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Thread: Lets trade Warren Buffets 90/10 index egy with a twist

  1. #1
    This thread is dedied to share ideas and examine legendary Warren Buffet's egy moving forward. . ...

    The good news is that you don#8217;t need to pay a dime for Mr. Buffet#8217;s valuable information. Warren Buffett published the directions he has left to the trustee that will manage his wife8217;s hope in a letter to Berkshire investors. The directions couldn # 8217; t be easier to follow and could fit on the back of an envelope.

    What I counsel here is essentially identical to specific directions I#8217;ve laid out from my own will. 1 bequest provides that cash will be sent to a trustee for the spouse#8217;s benefit#8230;My guie to the trustee could not be simpler: Put 10 percent of the cash in short-term government bonds and 90% at a really low-cost SP 500 index fund. (I suggest Vanguard#8217;therefore) I feel the trust#8217;s long-term consequences from this policy will likely be superior to those attained by most investors-Warren Buffet. . #8230;

    Join me to put one of the greatest investors of all time Warren Buffet's investment information into practice and see how it goes...

    I will provide resources and tips later. .

    This is your list of those bonds and index resources we'll be dealing with.They are at ticker symbols.If you dont understand exactly what a ticker symbol is ,google is your friend. .


    LOW COST SP INDEX FUNDS
    VOO
    SCHX
    VTI
    ITOT
    VTV
    VO
    SCHM
    IJH
    VB
    SCHA
    IWM

    SHORT TERM GOVERNMENT BONDS.
    VGSH
    ISTB
    SCHO
    SHY

    More about these ticker symbols
    LOW COST SP INDEX FUNDS
    Title: Vanguard SP 500 ETF
    Ticker Symbol: VOO
    Category Style: Enormous Cap/Blend (Mimic SP 500 stocks)

    Title: Schwab U.S. Large-Cap ETF
    Ticker Symbol: SCHX
    Category Style: Large Cap/Blend (Mimic Dow Jones Large Cap)

    Title: Vanguard Total Stock Market ETF
    Ticker Symbol: VTI
    Category Style: Enormous Cap/Blend (Total market vulnerability)

    Title: iShares Core SP Total U.S. Stock Market ETF
    Ticker Symbol: ITOT
    Category Style: Enormous Cap/Blend (Total market vulnerability)

    Title: Vanguard Value ETF
    Ticker Symbol: VTV
    Category Style: Enormous Cap/Value (Mimic MSCI US Prime Market)

    Title: Vanguard Mid-Cap ETF
    Ticker Symbol: VO
    Category Style: Mid Cap/Blend (Mimic MSCI US Mid Cap 450 Stocks)

    Title: Schwab U.S. Mid-Cap ETF
    Ticker Symbol: SCHM
    Category Style: Mid Cap/Blend (Mimic Dow Jones Mid Cap Total Market)

    Title: iShares Core SP Mid-Cap ETF
    Ticker Symbol: IJH
    Category Style: Mid Cap/Blend (Mimic SP 400 Mid Cap Total Stocks)

    Title: Vanguard Small-Cap Index Fund
    Ticker Symbol: VB
    Category Style: Little Cap/Blend (Mimic CRSP US Small Cap)

    Title: Schwab U.S. Small-Cap ETF
    Ticker Symbol: SCHA
    Category Style: Little Cap/Blend (Mimic Dow Jones Small Cap Market)

    Title: iShares Russell 2000 ETF
    Ticker Symbol: IWM
    Category Style: Little Cap/Blend (Mimic Russell 2000 Index)

    SHORT TERM GOVERNMENT BONDS.
    Title:Vanguard Sht Term Govt Bond ETF
    Ticker Symbol: VGSH
    Category Style: U.S. Treasury Bonds (Barclays U.S. 1-3 Year Float Adjusted)

    Title: iShares Core 1-5 Year USD Bond ETF
    Ticker Symbol: ISTB
    Category Style: U.S. Treasury Bonds (Elderly in 1-5 years)

    Title: Schwab Short-Term U.S. Treasury ETF
    Ticker Symbol: SCHO
    Category Style: U.S. Treasury Securities (Barclays U.S. 1-3 Year Treasury Bond)

    Name: iShares Core 1-3 Year Treasury Bond ETF
    Ticker Symbol: SHY
    Category Style: U.S. Treasury Bonds (Elderly in 1-3 years)

    Read more about the indexes
    LOW COST SP INDEX FUNDS
    https://personal.vanguard.com/us/fun..._redirect=true
    https://www.schwab.com/public/schwab...sp?symbol=SCHX
    https://personal.vanguard.com/us/fun...ect=true#tab=0
    https://www.ishares.com/us/products/...ock-market-etf
    https://personal.vanguard.com/us/fun...ect=true#tab=0
    https://personal.vanguard.com/us/fun...ect=true#tab=0
    https://www.schwab.com/public/schwab...sp?symbol=SCHM
    https://www.ishares.com/us/products/...-sp-midcap-etf
    https://personal.vanguard.com/us/fun..._redirect=true
    https://www.schwab.com/public/schwab...sp?symbol=SCHA
    https://www.ishares.com/us/products/...ssell-2000-etf


