(Topic ID: 175889)

Stock Market Traders?


By kpg

3 years ago



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    #551 2 years ago
    Quoted from investingdad:

    So after you pay taxes on gains, do you expect the return on the home improvements to exceed what your investments will return? If not, I'd think a HELOC would be better...or save up what you need in cash if the work isn't critical, that's the most prudent option.

    That's what I was trying to articulate above - I have no idea. I have to weigh the long term gains on the house against performance in the same period of time (say 5-10 years) of my portfolio ... Who the hell knows! Lol

    #552 2 years ago
    Quoted from Pintucky:

    Same here, Iceman. Pays nice dividend too.
    I love your analysis of the market. You have done your homework. While I've got Apple, Google, and all the other 'big boys' in my portfolio, I have recently loaded up on Ten Cent Holdings (TCEHY). Man, that stock has skyrocketed since September. I just put another $15,000 in it. I think it will be the next Amazon in the Orient. I'm getting out of the everyday stocks like CPG, PM, JNJ, KO . . . they paid respectible dividends but the growth rate was too slow for me. I'm 70 and I am getting away for the long hold stocks. Have had great success with RXL, another rapid climber, and Skyworks. I bought about $500 worth of it several years ago, and that little bit is now worth over $16.000 now.
    I bought BABA when it was first offered, just ton a lark. That baby has climbed too. I bought it as a gamble, just like I did TESLA. I'm in those 2 for the long haul hoping for a big payoff someday. And Adobe . . . of all things . . . has made me a shit pot full of money in the last 2 years.
    I've got a couple of REITs brewing. MAIN is doing great and paying nice dividends.
    I enjoy reading your comments along with all the rest on here just to see how much stock savvy I have . . .
    Mike in Kentucky

    Well its kind of my day job Mike! Yes I'm a good guy lawyer, estate planning, and CPA tax guy BUT I make my living as an RIA (registered investment advisor).

    I add in the Wills/Trust and tax planning as part of my service as an advisor for no additional cost. I charge 80 basis points down to 50 basis points depending on AUM. And manage about $300 million dollars.

    That said, I'm not giving out investment advice here to be relied upon because everybody's personal situation is different and people should be GOALS oriented and NOT just chasing returns. Power of compounding. Tortoise versus the hare.

    My favorite quote of Buffet for clients is "Don't risk what you HAVE and you NEED, for what you DON'T HAVE and DON'T NEED". Don't take undue risk unless you actually NEED a stable of Ferrari's.

    BABA is real Amazon playing in a much bigger market like TCEHY. Tesla? Well, what a story. So overvalued its unreal. Musk is genius and master BS artist, the quarterly conference calls are hilarious, especially the last one.

    If you believe in electric cars as a future, how about lithium battery companies. I like FMC, more diversified amongst the big three and poised for the future.

    Ahhh yes, SWKS, been a long term winner for us as well. Tied to Apple. Backed up the truck again last year at $59, sitting now at $113 and still undervalued and trading at a HUGE discount to the market and the sector.

    For the first time in years I'm buying INTC, its going higher. Sold out too early on NVDA.

    Like I said, watch that 10 yr. treasury rate. Be wary as it rises next year.

    #553 2 years ago
    Quoted from iceman44:

    Sold out too early on NVDA.

    Amen to that. Me too

    #554 2 years ago
    Quoted from investingdad:

    So when you get out of the market and into cash, how do you know when to get back in?
    For that matter, how do you know when to get out in the first place?
    When you sell a big gaining stock, do you immediately have another in mind to buy? How do you find the winners consistently?

    This is my strategy for 'getting in, and out' of the market. Right now the Market is over-priced. Can it go higher? yes. Can it stay over priced for years to come? yes. Is it possible it will not ever have a big drop again? No. The one thing you can always count on, is that there WILL be a sudden and steep drop at some point in the future.

    Until then, I am not 100% cash. I'm 75-50% cash. Some opportunities can always be found in any market. The stuff I'm holding is mostly big blue chip multi billion dollar companies. Most of them also pay big dividends (though, while most people will tell you a dividend increases your 'safety' it can also be a liability when cut... *looks at TEVA*) anyway... In the event these companies have a huge decrease in value, I will be comfortable just buying more. These companies are not going out of business anytime soon. but I need to have the CASH to buy more. That's the most important part.

    If a Stock drops 50% after you buy it, it needs to increase 100% just to become par again. Look at any chart and its clear the movement up is almost always a very slow steady climb. But the drops are sudden and steep. It could be years before you just get your money back, much less start making money on the investment.

    For simple math, I put $200 into the stock Market. The market crashes 50%. I need to get a 100% increase in value on my stocks to break an even $200 and recover those losses.

    But let's say I have $100 in the market, $100 in Cash. Market Crashes 50%. I ADD the $100 to my position after the crash. I now only need the values to increase 35% to achieve my original (now $200) investment, and recover my losses. If the values return to their original pre-crash value, I'll have $300, instead of $200.

