How many of you are true Bogleheads? | TigerDroppings.com

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jimbeam
USA Fan
University of LSU
Member since Oct 2011
32993 posts

How many of you are true Bogleheads?



Three fund portfolio and all that jazz?






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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
17746 posts

re: How many of you are true Bogleheads?


I follow the bogle philosophy except I don't believe in indexing and only indexing. I use index and managed funds, plus individual stocks.





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ThaBigFella
LSU Fan
baton rouge
Member since Apr 2006
2043 posts

re: How many of you are true Bogleheads?


boglehead philosophy is phenomenal if you want consistent 6-10% annual returns.

If you want a shot at more, you've gotta find it on your own.

I've personally always been a buy and reinvest dividends type for the last 15 years. Recently I've been reading more and more about more aggressive strategies and I've found selling weekly puts can generate .5%-1% a week on stocks I would've bought anyways if it expires worthless and if I'm put the shares I'd get them at a price I liked anyways.

The more you think you know about investing, the less you really know, I've been around this stuff for a long time and I think boglehead philosophy is great if you want a hands off, peace of mind approach. There's no chance your investment goes to zero and it's easy to add funds monthly without paying commissions.

If you want to get rich following the boglehead way it is going to be mostly via your new cash deposits



This post was edited on 7/14 at 1:40 pm


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GenesChin
Ole Miss Fan
The Promise Land
Member since Feb 2012
12161 posts

re: How many of you are true Bogleheads?


quote:

Recently I've been reading more and more about more aggressive strategies and I've found selling weekly puts can generate .5%-1% a week on stocks I would've bought anyways if it expires worthless and if I'm put the shares I'd get them at a price I liked anyways.


Can you explain this? Then explain how much you make from doing this to see if it is worth investigating



This post was edited on 7/14 at 1:49 pm


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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
16577 posts

re: How many of you are true Bogleheads?


quote:

I follow the bogle philosophy except I don't believe in indexing and only indexing. I use index and managed funds, plus individual stocks.



and ETF's (if you are referring to mutual funds above that is)



This post was edited on 7/14 at 3:14 pm


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makersmark1
Auburn Fan
Member since Oct 2011
1797 posts

re: How many of you are true Bogleheads?


quote:

Can you explain this? Then explain how much you make from doing this to see if it is worth investigating


SELLING or writing put options means you are obligated to purchase that stock at that price(strike) at a date certain (expiration) in the future.

I sell cash secured put options at strikes that I would have been happy to buy at that price.

Say ABC is selling at 12 dollars and you would buy it at 10. You could sell the JAN 14 10 put for say .75 per contract. If you sold 10 contracts you would receive a premium of 750 dollars less commission(10 or 15 bucks) at most online brokerages.



This post was edited on 7/14 at 2:21 pm


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ThaBigFella
LSU Fan
baton rouge
Member since Apr 2006
2043 posts

re: How many of you are true Bogleheads?


ok well basically a put is a contract for 100 shares. Through trial and error I've learned to sell them on down days bc the price of the put goes up.

So take Phillip Morris my favorite stock. It's at $89+ as of friday, let's say you sold the $87.50 July 20 put for .63 like I did last week, it's now worth .47 and the closer we get to july 20 and the further away from $87.50 the price of the put will go down and hopefully expire worthless and you keep .63 per share in 1.5 weeks.

Now, time decay is on your side, I had 2 days, saturday and sunday, where the market was closed but the value of my put will increase bc I just knocked 2 of the 7 days before the put expires off and now we have 5 days of market trading before the put expiration is due.

Essentially the share would have to fall $2 to $87.50 before I would be forced to buy the stock at which point I would be buying it for $87.50 minus $.63/share so my final price would be $86.87 which I feel is a superb price.

Let me give an example on a big scale.If you trade 10 contract, 1000 shares, you would have made $630 in a week which doesn't sound like much when you're risking $87,500 you make just under 1% for the week.....imagine that kind of ROI week after week for trying to buy a stock below it's current price?

I don't advocate this strategy unless you have a high risk tolerance, and a high cash balance but I asked around for help here a few weeks ago and gave it a whirl on a long term put but then realized the short term week to week puts was where the real big bucks are at. The long term ones are like 40% ROI in 2 years which is awesome, the weekly ones are anywhere from .5%-2% a week depending on how risky you wanna go.

Just saying there are so many different investing strategies out there and if you love it, and you enjoy finance, do some research you will thank yourself later. I've had some great success in the past month selling puts and it's only my first month. Essentially if a stock goes up or sideways you win, hell you win even if drops a little in some circumstances.....vs buying the shares out right, the shares must go up to profit. All this in a short term period, hell you can sell weekly puts on wednesday and have 2 days before they expire to mitigate risk.