    Read more about the SHORT TERM GOVERNMENT BONDS here.
    SHORT TERM GOVERNMENT BONDS
    https://personal.vanguard.com/us/fun...ect=true#tab=0
    https://www.ishares.com/us/products/...rm-us-bond-etf
    https://www.schwab.com/public/schwab...sp?symbol=SCHO
    https://www.ishares.com/us/products/...asury-bond-etf

    How to trade the Warren Buffet egy with my twist.

    Strategy 1:
    Alloe 90% of your budget to among those LOW COST SP INDEX FUNDS your choice from the list I've provided and 10 percent to among those SHORT TERM GOVERNMENT BONDS from the list provided.

    Strategy 2 :
    Here is my twist to the original warren buffet egy.Buy all the minimal COST SP INDEX FUNDS and all of the SHORT TERM GOVERNMENT BONDS from the record provided.

    We're likely to apply dollar cost averaging to both approaches but we'll spend only on the ideal trading days of the month or year as researched at the pdf connected(Seasonal Stock market Trends). The pdf includes decades of study that we will use to our benefit with the warren buffet egy.This provides us an edge....For those that are not familiar with dollar cost averaging this is exactly what means.

    WHAT IT IS:
    Dollar cost averaging is a egy where an investor puts a predetermined dollar amount into a specified http://www.investinganswers.com/node/4904 (generally http://www.investinganswers.com/node/5025) on a regular basis. The investment generally takes place every month regardless of what is happening from the http://www.investinganswers.com/node/5045. Because of this, once the price of a given investment rises, the investor will be able to buy fewer http://www.investinganswers.com/node/2011. After the price of a security declines, the investor will be able to buy shares.
    HOW IT WORKS (EXAMPLE):
    Let us assume an investor decides to buy $1,000 worth of XYZ Corp. in precisely the same time each month for four weeks. In this example, we will also assume that the http://www.investinganswers.com/node/5150 first declines in value, but http://www.investinganswers.com/node/5874 strongly.


    because you can see from the table above, using a dollar cost averaging egy the investor would have bought 272.22 shares for a total of $4,000. His/her average price per share for this period would have been just $14.69 (calculated as follows: $4000 / $ 272.22 = $14.69). With the stock ending at $18 in the conclusion of this time, the investor's complete standing would now be worth $4,900 (calculated as follows: 272.22 shares * $18 = $4,900). Because of this, the investor would really show a http://www.investinganswers.com/node/2042 of $900 on their own overall standing despite the fact that the stock dropped in value over the full four-month time period (dropping from $20 to $18).
    In contrast, when the investor had made a decision to invest $4,000 in shares of XYZ Corp. all at once in the beginning of this period, then he/she would have bought 200 shares at a price of $20 per share. With the stock finishing at $18 in the end of their four weeks, the investor would have shown a http://www.investinganswers.com/node/489 of -$400 on the stock.
    This example clearly illues the benefits of dollar cost averaging, especially during periods of volatile share prices.
    WHY IT MATTERS:
    Countless investors around the globe use dollar cost averaging because it offers the following benefits:It's an attractive option for investors that want to contribute on a regular basis to their own investment portfolios. It eliminates the issue of http://www.investinganswers.com/node/940. Consequently, an investor returns will be determined more by the trend in a stock as opposed to the investor's specific entry price. Additionally, it assists investors reduce their http://www.investinganswers.com/node/1037 on securities which decline in value. Supply : http://www.investinganswers.com/fina...averaging-1310

    Read more about dollar cost averaging Here : https://www.investopedia.com/terms/d...taveraging.asp
    https://www.thebalance.com/dollar-cost-averaging-356331
    http://www.nasdaq.com/article/why-do...t-egy-cm354240



    So instead investing every month or weekly regular basis my spin is to dollar cost average on the best trading days of the month or month.


    My counsel:In my humble view since this is a long term investment egy , it is reasonable risk 50% or less of total capital whichever way you select to go with to make space for drawdowns.So for instance , If I was investing in method 1 or method 2 , it makes sense to have a residual balance of lets say $1000 in my account when I've spent $1000 using method 1 or method. Complete capital in this case =$2000... $1000 spent and staying balance $1000 in the account to make space for virtually any drawdowns.I hope you get the picture.


    I will post examples with screenshots for clarity going ahead. .

    Your ideas , suggestions , criticisms , all donations leading to the progress of this egy are all welcomed.Feel free to give your quota.