    You don't want to get out of the market entirely. You could be missing out on years of overpriced growth. But stay 50% in, and you get 50% that growth, and are only exposing yourself to 35% of the risk. With re-investment, dividends, etc... this all gets very complicated... But boil it down to basic components, its just how much greed/risk ratio are you comfortable with?

    To your other questions,

    When I sell a Big gaining stock, I almost never sell all of it. I try to not have any 1 stock be more than 5% of my portfolio. If a stock does super well, I'll sell it off to a 2% position. I'm never in a hurry to re-invest that cash. The one thing you can always count on with the market is slow growth, and sudden losses. You want to be excited when you see a sudden drop in value, because you have a lot of cash to invest on that opportunity.

    As for finding winners, that's really up to everyone's individual risk comfort level. Personally,
    1) I don't invest in any company that doesn't make money (Tesla).
    2) I try not to invest in any company with a market cap lower than a Billion.
    3)I also try to find low P/E values, and solid Dividends.
    4) The last and more tricky thing I look for is companies that took a nose dive because of 'news' and not fundamentals. (MNK recently as an example. Their sales are slowing, but they are making MORE money, but the value of the stock plummeted, because of the slow down on sales. So I picked some up. Made 6% today on the bounce.)

    These rules become less tangible as the list goes on, and carry less weight in my decision making as the list goes on. make your own list of rules, write them down, and look at that list any time you want to buy or sell a stock. Write notes as to WHY you bought it, and what your goal was for it.

    in my DIS purchase, I Bought it last month because it always makes money. It is a HUGE 159Billion company with a clear road map on how it wants to become bigger. It was at a very low 52 week average. Has a 1.5% dividend (meh). In the past 2 years it has reached value of up to at least $115 three times.

    -I will begin selling DIS when it reaches $120. and I will sell more and more if it continues upward.
    -If DIS has a sudden drop in value, some months later once the price stabilizes, I'll double my position.

    #555 2 years ago

    The great thing about index funds is the diversity and distributed risk that means few instances where I need to worry about 20%+ losses.

    How do you know the market is over priced?

    What happens if you're not in the market on the 20% of days that yield 80% of the returns?

    #556 2 years ago

    Hey Iceman,
    What 's your position and outlook for this Qualcomm and Broadcom buy out?

    #557 2 years ago
    Quoted from golfingdad1:

    Hey Iceman,
    What 's your position and outlook for this Qualcomm and Broadcom buy out?

    Hard to go against Hock Tan, CEO, but we are talking about a MOUNTAIN OF DEBT, but they are building a monster if it goes through.

    Check out this take, good summary of the deal. If you aren't on Seeking Alpha its a great deep dive of everything!

    https://seekingalpha.com/article/4122722-broadcom-analysis-complicated-qualcomm-nxp-deal

    #559 2 years ago
    Quoted from iceman44:

    Hard to go against Hock Tan, CEO, but we are talking about a MOUNTAIN OF DEBT, but they are building a monster if it goes through.
    Check out this take, good summary of the deal. If you aren't on Seeking Alpha its a great deep dive of everything!
    https://seekingalpha.com/article/4122722-broadcom-analysis-complicated-qualcomm-nxp-deal

    Thanks Ice,
    Hold a lot of Qcom. And have for along time .
    Things have been bumpy, real bumpy.
    Sold 25% @ 71 last year but ever since down hill and until then downhill. I don't want to be left holding the bag again and sit at 50 something for the next 3 to 5 years . If this doesnt go through and litigation begins with Apple.
    Any suggestions, I don't see it getting to 70 unless it goes through, but if I does with brdcom who knows where it could go if anywhere.

    #560 2 years ago
    Quoted from investingdad:

    The great thing about index funds is the diversity and distributed risk that means few instances where I need to worry about 20%+ losses.
    How do you know the market is over priced?
    What happens if you're not in the market on the 20% of days that yield 80% of the returns?

    The market is not a static, binary, predictable thing. There are so many variables its impossible to 'know' whats going to happen, ever. So you need to take a bunch of info in, and make your best educated guess as to whats 'likely' to happen...

    You can assume the market is overpriced by checking a few things:
    https://valuespreadsheet.com/value-investing-blog/5-ways-to-know-if-the-stock-market-is-overvalued-or-undervalued

    PE ratio of the indexes, = Currently high but not historically crazy
    The Shiller PE = Historically by this metric we are in big trouble
    dividend yields = (I personally think this has more to do with an evolution in business practices than market health)
    Interest rates = Scary stuff there, big trouble
    Market cap to GDP = again, scary big trouble

    Index investing protects you from dips and drops of individual companies, but it does not protect you from full market drops. You are absolutely still at risk for a 20%+ drop. That said, the market also ALWAYS recovers given enough time. So if you are 'comfortable' taking a 20%+ drop in the short term knowing it may be 5-10 years before you get that money back, then don't sweat it. Put that money in an index and just forget about it for a few decades. especially if you are going to keep adding money regularly into your account. You'll be fine.

    as for not being in the market for the 20% of days that makes 80% of the profits, If I am still 50% in the market with half of my money, half of it IS making those overpriced profits. Recognizing that when things are exploding up, I should be taking profits off the table and reducing my risk constantly.

