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Start Your 3Sig Plan.

The 3% Signal pushed dollar-cost averaging aside as the stock market’s new best practice. After reading the book, use these tools to manage your plan. Includes Mark’s plan from Chapter 7 that you can print on a single page for reference when rereading his story. Some tools are free. Get the tools


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Each of these worksheets from my Neatest Little Guide series fits on a single piece of paper, which you can print. From your financial goals to your personal expenses to promising stocks you want to watch, these hardworkers have you covered. Free. Get the worksheets


Research Online.

This page links to many of the sites referenced in “The Internet” section on pages 197-203 of The Neatest Little Guide to Stock Market Investing, 2013 Edition. Free. See the collection


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3 Comments

  1. Alexander
    Posted July 25, 2018 at 4:58 am | Permalink

    Dear Jason,

    I hope your are well.

    A friend of mine and I have been running our portfolios on 3Sig for about two years now.
    We both use VBR (70-90 percent range) for stocks and BLV (10-30 percent range) for bonds.
    During the last months, BLV has been decreasing under my friend’s BLV price hitherto payed on average.
    At the same time, VBR has been constantly increasing, that is over her VBR price hitherto payed on average.
    Her current portfolio market value amounts to about USD 4,000, her next quarterly contribution to USD 500.
    Her BLV portfolio share has risen to about 35%, but, and here’s the “problem”: She could only rebalance through
    selling bonds with a loss, and buying stocks over her VBR price hitherto payed on average. Even if she only buys VBR, her BLV portfolio share would still be “too large” and her VBR price hith. p. on avg. would go up.
    I would say, she should, again, only buy bonds at the next signal, since, eventually, she will have a lot to sell and
    reinvest into stocks. Also, increasing her average VBR price would mean lowering her return potential for VBR, in a way.

    I would really appreciate, if you could share your thoughts on this or on situations like this, in general, regarding 3Sig and rebalancing/portfolio shift. I know that if you would share your opinion, this would not
    be an investment advice I’d have to follow or could base any claims on, later.

    All the best from Germany,

    Alexander

    • Posted August 20, 2018 at 7:27 am | Permalink

      Dear Alexander,

      The average price per share does not matter. Only the growth of the balances matters.

      Therefore, your friend should follow the signal, even selling her bond fund shares at a minor loss, to keep the plan on track. Eventually, the signal will change for her (account growth making her contribution a lower percentage, market dynamics, etc.), and the flow will move in the other direction.

      The plan can feel distorted in the beginning when contributions are outsized compared with the portfolio balance, causing every quarter to signal buying more shares of the stock fund.

      I hope this helps, and wish her well.

      My best,
      Jason

  2. Ed Reavy
    Posted September 7, 2018 at 2:31 am | Permalink

    Jason-

    I enjoyed reading your stock market investing guide.
    It was clear, retention was improved with examples, etc.
    You also took the reader from Theory to practice well.

    The only thing which I hoped to see that was missing
    was guidelines for using an inverse index
    (from your appendix)to offset short term losses incurred
    during a bear decline. The request could be timely,
    given that we are likely toward the end of the latest bear market.

    I believe this would be useful, with parameters provided,
    for minimizing losses or even making $ when a bubble breaks, etc.

    I was also wondering whether the 80/20 stock / bond index mix
    in the 3% signal should change as retirement years approach
    (I’ll be 69 in several months)

    Thoughts?
    Thx
    ER

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