20-25 times your annual cash flow needs in assets
  • If you win, quickly shift your core investments to low-risk categories
  • Delaying Social Security to age 70 can greatly reduce your cash-flow needs later in life
  • If it looks like you aren't going to win, reduce your cash flow needs

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The Ages of the Investor

by William J. Bernstein

MORE IDEAS FROM THEBOOK

  • Human capital outweighs investment capital
  • As such, you can take aggressive risks
  • But, you are probably too risk-adverse
  • It's better to limit stock exposure to 50% until you know how you will react in a crash
  • If you can hold on, or even buy more while the market is down, increase your exposure
  • The most import thing is to save and invest like your life depends upon it

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  • Lump-sum: the timing of market peaks and troughs do not matter so long as the general trend is upwards
  • Periodic contributions: it is best for the market to sustain heavy losses early in your investments (cheap stocks) and high gains later

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  • The trickiest stage / most dependent on luck
  • Transition assets into a passive income stream
  • Watch closely for the win condition
  • Do not stop saving and investing

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RELATED IDEAS

Investing is not magic. Remember that ...

  • most people don't invest at all
  • 75% of new traders quit within the first 3 months. 
  • 90% of new traders quit within the first 6 months. 

If you can stick around long enough and keep learning, you will be successful at this game. Learn the basics and practice. 

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Growth & Value ETFs

An exchange traded fund (ETF) is a type of security that tracks an index, sector, etc... but which can be purchased or sold as a regular stock:

  • Value ETFs invest primarily in companies considered undervalued, using (P/E) ratio.
  • Growth ETFs invest in companies with a potential for rapid growth, rather than a cheap price. 

Growth ETFs have a higher upside potential, as they are created to outperform the market. They are also more volatile, which makes them more suited for young people who can live past downturns.

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The 5 BEST Growth ETFs That Can Make You MILLIONS (2021)

The 5 BEST Growth ETFs That Can Make You MILLIONS (2021)

Humphrey Yang

The Buffet Indicator

The Buffett Indicator is the ratio of total the United States stock market valuation to GDP. It is said to be the best predictor of market corrections or crashes. 

As of May 6, 2021:

  • Aggregate US Market Value: $51.8T
  • Current Quarter Annualized GDP: $22.6T
  • Buffett Indicator: $51.8T ÷ $22.6T = 229%

Historically, when the stock market went above GDP by 50-100% it crashed, going below GDP. 2021 is the year in the last 100 years when the ratio was over 2x the largest stock market in history.

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Cathie Wood: Time To Sell Stocks?

Cathie Wood: Time To Sell Stocks?

Investing Made Simple - Nathan Sloan