    I have a goal of making an 8-10% return a year on average. If I have a stock that's up 15%, I will cash 50-75% of that in, and lock that return. When that stock continues to raise another 30%, I do not kick myself for taking profits earlier. I am happy that I got that much closer to my goal, and sell off the rest. If I am reaching my goals, there is no reason to RISK loosing big money just because I didn't want to miss out on 'maybe' more than my goals. Gotta keep that greed in check.

    Ive been told I have unrealistic goals, and I've been told I'm too conservative and am missing out on big yields, ultimately, do what works for you. I am very happy using my method because I'm reaching my goals. Other people have other goals, and other methods. To each their own.

    #561 2 years ago
    Quoted from golfingdad1:

    Thanks Ice,
    Hold a lot of Qcom. And have for along time .
    Things have been bumpy, real bumpy.
    Sold 25% @ 71 last year but ever since down hill and until then downhill. I don't want to be left holding the bag again and sit at 50 something for the next 3 to 5 years . If this doesnt go through and litigation begins with Apple.
    Any suggestions, I don't see it getting to 70 unless it goes through, but if I does with brdcom who knows where it could go if anywhere.

    Yeah I think this is certainly good for you. And I’m not buying the Valeant argument. Certainly wouldn’t want to battle Apple and this buyout helps resolve that issue

    I think this $70 bid will end up in the high $70’s or $80 bucks a share when the dust settles

    If QCOM stays solo I agree, I wouldn’t want to ride it back down to the 50’s if the deal doesn’t go through and I would get out. Plenty of better places to be

    It’s been a great run for the chipmakers. I’m still on SWKS. Somebody will buy them at some point. If this deal didn’t go through they would prob be next up

    All of this M&A activity in chips a good sign imo. Intc and Amd was a shot across the Nvda bow

    #562 2 years ago

    If you go cash, what the heck do you do with it? While there's no apparent downturn it just seems crazy to cash on gains, pay the tax and sit on pile of cash. What am I missing here?

    #563 2 years ago
    Quoted from Kkuoppamaki:

    If you go cash, what the heck do you do with it? While there's no apparent downturn it just seems crazy to cash on gains, pay the tax and sit on pile of cash. What am I missing here?

    In my view, you're not missing anything. I've shared this view for the last 20+ years of investing.

    #564 2 years ago
    Quoted from Kkuoppamaki:

    If you go cash, what the heck do you do with it? While there's no apparent downturn it just seems crazy to cash on gains, pay the tax and sit on pile of cash. What am I missing here?

    Yes, that is a real conundrum! Where do you place the cash? Like many people here I have been in the market a long time, since 1980 for me. Only once did I pull everything out of the market. That was back in early 2000 when stocks were going crazy. At the time I congratulated myself in not getting stuck in a tough bear market. Then it became, okay when do I get back in? I waited two years and I still didn't catch the bottom. At least then you could put your money in mid-term bonds and get a return in the high single digits. When I saw the market screaming down like a locomotive in 2008, I just hung on to everything and rode out the storm. If there was a great place to park cash right now, I believe that fact would already be reflected in the market. Given that, I think that the biggest threat to this bull market will be when other less risky alternatives offer a better return than they are today. So, keep a close eye on interest rates.

    Side note. In 1980 when I first became interested in the market a friend of mine told me that I just had to read "Security Analysis" by Graham and Dodd. I said okay, sure I will buy that book. Holy cow! IIRC, it cost me $35 and was so far over my head I couldn't reach it from the top of a ladder! He had stacks of Barron's sitting around and talked about charts, heads and shoulders plus other techniques that made my head swim. It was fun in the beginnng, but when the recession hit throughout 1981-82, it seemed like nothing panned out as it should, ha!

    So just be careful out there, it is easy to feel smart in a bull market.

    #565 2 years ago
    Quoted from iceman44:

    Well its kind of my day job Mike! Yes I'm a good guy lawyer, estate planning, and CPA tax guy BUT I make my living as an RIA (registered investment advisor).
    I add in the Wills/Trust and tax planning as part of my service as an advisor for no additional cost. I charge 80 basis points down to 50 basis points depending on AUM. And manage about $300 million dollars.
    That said, I'm not giving out investment advice here to be relied upon because everybody's personal situation is different and people should be GOALS oriented and NOT just chasing returns. Power of compounding. Tortoise versus the hare.
    My favorite quote of Buffet for clients is "Don't risk what you HAVE and you NEED, for what you DON'T HAVE and DON'T NEED". Don't take undue risk unless you actually NEED a stable of Ferrari's.
    BABA is real Amazon playing in a much bigger market like TCEHY. Tesla? Well, what a story. So overvalued its unreal. Musk is genius and master BS artist, the quarterly conference calls are hilarious, especially the last one.
    If you believe in electric cars as a future, how about lithium battery companies. I like FMC, more diversified amongst the big three and poised for the future.
    Ahhh yes, SWKS, been a long term winner for us as well. Tied to Apple. Backed up the truck again last year at $59, sitting now at $113 and still undervalued and trading at a HUGE discount to the market and the sector.
    For the first time in years I'm buying INTC, its going higher. Sold out too early on NVDA.
    Like I said, watch that 10 yr. treasury rate. Be wary as it rises next year.

