Home Forums Members Forum Starting new IRA rollover balance from scratch

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  • ThankfulThankful
    Participant
    Post count: 270

    You guys may remember helping me (thank you, thank you THANK YOU) with dealing with my wife’s employment decision. Well, now she’s rolled over her former 401K to a Schwab IRA and it’s all in cash. I have been given full control and want to make the right decisions. I’ve followed you Sean for many years but still know what I don’t know. Should I start with a third in all positions under the original buy-in? The market seems toppier than ever, should I just keep it on the sidelines for now? Appreciate any thoughts.

    Sean HymanSean Hyman
    Keymaster
    Post count: 4541

    I’d keep a ton of it on the sidelines. If there are decent sized pullbacks in SLV, CAH, IBM, etc., you could put a little bit in them. Just make sure to divide up the money for the account, this way: https://logicalinvestor.net/members-only/my-complete-investing-system-how-to-allocate-your-money/

    That’s crucial.

    ThankfulThankful
    Participant
    Post count: 270

    That is what I figured, the more I know and learn the more I know, and learn what I don’t know. I can’t thank you enough for taking the time to weigh in!

    Sean HymanSean Hyman
    Keymaster
    Post count: 4541

    You’re welcome. Yep. Amen. I always liked this quote:

    “there are three kinds of people in the world: those who don’t know and don’t know they don’t know; those who don’t know and do know they don’t know; and those who know and know how much they still don’t know.”

    ThankfulThankful
    Participant
    Post count: 270

    A lesson we all need to hear. I saw the questioning of E and this week’s video, some of us just aren’t wired the way a Logical Investor should be, me included. That’s why this forum is so valuable, we can share our worries and weakness and work through it together. I’ve been with you for years but know I needed to check with you instead of listening to the voice saying ‘SLV has pulled back enough’, for example.

    Sean HymanSean Hyman
    Keymaster
    Post count: 4541

    I’m not sure anyone is naturally wired correctly for it. I sure wasn’t. It’s a matter of practicing the correct mental exercises over and over through the years. Keeping a focus on fundamental soundness/cheapness. It’s the key to why Buffett never worries about any of his positions that get temporarily slammed and why he rides them to great profits. Averaging down makes “slams” our friend in that we get more favorable pricing than if we’d been “all in” investors, like most investors are.

    But it’s the repetition of engraining it into our minds, to focus on fundamentals. To focus on where the stock should go as a result of the fundamentals, technicals, sentiment rather than where it is or where it has been.

    It’s in analyzing how differently pros think from the masses and adjusting one’s thinking to that of the successful pros (like Buffett) and away from the futile thinking of the masses.

    My point of the video: Don’t become the prevailing sentiment of wave C and wave 2 when you know you should have the opposing thoughts because of the waves that come thereafter. Don’t get caught up in where a stock is or has gone. Get caught up on where it goes over time due to it being in a state of undervaluation, knowing that stocks don’t remain in states of undervaluation forever. But the confidence resides in the focus being on the fundamental strength of the company. The size of the ship, not the wind or the waves.

    ThankfulThankful
    Participant
    Post count: 270

    100%. Most of the time I can do that. When big events happen I can forget. You are a great blessing my friend. I thank God for you often!

    Sean HymanSean Hyman
    Keymaster
    Post count: 4541

    Yep, that’s why practice over and over again is needed. In time (over quite a bit of time of practicing it), it starts to become a lot more normal/natural to you. I’m glad you check in and ask.

    Thank you. I appreciate the kind words.

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