Stacking Investment Packs: An Astonishing Attainment

“Both Age and [Time Horizon (TH)] are “a stock”. For example, Age 25 and TH 5 years, are constant for the entire period of analysis.

THs, nonetheless, are not constant but changes. For example, for Pack #1 5 years, for Packs #2 4 years, for Pack #3 3 years, for Pack #4 2 years, and for Packs #5 1 year.

I plan for 5 years as a single:

· invest 50% of my monthly payroll in the BOK.

· Complete 5 Investment Packs, one by one every year.

· In 5 years, I will have 5 IPs: 5-years old IP #1, 4-years old IP #2, 3-years old IP #3, 2 years old IP #4, and 1-year old IP #5.

· I will stop making more IPs, and “marry my wife”.

(From ” Stacking Investment Packs Or Going On Roll Off“, May 22, 2023.

Introduction

Right after writing the above quote, I felt that a numerical illustration must follow to help readers understand better. The work, however, takes at least a couple of days, so I decided to write a new article as a second part.

Focus

It is assumed to invest $10.000 every month, with three annual interest rates: 4%, 5%, and 6%, and monthly compounded.

Calculate 5 Investment Packs [IPs] with Excel for the starting year 1964 (Age 25) in Table 3. Compute the investment Capital [IC] (the total amounted 5 IPs from IP # 1 thru IP #5) for five years (1965 to 1969) or Age (26 to 30) in Table 4.

Finally, figure out the IC for another 15 years, (1970 to 1985) or Age (31 to 45), without an additional investment of $10,000 each year, in Table 5.

Update the two-months old Uptrend as of May 26, 2023.

Monthly Update of the Current Uptrend as of May 26, 2023

The eight-weeks-old uptrend, beginning on March 31st, has gained another stronger footing – as of May 26 (F).

My “PPO” Approach demonstrated a clear track on the coming up-/down-momentum and up/down trend which has not been detected by clever algorithms (i.e., moving average) or sophisticated graphics or charts.

The “P” is a plus and the “m” is “minus” so the S&P 500 daily closing prices are classified by either “P” or “m”.

Table 1: Momentums & Trends
(Mar. 01, 2023 – May 26, 2023)
Date	Close			%CH			m/P
02/28/23	3,970.15			*			*
03/01/23	3,951.39			-0.47%			m
03/02/23	3,981.35			0.76%			P
03/03/23	4,045.64			1.61%			P
03/06/23	4,048.42			0.07%			P
03/07/23	3,986.37			-1.53%			m
03/08/23	3,992.01			0.14%			P
03/09/23	3,918.32			-1.85%			m
03/10/23	3,861.59			-1.45%			m
03/13/23	3,855.76			-0.15%			m
03/14/23	3,919.29			1.65%			P
03/15/23	3,891.93			-0.70%			m
03/16/23	3,960.28			1.76%			P
03/17/23	3,916.64			-1.10%			m
03/20/23	3,951.57			0.89%			P
03/21/23	4,002.87			1.30%			P
03/22/23	3,936.97			-1.65%			m
03/23/23	3,948.72			0.30%			P
03/24/23	3,970.99			0.56%			P
03/27/23	3,977.53			0.16%			P
03/28/23	3,971.27			-0.16%			m
03/29/23	4,027.81			1.42%			P
03/30/23	4,050.83			0.57%			P
03/31/23	4,109.31			1.44%			P
04/03/23	4,124.51			0.37%			P
04/04/23	4,100.60			-0.58%			m
04/05/23	4,090.38			-0.25%			m
04/06/23	4,105.02			0.36%			P
04/10/23	4,109.11			0.10%			P
04/11/23	4,108.94			0.00%			P
04/12/23	4,091.95			-0.41%			m
04/13/23	4,146.22			1.33%			P
04/14/23	4,137.64			-0.21%			m
04/17/23	4,151.32			0.33%			P
04/18/23	4,154.87			0.09%			P
04/19/23	4,154.52			-0.01%			*
04/20/23	4,129.79			-0.60%			m
04/21/23	4,133.52			0.09%			P
04/24/23	4,137.04			0.09%			P
04/25/23	4,071.63			-1.58%			m
04/26/23	4,055.99			-0.38%			m
04/27/23	4,135.35			1.96%			P
04/28/23	4,169.48			0.83%			P
05/01/23	4,167.87			-0.04%			m
05/02/23	4,119.58			-1.16%			m
05/03/23	4,090.75			-0.70%			m
05/04/23	4,061.22			-0.72%			m
05/05/23	4,136.25			1.85%			P
05/08/23	4,138.12			0.05%			P
05/09/23	4,119.17			-0.46%			m
05/10/23	4,137.64			0.45%			P
05/11/23	4,130.62			-0.17%			m
05/12/23	4,124.08			-0.16%			m
5/15/2023	4,136.28			0.30%			P
5/16/2023	4,109.90			-0.64%			m
5/17/2023	4,158.77			1.19%			P
5/18/2023	4,198.05			0.94%			P
5/19/2023	4,191.98			-0.14%			m
5/22/2023	4,192.63			0.02%			P
5/23/2023	4,141.58			-1.22%			m
5/24/2023	4,115.24			-0.64%			m
5/25/2023	4,151.28			0.88%			P
5/26/2023	4,205.45			1.30%			P
NOTE
1. CLOSE: The S&P 500 Index’s Closing
2. %CH: The Percent Change.
3. m/P: minus/Plus.
4. Data Source: Yahoo Finance
5. * is less than 0.05% IN THE ABSOLUTE VALUE.
Table 2: The m/P on Friday
Mar., 2023, Apr. 2023, and May 26, 2023
Month		Date
Mar.		3	10		17	24		31
m/P		P	m		m	P		P
Apr.		6	14		21	28		*
m/P		P	m		P	P		*
May		5	12		19	26		*
m/P		P	m		m	P		*
NOTE
1. Data Source: Yahoo Finance.
2. Author made Table. 2, by using Table 1.