    Hey Iceman! You sound like just the kind of advisor I am looking for, but I am in PA and you are in TX. Any suggestions on how to go about finding a highly qualified and experienced investment advisor like you in the eastern Pa area? I also need a tax advisor/CPA since I recently bought two investment properties and am not sure the most favorable way to treat them for tax time.
    When I go to see the free advisors offered by Vanguard or Fidelity, it seems to me that they are much more interested in selling me their company's offerings rather than what is necessarily best for me. Also, they will not consider anything out of the box like rental properties, precious metals, annuities, etc. Besides that, they don't seem to want to make any allowances for the fact that I am currently 66 y/o. They suggest that I should plan to invest 100% of my non-stock holdings over the course of the next year in the market. When I tell them that I no longer work and am concerned since the bull market has run so long and recovering from a big downturn could be difficult for me, they tell me that over time everything will be ok and the market always rebounds. But I am not 26 or 36 anymore, and realistically how many more years can I afford to wait out a major downturn just to get back to even? Being that I don't work, I am no longer able to dollar cost average my salary into new purchases during a downturn as I once did, making recovery even more difficult. Certainly, I hope to live well into my 80's or 90's, but I don't necessarily need to be extremely wealthy when I'm 86 and not able to enjoy it! I would like a plan that provides for now, as well as later. Any recommendations on where to turn for advice?

    #566 2 years ago
    Quoted from sbmania:

    Hey Iceman! You sound like just the kind of advisor I am looking for, but I am in PA and you are in TX. Any suggestions on how to go about finding a highly qualified and experienced investment advisor like you in the eastern Pa area? I also need a tax advisor/CPA since I recently bought two investment properties and am not sure the most favorable way to treat them for tax time.
    When I go to see the free advisors offered by Vanguard or Fidelity, it seems to me that they are much more interested in selling me their company's offerings rather than what is necessarily best for me. Also, they will not consider anything out of the box like rental properties, precious metals, annuities, etc. Besides that, they don't seem to want to make any allowances for the fact that I am currently 66 y/o. They suggest that I should plan to invest 100% of my non-stock holdings over the course of the next year in the market. When I tell them that I no longer work and am concerned since the bull market has run so long and recovering from a big downturn could be difficult for me, they tell me that over time everything will be ok and the market always rebounds. But I am not 26 or 36 anymore, and realistically how many more years can I afford to wait out a major downturn just to get back to even? Being that I don't work, I am no longer able to dollar cost average my salary into new purchases during a downturn as I once did, making recovery even more difficult. Certainly, I hope to live well into my 80's or 90's, but I don't necessarily need to be extremely wealthy when I'm 86 and not able to enjoy it! I would like a plan that provides for now, as well as later. Any recommendations on where to turn for advice?

    My favorite Warren Buffet saying applies here, "Don't risk what you have and you need, for what you don't have and don't need".

    Coming up with a game plan at 66 is crucial, that takes into account taxes, inflation, RMD's etc. RMD's are right around the corner. Need to be "tax diversified" as well.

    The power of compounding is so HUGE. And in retirement, it might be difficult to suffer a 2008 crash again, although I think it will be more like 2000-2003 when it comes, 3 yrs of double digit losses.

    That's also why my license is with TD Ameritrade, they are totally independent, no proprietary products like the other two, although Vanguard is great for fees.

    The advice you got of "don't worry it always comes back" is why a lot of people had to go back to work in 2008. That's terrible advice at your stage in life!

    There are some fantastic options out there to get some excellent returns and protect principal.

    Bottom line, its tough to find someone that actually cares about you, versus selling something for their benefit, but you need someone who is fee based and has a "fiduciary duty" to do what's right! What a concept.

    1 month later
    #567 2 years ago

    Well its that time of year again Christmas. 3 years ago i got tired of trying to figure out what the heck to get my 5 kids . More stuff that nobody could even remember what it was or what happened to it so i decided what could possibly be better than money they can't spend for 40 or 50 years that would grow tax free. I started a ROTH IRA for each one with 10 shares of APPL at around 105 and that was a good pick . 2 years ago money was tight so had the brooker pick a mutual fund put in 550 bucks and its up $72 bucks in 2 years. Last year i got them 2 shares of AMZN at $750 and that ones kicken ass.This year looking at BABA , COST or TCEHY. Mainly wanting good long term stocks with lots of growth . So calling on fellow pinsider's for some help picking this years presents. After all how could we afford these high priced pins if we didn't know how to make a buck

    #568 2 years ago

    Alibaba is a giant, made me some money in the last couple years.

    #569 2 years ago
    Quoted from plowpusher:

    So calling on fellow pinsider's for some help picking this years presents.