If you expect phillip morris earnings to be $5.57/yr + $3.40/yr dividend that's right around $9/year. If I sell weekly puts at may .60/share for 52 weeks you would make $30/yr, 300% difference. You could be more aggressive and sell at the money puts that are over $1/share/week.Of course that's if every option contract expires worthless which won't happen but you get an idea of what I'm saying. Worst case you get put the shares for below today's price and you can hold and sell later....



This post was edited on 7/14 at 2:10 pm


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Chris Farley
Maryland Fan
Regulating
Member since Sep 2009
3701 posts

re: How many of you are true Bogleheads?


quote:

boglehead philosophy is phenomenal if you want consistent 6-10% annual returns.


The S&P 500, the most common index used for these purposes, hasnt had a return between 6-10% since 1992.

quote:

If you want to get rich following the boglehead way it is going to be mostly via your new cash deposits


No, it's not like buying CDs or treasuries. You diversify across a large number of equities and accept their return. It's a hands off way to diversify the risk of purchasing single securities, which most individual investors are not capable of doing properly.








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ThaBigFella
LSU Fan
baton rouge
Member since Apr 2006
2043 posts

re: How many of you are true Bogleheads?


When did I say it was like CD's or Treasuries? I'm just saying that with such low returns, the bulk of your assets will come via new deposits bc the dividends aren't really that big and there will be many years where the market is down and with dividends so low you won't really pick up a bigger chunk via dividends so new cash will be a big thing in the long run.





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Chris Farley
Maryland Fan
Regulating
Member since Sep 2009
3701 posts

re: How many of you are true Bogleheads?


The S&P has a compound average growth since 1970 of 9.94% and, even near an all time high, still yields over 2%. 3 of the last 4 years have been greater than 15%. Is that low to you?

There is more to investing than div yield, you are missing out on a lot of good growth companies if that is all you look at. Indexing gives the average investor an opportunity to efficiently profit from both and advantage themselves using DRIPs and tax efficient accounts. It makes sense for most people for at least a good portion of their assets.







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jimbeam
USA Fan
University of LSU
Member since Oct 2011
32993 posts

re: How many of you are true Bogleheads?


I really like the hands off (except for rebalancing) index approach. However the DRIP route also seems like a good long term option.

Drips would make most sense in a ROTH since your dividends are taxed correct?

How many of you mix indexing and DRIPing?






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Chris Farley
Maryland Fan
Regulating
Member since Sep 2009
3701 posts

re: How many of you are true Bogleheads?


quote:

Drips would make most sense in a ROTH since your dividends are taxed correct?


Theoretically yeah, but there's no reason not to do it in a taxable account unless you don't have the cash on hand to pay the taxes.






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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30341 posts

re: How many of you are true Bogleheads?


quote:

boglehead philosophy is phenomenal if you want consistent 6-10% annual returns.

If you want a shot at more, you've gotta find it on your own.


Not quite. You can leverage a porfolio of funds.






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makersmark1
Auburn Fan
Member since Oct 2011
1797 posts

re: How many of you are true Bogleheads?




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ThaBigFella
LSU Fan
baton rouge
Member since Apr 2006
2043 posts

re: How many of you are true Bogleheads?


makersmark, I've only recently gotten into selling puts but I think the big issue for the average person is the fact your minimum trade is 1 contract=100 share lot, I know most people on here from what they mention trade much smaller lots.

I've found it to be a spectacular tool for week to week income.



This post was edited on 7/14 at 6:55 pm


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makersmark1
Auburn Fan
Member since Oct 2011
1797 posts

re: How many of you are true Bogleheads?


I agree.

If you can't generate 500 dollars, it creates commisions without much return. I use it when I like a stock long term and would buy it at a lower price anyway.






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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: How many of you are true Bogleheads?


quote:

ThaBigFella



I got my first dividend from PM. $71.40 worth.






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ThaBigFella
LSU Fan
baton rouge
Member since Apr 2006
2043 posts

re: How many of you are true Bogleheads?


Congrats man, I was happy abt my dividend payment yesterday too, your next div payment will be much higher, new 3/4 of a share plus div increase in sept


This post was edited on 7/14 at 9:08 pm


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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: How many of you are true Bogleheads?


I have 2k left to invest in my roth.

What would the boglehead thing to do with that 2k?

I really want to buy V, but feel like it would take really long to accumulate any real amount of shares with a small amount of $.


I have 10k in PM.







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jimbeam
USA Fan
University of LSU
Member since Oct 2011
32993 posts

re: How many of you are true Bogleheads?


one of you may know.

I currently have indexes through Vanguard. If I want to do a DRIP(looking at CVX), 1. Can I do it through them 2. Can you add to an IRA through different providers (say etrade or something like that as well as the Vanguard account I already have)







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