Click to enlarge

Table 1 counts 1) 1″m”/1″P”was 12 vs. 6 (“m” had EDGE), 2) 2″m”/2″P” was: 4 vs. 7 (“P” had BIG EDGE), 3″m”/3″P” was: 1 vs. 4 (“P” had BIG EDGE), 4″m”/4″P” was 1 vs. 1 (EVEN).

“P” added another BIG EDGE on 2″m”/2″P (4 vs. 7) on the top of one BIG EDGE on 3″m”/3″p” (! vs. 4), making 2 BIG EDGE.

In Table 2, “P” had 3 votes out of 5 in March, 3 votes out of 4 in Apr., and 2 votes in May. While “m” got 2 votes out of 5 in March, 1 vote out of 4 in Apr., 2 in May,

The “P” vs. “m” was 8 vs. 5.

As a result, “P” had not only a significant EDGE over “m” but also still favorable votes (9 vs. 5) over “m”.

Since $3,970.25 on Feb. 28, the S&P 500 Index has steadily advanced to $4,109.31 on Mar. 31 (+3.50%), $4,169.48 on Apr. 28 (+1.46%), and $4,205.45 on May 26 (+0.86%).

Check this outstanding performance of the S&P 500 Index with Yahoo Finance.

In an ordinary economy, which has not been distorted by GR and PR, a recession is a healthy part of business cycles to do a needed adjustment of any disequilibrium that had occurred during an expansion process.

We call it as a garden-variety recession [GVR], which starts at a peak of business activity, or real GDI, and ends at a trough, and then an expansion starts. When we would not expect a GVR due mainly to any external shocks, it would be impossible to forecast a recession.

A typical business cycle starts a bear market (which is a major component for Leading Indicator), and we expect a recession in about six months, and then a recession that sustains for anywhere between six months to one year.

5 Investment Packs [IPs] for the Starting Year 1964 (Age 25)

Author, as an Excel expert, designed three Excel templates: Table 3, Table 4., and Table 5. In my 48 articles since 2011, many Excel tables have contained.

Table 3. IP #5 One Year as of Age 26
1965	4% Monthly	5% Monthly	6% Monthly
Month	Compounded	Compounded	Compounded
Jan	$10,000.00	$10,000.00	$10,000.00
Beb	$20,033.33	$20,041.67	$20,050.00
Mar	$30,100.11	$30,125.17	$30,150.25
Apr	$40,200.44	$40,250.70	$40,301.00
May	$50,334.45	$50,418.41	$50,502.51
Jun	$60,502.23	$60,628.48	$60,755.02
Jul	$70,703.90	$70,881.10	$71,058.79
Aug	$80,939.58	$81,176.44	$81,414.09
Sep	$91,209.38	$91,514.68	$91,821.16
Oct	$101,513.41	$101,895.99	$102,280.26
Nov	$111,851.79	$112,320.55	$112,791.67
Dec	$122,224.63	$122,788.56	$123,355.62
NOTE
The Table is designed by Author.

Click to enlarge

In the starting year, 1964, at age 25, I invested $10,000 every month. Table 3 shows my monthly investment capital [IC], compounded each month by annual interest (0.04, 0.05, and 0.06) or monthly (0.033333…, 0.041666…, and 0.05).