    TECHY is my number one pick. RXL is doing very good. MIXT. SPXL. XLK. They are all kicking ass and look to have plenty of room to grow. I'm heavy in all of 'em.

    Mike in Kentucky

    #570 2 years ago

    If you think Stock Market is too risky constantly reinvest into CDs. If you started in 1980 with a CD and just kept reinvesting with new CDs you would have avoided the all bear markets and come out way on top.

    #571 2 years ago
    Quoted from barakandl:

    If you think Stock Market is too risky constantly reinvest into CDs. If you started in 1980 with a CD and just kept reinvesting with new CDs you would have avoided the all bear markets and come out way on top.

    Right now CD's are returning around 2.4% on the high end. So you would be locking your money up for 5 years at 2.4%. Sure it's safe. If you think the market will have a big correction in the timeframe I guess it's not a bad play...but if you guess wrong that's a lot of coin left on the table.

    #572 2 years ago

    also a conservative choice is to invest in a total stock market ETF like 'VTI'. regularly put (x) amount in. When the market has a big correction or goes bear, put in (2x) instead. Market always recovers, it always goes up over a long enough time period. If you can ride out the downturns, and see them as 'the market is on sale' you'll make big returns on the way back up.

    Its not an exciting strategy, but it will work.

    1 week later
    #573 2 years ago

    predictions for 2018

    FB & AMZN will both beat the S&P but there returns will be half of 2017 return

    Pullback of %5 or more between Mar 31 and May 15

    10 yr will break through 3% but end the yr under %2.85

    The xle will again underperform the S&P

    Lets hear your predictions for 2018 no bitcoin

    #574 2 years ago

    I predict our portfolio will again closely match whatever the S&P does.

    Our 2017 return was a little over 20%.

    My biggest effort was clicking 'buy' for each monthly purchase of additional fund shares.

    Simplicity!

    #575 2 years ago

    My return was ~20% overall but that was brought down because I’m holding 25% Bonds would have been lower due to that except I own a lot of APPL

    25% of my assets are in US ETFs total stock
    20% Total international funds
    25% US Bonds
    25% indivual US stocks
    5% REITS

    #576 2 years ago
    Quoted from rai:

    My return was ~20% overall but that was brought down because I’m holding 25% Bonds would have been lower due to that except I own a lot of APPL
    25% of my assets are in US ETFs total stock
    20% Total international funds
    25% US Bonds
    25% indivual US stocks
    5% REITS

    Ditto.

    We are about 25% domestic bonds, but we have a single stock holding in my wife's company that had outsized gains.

    #577 2 years ago

    I'm light on bonds, so should move some money from stock to bonds. Any recommendations?

    #578 2 years ago
    Quoted from Kkuoppamaki:

    I'm light on bonds, so should move some money from stock to bonds. Any recommendations?

    Depends on a lot of things, how old you are and how much money do you have, how stable is your income, do you have a pension etc..

    If you don’t have a lot of money, I wouldn’t worry too much because you don’t have as much to lose.

    The basic (super safe) rule of thumb was age in bonds but I’m totally at half my age in bonds, I was actually switching some out of stocks into bonds just to keep my 25% ratio, if I had not switched anything out of stocks I’d probably be at 20% bonds.

    You can do a few things either switch some out of stocks and into bonds or just increase more deposits (new money) into bonds rather than stocks.

    I realize stocks are hot but bonds are good for keeping your money safe from stock market crashes, the worst bond market crash was single digit but the worst stock market yearly loss was probably 50-60%.

    There’s a little book on Amazon that explains bonds easily it’s called ‘Why bother with Bonds.’ $6 on kindle amazon.com link »

    Just to clarify Bonds are not for growth they are for keeping what you have, stocks make money but as you may notice stocks are currently getting more expensive.

    It’s like mountain climbing you get so high and you set a spike to keep you at that level should things go wrong.

    Here’s a Picture

    8933F74A-22BF-469B-824B-1A3C9AEF1452 (resized).jpeg

    And another this picture does not include that last several years and would be nice if there was a line with 75:25 stock:bond portfolio.

    DC9B6B9C-5FE3-44C0-B9BF-544BB3893112 (resized).jpeg

    #579 2 years ago
    Quoted from scarybeard:

    also a conservative choice is to invest in a total stock market ETF like 'VTI'. regularly put (x) amount in. When the market has a big correction or goes bear, put in (2x) instead. Market always recovers, it always goes up over a long enough time period. If you can ride out the downturns, and see them as 'the market is on sale' you'll make big returns on the way back up.
    Its not an exciting strategy, but it will work.

    I always scratch my head @ this type of comment.

    To put in 2x when “stocks are on sale” means your normal daily plan is to only invest half of your abilities (AKA horde cash, underinvest & take on ongoing opportunity losses) just to be able to buy double the stock when it’s “on sale”.

    That’s market timing not dollar cost averaging.

    Eventually when you only invest half of your net disposable income you run out of shit to pay off, your checking/savings hit six figures, then another six figures & so on, just so you can buy 2x when SHTF?