    DISCLAIMER: Futures, stocks and options trading involves substantial risk of loss and is not acceptable for every investor. The valuation of futures, stocks and options may vary, and, consequently,you may lose more. The impact of seasonal and economic events is already factored into market prices.If the market moves against youpersonally, you may sustain a entire loss greater than the amount you deposited into your account. You're accountable for the risks and for the chosen trading system. Unless you fully comprehend the nature of the trades you are entering into and the extent of your exposure to 27, you should not participate in trading. If you don't fully understand these risks you must seek impartial advice from your financial adviser.
    https://www.forexsoutheast.asia/atta...1383440385.pdf

  2. #2
    It is no secret that Buffett is a proponent of indexing for the regular investor. But not everyone here has the access and funds for vanguards...

  3. #3

  4. #4
    Quote Originally Posted by ;
    It is no secret that Buffett is a huge proponent of indexing to get your normal investor. However, not everyone here has the access and capital to get vanguards...
    I'd disagree with you according to my experience with the thinkorswim platform(TDAmeritrade). .What most traders dont know is the thinkorswim platform is a great and friendly platform for retail traders.In the TOS(tHINKorswim) platform you can buy stocks , index , Etfs etc in the smallest unit.You can buy 1 unit(quantity) of index , stocks , etfs etc.I think most traders aren't conscious of this.Thats the benefit of employing the TOS platform..Initially I didnt believe it that it had been possible to buy 1unit of almost every stock , etf , index you can think of before I had a live conversation with the customer care representative and they confirmed it.The TOS platform is great for retail traders with little capital.

  5. #5
    Quote Originally Posted by ;
    quote I'd disagree with you according to my experience with the thinkorswim platform(TDAmeritrade). .What many traders dont understand is the thinkorswim platform is a great and friendly platform for retail traders.In the TOS(tHINKorswim) platform you'll be able to buy stocks , index , Etfs etc at the smallest unit.You can buy 1 unit(quantity) of index , stocks , etfs etc.I believe most traders are not conscious of this.Thats the advantage of using the TOS platform..Initially I didnt believe it that it had been possible to buy 1unit of almost every inventory , etf...
    I agree. I enjoy the TOS platform better than other trading platforms on the market.

  6. #6
    According the research in the seasonal stock market trends I have attached to the first post on this thread , the first trading day of the month is among the very best trading days of the month.So I bought all of the minimal COST SP INDEX FUNDS and each of the SHORT TERM GOVERNMENT BONDS now since now is the first trading day of the month.

    I have attached a screenshot of all of the transactions that were opened in the thinkorswim platform for clarity.NB:I bought just 1 quantity all those minimal COST SP INDEX FUNDS and all of the SHORT TERM GOVERNMENT BONDS as noticed in th screenshot.

    As you can see from the Thinkorswim(TOS) platform in the screenshot buying all the LOW COST SP INDEX FUNDS and all of the SHORT TERM GOVERNMENT BONDS ONLY cost $755.91. As seen from the screenshot that the SHY order has not been filled yet so when it gets filled that'll bring the total cost of the cost to $755.91 $41.75= $797.66

    I will wait until the middle of the month to start the dollar cost averaging.Meaning , I will another 1 quantity all the all the minimal COST SP INDEX FUNDS and each of the SHORT TERM GOVERNMENT BONDS midst of the month. Why middle of the month?Because according to the research report from the seasonal stock market trends(pdf attached to my first article) , midst of the month is also among the very best trading days of the month.

    And my final dollar cost averaging will be executed on the last trading days of the month that is also among the very best trading days of the month depending on the research report from the pdf seasonal stock market trends.

    If there's something you dont understand or any questions that you would like to ask don't hesitate to do so.

  7. #7
    Hey man... Don't you believe averaging in 3 times every month is alittle too frequent? I mean bi-annually, at the most or quarterly is suggested by conventional wisdom monthly.

    And I really don't mean to be a contrarian but US equities does appear to be overheating, therefore it is not really ideal to buy-and-hold now.

    In any case, good luck!

  8. #8
    That is your opinion of the month's beginning. There's not anything in common with the end of the month or the middle. Stop fooling yourself.

  9. #9
    Quote Originally Posted by ;
    Based the study in the seasonal stock market trends I have attached to the initial post on this thread , the first trading day of the month is just one of the best trading days of the month.So I bought each of the LOW COST SP INDEX FUNDS and each of the SHORT TERM GOVERNMENT BONDS now since now is the very first trading day of the month. I have attached a screenshot of all of the transactions that were opened in the thinkorswim platform for clarity.NB:I purchased only 1 quantity each of those LOW COST SP INDEX FUNDS and of the SHORT TERM GOVERNMENT BONDS as seen in...
    Thank you for all the fantastic info.
    I like the PDF.

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