From now on, I’ll state only my IC on 5% in the middle column.

As of Dec. 1964, my IC was $122,788.58, which are $120,000 (invest money) and $2,788.56 (earned interest).

Table 4. 5 IPs (IP #5 TO IP #1) as of Age 30
YEAR	4% Annually	5% Annually	6% Annually	IP #
1965	$122,224.63	$122,788.56	$123,355.62	IP #5
1966	$127,113.61	$128,927.99	$130,756.96	IP #4
1967	$132,198.16	$135,374.38	$138,602.38	IP #3
1968	$137,486.08	$142,143.10	$146,918.52	IP #2
1969	$142,985.53	$149,250.26	$155,733.63	IP #1
TOTAL	$662,008.01	$678,484.29	$695,367.12	TOTAL
NOTE
The Table is designed by Author.

Click to enlarge

The following four years (from 1965 to 1969) after the starting year (1964), I continued investing $10,000 each month.

The total IC for five years is $678,484.29, breaking down into $600,000 (invest money) and $78,484.29 (earned interest), as shown in Table 4.

Table 5. 5 IPs (IP #5 TO IP #1) as of Age 30 to 45
YEAR	4% Annually	5% Annually	6% Annually	AGE
1969	$662,008.01	$678,484.29	$695,367.12	30
1970	$688,488.33	$712,408.50	$737,089.15	31
1971	$716,027.87	$748,028.93	$781,314.49	32
1972	$744,668.98	$785,430.37	$828,193.36	33
1973	$774,455.74	$824,701.89	$877,884.97	34
1974	$805,433.97	$865,936.99	$930,558.06	35
1975	$837,651.33	$909,233.84	$986,391.55	36
1976	$871,157.38	$954,695.53	$1,045,575.04	37
1977	$906,003.68	$1,002,430.31	$1,108,309.54	38
1978	$942,243.82	$1,052,551.82	$1,174,808.11	39
1979	$979,933.58	$1,105,179.41	$1,245,296.60	40
1980	$1,019,130.92	$1,160,438.38	$1,320,014.40	41
1981	$1,059,896.16	$1,218,460.30	$1,399,215.26	42
1982	$1,102,292.00	$1,279,383.32	$1,483,168.18	43
1983	$1,146,383.68	$1,343,352.48	$1,572,158.27	44
1985	$1,192,239.03	$1,410,520.11	$1,666,487.76	45
NOTE
The Table is designed by Author.

Click to enlarge

Table 5 summarizes my total IC for a whopping 15 years (from 1969 to 1985). I became a millionaire in 1977, Age 38, when I was in NYU.

I do believe that one Excel table is worth more than a thousand comments or a hundred colorful charts/graphics.

My Investment Capital of $1.4 million seems to be understated because: 1) the dividends are excluded, 2) inflation seems to have been overstated, in my opinion, and 3) the traditional growth formula is asymmetrical, overstating upward, and understating downward. I will detail it in the next installment, Part 3.

The “72 Rule”

We have a handy tool to know the real dollar compared to the nominal dollar. As a layman, like I and you, we can use the so-called “72 rule”.

For example, the “72/6” (where 6 is 6%) is 12, meaning that a real dollar will be a half of a nominal dollar in 12 years.

As a result, my Investment Capital of $1.4 Million in Nominal dollar is about $0.7 Million in Real (inflation adjusted) Dollar, as of 1985, age 45.

Concluding Remarks

Do you learn something from the article?

As described, a little bit earlier, a few years of delaying marriage, or a slightly higher of interest rates would make a huge difference in my final investment capital in 20 years.

Compare the first column (4%) with the second column (5%) and the third column (6%) in 1985. The differences are remarkable: 1.2M for 4%, 1.4M for 5%, and 1.7M for 6%.

Recently some bearish writers try to influence the market, by posting somewhat invalid projections, such as “S&P 2,000” or a Huge Market Crash which is more than -50%, without any reliable supporting analysis. Not only this attempt is silly but also harms many investors.

We do not have any ethical rule in the law, but we must refrain from any “wrong promotions” on the market.

In the same token, investors should not entertain the promoters with so many comments, by wasting their valuable investing time.

I am dedicating this article to General Douglas MacArthur and his army to land on Inchon Harbor from an aircraft carrier on September 28, 1950, when I, age 11, was freed from the communist occupation in Seoul.

On Memorial Day every year, I sincerely pay homage to the fallen soldiers in their very young ages.