    Fuck it, just buy nothing until the next collapse then. The 50% you bought during the upward trajectory ain’t worth shit when it hits the fan & you’re buying equities “on sale” anyway.

    It sure seems happens every 10 years anyway right?

    #580 2 years ago
    Quoted from scarybeard:

    As for finding winners, that's really up to everyone's individual risk comfort level. Personally,
    1) I don't invest in any company that doesn't make money (Tesla).

    I agree. I dumped my Heavy Tilted to Tesla ETF in the summer and doubled down on sensible SP500 fund. My portfolio has been rockin' ever sense!

    I suggest you all read the book Buffetology and the idea of long term investing for ROE. Day trading is fun but the automated high frequency trading has really made it difficult for the small guy to make a huge profit. The buy and hold is a safe solid bet.

    #581 2 years ago

    Remember bonds when held to maturity are a safe option bond funds are not

    #582 2 years ago
    Quoted from JY64:

    Remember bonds when held to maturity are a safe option bond funds are not

    Bond funds own real bonds and those bonds do they have maturity. Say a fund owns 500 Bonds they probably mature some every week and the bond fund collects the face value just like if you held an individual or bond ladder.

    Then the bond fund buys more bonds to replace the expired bonds, so if bond yields are going up they will be replacing with higher yield bonds.

    I’m talking about bond index funds, not sure about active bond funds who might trade bonds before they mature but if you understand how bond work, the math is priced in. In other words if you sell a bond before it matures you should get out the appropriate amount of gains.

    Example

    Suppose there was a $1000 ten year bond paying 4% interest. The bond fund would get $40 a year plus $1000 at maturity. If the bond was not held to maturity, but rather sold early the bond fund would receive whatever the bond was worth at the time. So it doesn’t make a bond fund any less safe if it doesn’t hold the bond to duration, it still gets the par value of the bond when it’s sold.

    Bond values do fluxuate in value, if a 5 year to maturity bond was only giving 4% it would not be worth $1000 at the time when you could buy a new 10 year bond giving 5% so selling a lower yield bond might need to take $910 instead of $1000 but you’d make up for that loss with a higher paying bond.

    Also bond funds hold multiple bonds which is better for safety in case one bond fails like GM bonds did, if a bond fund held 1000 bonds one or a few failures won’t matter as much.

    With government bonds like US treasury bonds there is basically no chance of failure so holding individual treasury bonds is ok.

    -1
    #583 2 years ago

    Bonds value go's down as rates go up this is meaningless if held to maturity. This does effect the price of bond funds it has just that is has been so long sense rates have gone up they feel safe. NMT a muni bond fund 5/30/08 close $13.61 12/31/08 $9.70 funds do not guarantee return on investment

    #584 2 years ago
    Quoted from JY64:

    Bonds value go's down as rates go up this is meaningless if held to maturity. This does effect the price of bond funds it has just that is has been so long sense rates have gone up they feel safe. NMT a muni bond fund 5/30/08 close $13.61 12/31/08 $9.70 funds do not guarantee return on investment

    come on man, fishing for data much?

    You pick a closed end bond muni fund (that no one has heard of) to show that bond funds can lose money?

    How about pick a real bond fund like Vanguard Total Bond fund $190 Billion in assets that is all quality bonds (intermediate) one of the largest bond fund and if you only own one bond fund this would suffice.

    Here is a graph (with returns added in) not just the price of the ticker but with all gains from interest (bonds) and dividends (from the stocks).

    Starting with $10K the total stock index fund went to ~$4800 while the Bond fund *never* fell below $10K.

    Please note: it's the period of 07-08 for why you would own bonds, if you had $2 Millions in all stock you'd be under $1M at some time during that time less than a year. If you only had $50k and went to $23k no big deal but if you had large money you could lose millions that’s maybe a decade(s) worth of savings in a matter of less than a year.

    As I said prior, if you are older, if you have a lot of money, if you don't have a secure job or possible pension, you might not want to potentially lose 50%+ from your investment nest egg. Also note no promise that the stocks will recover as quickly as they did after 2008 with a lot of government bail outs and QE that helped stabilize the world economy.

    Blue line Bond fund, gold line Stock fund it took 4 years for the stocks to pass the bonds, if you had some percentage of bonds you could have sold some and bought more stocks when they were cheap.
    4A877D62-F667-43F8-A233-4B0F36839D40 (resized).png

    #586 2 years ago
    Quoted from JY64:

    As for your fund looked it up 10 yr annual return 3.81 the yield on my bond is higher then 3.81 is a joke

    They’re two different funds you can’t compare the return like that. Vanguard total bond fund has an intermediate term like 7-8 years while the other fund is like 20 years (long term) you should compare long term fund to long term not short term or intermediate fund. It’s also a closed fund so that has its own different type of movement that’s unlike open funds.

    People shorten up the funds to flatten out or lessen the loss, that means lower return. Think of cash as no maturity time you get no gain but no return. Take a long term bond get more upside but also a lot more downside that’s part of why your fund did better overall but the graph is not steady during the recession it lost money almost like it was a stock and had two years when it’s return was -19% and -14% but also years when it was +30-40% this may be great for returns but it’s not what I buy bunds for which is steady slow growth without a lot of huge gains and losses. There’s a saying take your risks on the stock side bonds should be for safety.

