Patience is not yet one of my strengths. I have the need to see progress, to see that things move forward, the need for action. Why is that a problem on my journey to FIRE? Investing is more a marathon than a sprint. I am also an index investor. According to me, the investment style with the least action. How do you deal with that?
My current focus is to build out an index portfolio and to invest each month in my trackers. I do this as I am convinced that indexing is a great way to do better than average. This is especially true in my tax situation: on trackers, for now, there is no capital gain tax.
Dividend investing is also a good way to get great returns. This is demonstrated by the results of a lot of bloggers out there. Dividends are taxed at 25pct (soon 27pct) in Belgium and there is the home country tax. A little too much? Or do I forget the bigger goal of dividend investing?
Back to index investing: I have defined my asset allocation and I have my monthly buy in place. Not all is automated, but the reflex is there. As a result, investing takes me less than 5 minutes per month. I need to wire money to my broker and place the trade 2 days later. Then, log it and follow up when making the amber index.
What is missing?
For me personally, this all looks boring and dull. This might be the goal: spend as less time as possible on your investments so you can do fun stuff in life. But what is investing and the markets is part of the fun? I have an interest in the markets, how it works, what others do. And with all these bloggers and good content sites out there, it feels as if I have a court side seat for seeing the action of others.
Off course, Things have been smooth since I picked up investing again since April 2014. No major crash causing a loss in my portfolio. But I understand volatility and mean reversion. I know it will happen one day. I just do not know what day. Most likely, a crash will make sure there is action in my portfolio. The plan is to stay calm at that time and to keep investing.
But, it is not that kind of action that I am looking for…
The one thing missing
I am missing the suspense that comes with tweaking and playing with the markets. I know, I should not do that, it does not work and it makes you loose money. And yet, I have the need for speed.
The plan is to have some DGI stocks, write covered calls and do some put writing. By doing this, I hope to get enough distraction and adrenaline. that is missing in the index investing strategy.
How would this work?
There is some action needed to select a good DGI stock that you can buy at a good price compared to its value. I believe this is something that could give me the satisfaction I need to see the results from my effort.
Next to that, I can get some action by writing calls and puts on these stocks. With the myths that cover options, it sounds like a guarantee to get some action.
I know I need to limit myself. Therefore, I will not rush into this, but I will do it slowly, one step at the time. My overall goal could be to have roughly 25pct of my portfolio in DGI with options on top of that. This sounds reasonable to me.
Do you also have the need for speed? If so, how do you deal with it?