Three months in and it hasn’t been hard to maintain discipline. I’ll talk about that later.
Progress after contributions.
Portfolio End July: -0.44%
Portfolio End August: 1.03%
Portfolio End September: 0.46%
Lost a little bit in September, though it’s pretty much a who cares issue. Mentally this process is being treated as a savings account. Clearly it is much higher risk, but the dollar cost averaging process, or the wade, is probably mentally the least troubling investment action there is. For a year prior to beginning this process I’d been on a massive savings program. Not for any particular reason, I’d always been a good saver, but I’d wanted to push my discipline and the boundaries of what you might term a monk mindset.
This was fortuitous when COVID hit. Not because my job was in jeopardy, but because many others were. The buffer of cash that I’d built was something of a mental fortress. When you contrast this to others, I had certainty. My biggest criticism is for self funded retirees, or more specifically their dividend portfolios. Cash is not about a return. Cash is about certainty of spend. If you don’t have it, you don’t have that certainty. Take away your dividends and what have you got? Uncertainty!
With that buffer and a year’s worth of intense saving discipline, it was turned toward the portfolio, but it needed something first.
The other aspect of maintaining discipline is the goal. For me the process is goals, plans, portfolios. Previously, messing around in individual shares, there was no goal. At best, it was trying to achieve a better return on money. While I had many successes and many failures, it was mostly churn. If you’re just going to churn and go essentially no where, you may as well leave your money in cash until you find a direction.
Right now, I’d like to stop working in ten years. Is it achievable? Is it serious? This process should at least offer me something of an option.
But here’s how things can go: Goals. Plans. Portfolios. Life. Re-evaluation. Goals. Plans. Portfolios.
Disclaimer: The discipline project is a personal endeavour and should not be constituted as a financial strategy that anyone should follow. It is more a study in repetition and shutting out the noise in pursuing a financial goal, than any focus on portfolio construction. Anyone looking to build a portfolio should seek financial advice to find out which strategy is right for them, if you are seeking financial advice then you should consider one of Australia’s best financial advisors who may be able to help you identify your goals and put in place a reliable strategy to pursue them.