    If you know anything about investing it’s that gains are correlated with risk. IOW big gains you need to take the risk of big losses, I’m saying people usually buy bonds for safety, as seen in my graph above bond fund is a straight gradual up slope the bond fund you list has a graph almost more the stock fund meaning big dip (not as big) and big rebound (not as big). That is not what I look for in bonds, bonds should be the thing that lets you sleep well at night when you see 50% loss on a few months on stocks you don’t want to see 20% loss on bonds at the same time.

    #587 2 years ago
    Quoted from rai:

    They’re two different funds you can’t compare the return like that. Vanguard total bond fund has an intermediate term like 7-8 years while the other fund is like 20 years (long term) you should compare long term fund to long term not short term or intermediate fund.
    People shorten up the funds to flatten out or lessen the loss, that means lower return. Think of cash as no maturity time you get no gain but no return. Take a long term bond get more upside but also a lot more downside that’s part of why your fund did better overall but the graph is not steady during the recession it lost money almost like it was a stock and had two years when it’s return was -19% and -14% but also years when it was +30-40% this may be great for returns but it’s not what I buy bunds for which is steady slow growth without a lot of huge gains and losses. There’s a saying take your risks on the stock side bonds should be for safety.
    If you know anything about investing it’s that gains are correlated with risk. IOW big gains you need to take the risk of big losses, I’m saying people usually buy bonds for safety, as seen in my graph above bond fund is a straight gradual up slope the bond fund you list has a graph almost more the stock fund meaning big dip (not as big) and big rebound (not as big). That is not what I look for in bonds, bonds should be the thing that lets you sleep well at night when you see 50% loss on a few months on stocks you don’t want to see 20% loss on bonds at the same time.

    First let me say saying joke was uncalled for went to delete but you had answered . I look at fix income as just that income and rates have never been lower so although higher risk I prefer stocks with high div growth not high yield . I bought BLK in 2010 when div was $1.00 now div $2.50 yield on original investment over %6.I also picked up AMGN this yr %29.67 annualized growth over 5 yr . Picked up ITW this spring %15.47 annualized growth over 5 yr higher risk but when held long term will get high yield on original investment

    1 week later
    #588 2 years ago

    I looked back at my posts...looks like I had a pretty good year.

    I forgot to mention the 2nd purchase of TEVA, 2,000 shares at $13.

    I sold SLB, made a profit.

    I took a loss on the Harley Davison at $57 purchase, needed it for taxes. But I still own the shares I purchased at $47.

    Right now, I'm in a holding pattern. Market has taken off like a rocket ship...all the easy money has already been made. Now I'm sitting on some cash waiting for a buying opportunity.

    #589 2 years ago
    Quoted from Trekkie1978:

    I looked back at my posts...looks like I had a pretty good year.
    I forgot to mention the 2nd purchase of TEVA, 2,000 shares at $13.
    I sold SLB, made a profit.
    I took a loss on the Harley Davison at $57 purchase, needed it for taxes. But I still own the shares I purchased at $47.
    Right now, I'm in a holding pattern. Market has taken off like a rocket ship...all the easy money has already been made. Now I'm sitting on some cash waiting for a buying opportunity.

    You've identified the problem with investors timing the market and not being fully invested all the time per whatever asset ratio is appropriate for you.

    How do you know when it's a buying opportunity and what gains are you missing while waiting?

    #590 2 years ago
    Quoted from investingdad:

    How do you know when it's a buying opportunity and what gains are you missing while waiting?

    Just a feel for the market.

    If I miss out on a trade, I know there's always another one right after it.

    Anything I miss, I want to learn from.

    #591 2 years ago

    Proven fact that no one can "time the market"...no one.

    That being said in hindsight it will "appear" that many people timed the market perfectly...law of averages.

    #592 2 years ago
    Quoted from Astropin:

    Proven fact that no one can "time the market"...no one.
    That being said in hindsight it will "appear" that many people timed the market perfectly...law of averages.

    I purchased Enron when it was on the way down....

    #593 2 years ago

    "no one can time the market" is not true. On a long enough time line, it's very easy to time the market. There are good times to start getting in, and there are good times to start taking profits. If you are willing to be patient, and accept the risk that you will 'miss out' on some gains in exchange for not taking heavy losses, you can absolutely use 'time' to minimize risk.

    It's almost a guarantee that in the next 2 years the major indexes will take a 10% - 20% correction. (or more...) waiting for that correction, and then beginning to cost-dollar average in on the recovery, will provide you with the lowest risk returns.

    Likewise, if a new investor with 100k is told "Go all in now! It's taking off like a rocket and there's no timing these things!" then a week later watches 20k vanish from their account, they are likely going to panic out and stay out.

