Of my play money (which was maybe 5% 5 years ago), I've invested mostly in major tech stocks and a small amount in renewable energy related things, which did really badly (lithium companies). Net, the play money way outperformed the index part. Was going to rebalance last year...
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...but then I procrastinated and Covid happened, everything got accelerated, the market got crazy distorted beyond what it already was, and the play money did much better. So now, what I thought of as "rebalancing" in 2019 would really be a bet on "old normal will return"
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Which seems like a stupid bet tbh. Covid definitely counts as an extinction-level event that's caused changes to unfold far faster than indices are keeping up (with money printer go brrr effects making it even slower).
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Also, general broad belief in passive investing seems to have slowly eroded over the last decade to the point where no serious pro investor I know seems to unqualified recommend it anymore. But Malkiel himself seems to think pandemic has changed nothing
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To be clear, Malkiel is primarily against "active investing" in sense of pro traders charging commissions to do more active trading esp. in volatile times. I'm suggesting something more milquetoast: hold a few long positions to slightly distort a basic index/passive approach.
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I guess I could label the posture I've accidentally landed in and rationalized to not change as "supercharged passive" or "accelerated passive." Just buy a bit more of a subset of things that are already heavily represented in the index.
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Thread brought to you courtesy a warning pop up on my investment account saying I have concentration risks. Question is whether to ignore it....
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And let's not even talk about crypto
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Funny how few people talk about "home ownership" as a risky concentration. I mean sure, you live in an owned home, but it's still pretty risk to have so much of your wealth in a single physical asset, let alone a single stock.
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