    The problem with how most investors give 'investing advise' is that they usually are looking at things from a 'How to MAKE THE MOST' mindset. The fear of missing out being their primary drive, and this imaginary competition they have with everyone else on who's getting the highest percentage returns. The goal of 'Make the most money as I can' is not a goal. It's a never ending cycle that can never be achieved. It starts to cross the same realm of gambling addiction. Most people unfortunately approach investing with the 'Make as much as I can' Mindset. It's human nature, which is multiplied and exploited by our culture.

    Goals are everything. Why are you investing? What are you working towards? The most common answers to those questions have to do with retirement lifestyle, and making sure your family that survives you has something to inherit. Those things have an estimated dollar value (x). Spend some time thinking about what (x) is for you. Then break that down to how much you need to save per year (with average return from the market) in order to reach that goal. If you have made your goal for the year, begin minimizing your risk. When people tell you "but you MIGHT be missing out on making (3X)!" remember that 3X is not your goal, and if you go leaping for it, you could get set back years. I've met people who were 'All In' on the 2009 crash and just THIS YEAR made par with their original valuation on those accounts...

    The market is complex, and human emotion and reaction to loss is even more complex. Simple rules like 'Always be all-in' may be sound mathematical advice, but people are not robots. Most individual investors loose money in the market then panic out, because they try to follow advice that conflicts with their gut instincts and emotions.

    All this to say, any simple rule applied to something as complex as the market, is probably not as simple as you think.

    #594 2 years ago
    Quoted from Astropin:

    Proven fact that no one can "time the market"...no one.
    That being said in hindsight it will "appear" that many people timed the market perfectly...law of averages.

    You don't need 7 paragraphs to be correct. Enjoy your upvote, Sir.

    #595 2 years ago

    I just hope the market starts out tomorrow the way it ended Thursday and Friday last week. I've been doing quite well on money I invested between 2000 and 2010. I just need 6 months or maybe 1 year in order to have enough to cash out, pay off all debts and have enough left over to have a decent rest of life. I'm 70, and to me, this is the critical stage of my entire life of trying to make and save money. If the market will just stay steady for awhile, modest increases and no major 'downs', that's all I'm hoping for. I'm just afraid of tomorrow, for some reason. It could be a big sell-off day. It was tempting for ME to take it while I can and seriously thought of cashing in at least half tomorrow, but decided tonight not to. If there are many others who actually do that, well . . . you know the rest of the story!

    #596 2 years ago
    Quoted from Pintucky:

    I just hope the market starts out tomorrow the way it ended Thursday and Friday last week. I've been doing quite well on money I invested between 2000 and 2010. I just need 6 months or maybe 1 year in order to have enough to cash out, pay off all debts and have enough left over to have a decent rest of life. I'm 70, and to me, this is the critical stage of my entire life of trying to make and save money. If the market will just stay steady for awhile, modest increases and no major 'downs', that's all I'm hoping for. I'm just afraid of tomorrow, for some reason. It could be a big sell-off day. It was tempting for ME to take it while I can and seriously thought of cashing in at least half tomorrow, but decided tonight not to. If there are many others who actually do that, well . . . you know the rest of the story!

    Is there something historically significant about tomorrow’s date and the stock market?

    #597 2 years ago
    Quoted from Pintucky:

    I just hope the market starts out tomorrow the way it ended Thursday and Friday last week. I've been doing quite well on money I invested between 2000 and 2010. I just need 6 months or maybe 1 year in order to have enough to cash out, pay off all debts and have enough left over to have a decent rest of life. I'm 70, and to me, this is the critical stage of my entire life of trying to make and save money. If the market will just stay steady for awhile, modest increases and no major 'downs', that's all I'm hoping for. I'm just afraid of tomorrow, for some reason. It could be a big sell-off day. It was tempting for ME to take it while I can and seriously thought of cashing in at least half tomorrow, but decided tonight not to. If there are many others who actually do that, well . . . you know the rest of the story!

    It seems like the market has gotten more volatile over time. That's not necessarily a bad thing (I think the overall avg returns have remained fairly stable)...but we seem to have quicker recoveries to market crashes with higher upswings and then sharper downturns. I don't know if AI trading taking over is having this effect or it's just a natural progression. But retiring at the wrong time (at the top) could really suck. Of course retiring at the bottom would be a major plus. Unfortunately you don't know where you landed hit until after the fact.

    I wish you the best of luck but it seems to me you're a pretty savvy guy and will do alright either way.

    #598 2 years ago
    Quoted from Astropin:

    It seems like the market has gotten more volatile over time.

    The VIX disagrees.

    Quoted from Astropin:

    But retiring at the wrong time (at the top) could really suck. Of course retiring at the bottom would be a major plus. Unfortunately you don't know where you landed hit until after the fact.

    Huh?

    #599 2 years ago
    Quoted from DCFAN:

    Is there something historically significant about tomorrow’s date and the stock market?

    The day after MLK day is Black Tuesday, replete with massive losses.

    #600 2 years ago

    It’s weird.

    Folks say “don’t time the market”

    Then Warren Buffet says “Be fearful when others are greedy”

    I look around right now & can almost hear Kanye’s “All fall down”

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