Contributors to this thread:
Surely with all the political banter allowed we can talk markets on here?
Any takes on the GME situation this week?
Like a lot of folks my age and younger I dipped in last year at the C-19 onset. Other than some hands-off retirement accounts I hadn’t ever taken interest prior. I don’t really have the time, balls and certainly not the knowledge to make a living day trading. Have primarily dabbled in ETFs and a few stocks I felt would recover nicely. Like anyone with a pulse I’ve done reasonably well the last 10 months. Going forward I’m most intrigued with sector specific ETFs.
Interested to read any thoughts on the matter. Who’s killing it with big plays day to day. And what strategies are out there. I can relate most to die hard bowhunters in this world, and I know there’s a few smart ones on here. Smarter than I anyway.
GME, and a few others this week, represent a very unique situation where "excess" short selling pressure was recognized and then met with a huge wave of positive sentiment and buying pressure from the masses, starting primarily with some redditers. This lead to an extreme incident of the short squeeze, where the positive price movement from increased buying pressure forced margin calls and therfore stock buys from the short sellers to close their positions. Leading to the cycle repeating itself and the overwhelming positive run up we've seen in GME this week.
The short squeeze is not a new phenomenon, but this was a particularly large event because of the huge wave of participants buying up shares. IMO, some of that buying pressure was also reinforced by the "let's screw the rich wall street guys" attitude that pervades much online discourse.
In short, I'm not touching it with a 10 foot pole.
I’m probably on the older end of those on this site. About 30 years ago, I started putting every extra penny I had, including all my annual bonus and part of my salary in an account with an investment advisor. We met face to face annually and occasionally on the phone. That money was invested in a broad range of stocks, mutual funds, bonds and some tax free munis. All the dividend from stocks that gave dividends were rolled into the account. We never rolled the dice on the next greatest thing, or tried to time the market. It was buy, hold, sell the losers occasionally, and re balance. Maybe there was some luck involved, but it’s well in to eight figures now. Maybe that strategy no longer applies, but I suspect that it does.
Well....seeing as how you asked. IMO the Robinhood folks will see some lawsuits or investigations coming their way due to their intentionally manipulating the stocks by not allowing the Reddit stockholders to sell. This helped the big hedge fund types while hurting the Reddit folks.
My thought are if you want to be successful with the stock market, don't be thinking "big plays day to day". The stock market is a long term play add a little consistently over a time as in each pay check. Most of what I have are in mutual funds. If you will do that with 10-15% of your income, you will wake up 20-25 years down the road and be pleasantly surprised by the nest egg you accumulated. Expect to average 8-10% you will double your money each eight or so years. It works, it will lead to a comfortable retirement but it doesn't not get you rich over night.
You can do it on your own or with a professional. Not sure how old you are but when I was about 25 or so we (wife and I) sat down with an advisor. I had and still have a goal of retiring at 50. We figured how much money we would need at 50, how much we would need to be investing to get to that goal. I am currently 44 and very much on track to retire at 50 if I so choose. Someone to help you paint a picture of what the future can look like and what you need to be doing to hit the goals can be very helpful.
I think if ya get back to the basics of understanding the time value of money, you can do ok in the long haul. The wife and I started investing back in 1982 when we were 22/21 and it pays to let your money work for you in logical investments. We're hitting 60 now and Lord willing will be financially good for the rest of our earthly years. I always told the young folks working under me to start investing in safe investments while they're young...do not wait. Have an allotment of a few bucks a paycheck automatically going to your secure investment(s).
An old rule of doubling your money is the Rule of 72 ie: 6% per yr. divide by 72 = 12 yrs.
Funny to see this post. Spent most of the day pondering this very point and discussing it with friends. Been riding this investment thing for roughly 30 yrs and need to hang on about 8 more. Over the yrs I have asked advisors multiple times when I saw something of concern on the horizon and they consistently respond “ ride it out.” Started to call this morning but I’m sure I will hear the same. My concern this time is not the normal concern. What I see happening with the new White House is like never before. Where the country is headed appear extreme. Not sure what worked in the past will hold true.? Nervous ??
Does anyone have advice on some investment firms to work with, or do you recommend folks to have them find someone locally?
Nick I would say the firm is less important than finding a person you click with. With that said I work with Edward Jones and have been happy.
If you're young, listen to Dale06. That is the right formula for success. Dollar cost averaging and the value of compounding interest.
Nick, it depends on your objectives. If you just want to stash away some money for the long haul, there are plenty of mutual funds or exchange traded funds (ETFs) that will provide diversification and long-term capital appreciation that you can invest in just by opening an online brokerage account (tdameritrade, schwab, etrade, fidelity, etc.).
If you want someone to provide a more complete financial picture that includes all your real and financial assets, I would try to find someone local that you trust who can best assess your own personal situation.
If you want to find the guy/gal that will uncover the next 1000% gainer in a few weeks time, good luck! And let me know when you find them.
Nick
We've done well using AXA - now Equitable for the last 15 years or so.
Pretty sure they'll have an office or two in AK.
Fidelity has always treated me well I do my own trading good luck Lewis
Another vote for Edward Jones firm, but mainly my guy there, Aaron. I’d have to say, if he moves, I move. We think alike and I trust him.
I dropped a very affordable sum in a "fun money" brokerage account last year, less than the cost of a new bow. The thought was to put some money to work I wouldn't miss and hopefully use those funds down the road for a hunt of some kind. My goals started out small, maybe a pronghorn or black bear hunt, then they went on to elk, and we are currently squarely on moose. A few more good months and the dreams might switch even bigger. Oh, and I already used some of the proceeds to pay for my trip to Kodiak this year and paid my capital gain taxes. The getting is good right now, especially in the biotech sector. My ROI over the past 12 months is firmly into the 4 digits.
For stock trades, we use Scott Trade. We started with Mutual Qualified in 1982 which has morphed into Franklin-Templeton. The govt TSP has a bunch of my money I'm too young to get.
Under Prez Trump.....if you had money on the table....you should have done good. You have to watch what is going to happen as we move forward.
Has anyone used the robinhood or similar to do there own trading? Which I believe all these reddit users got this whole thing going with gamestop
Nick, look up Nate (SDHunter) on the Bowsite. He will steer you straight. He gave me some great advice when I was switching advisors locally and gave me a list of questions to ask them. If I wasn't consolidating that account with some other holdings, I would definitely go with him.
Stay as far away from the strip mall franchise advisers like Edward Jones. I learned my lesson too late. Go with a fee-only advisor. The Ed Joneses put you into funds which pay the best commissions to them, regardless of whether they are good for YOU.
Nate is fee-only, and worth talking with.
I think it's absolutely hilarious. The arrogance of the wall-street dudes that are now down billions to some idiots on an internet forum is a thing . I didn't get in on it but I wish I would've thrown a few k at it just for fun. I do some speculative stuff in crypto- but all my big investments (non-real estate) are in boring old index funds.
But this GME stuff is phenomenal, I'm loving every second of it and am rooting for them to hold on tight and make it really hurt (short sellers were down 20 billion as of today). People are going to go to jail over this, Wall Street manipulates the markets all the time; but when internet trolls do it they shut the markets down "for consumer safety"....Give me a break, it's fraud.
+1 for Lou and fee-based, if you need to hire a financial planner; hire one that is fee-based on not commission. Commission based have zero fiduciary responsibility to you.
Nice work Dale.
Justin, that’s awesome. I’m primarily using a Roth I set up with TD and maxed a few year’s worth of contributions. So not exactly play money there. Had better than average luck with the ETF’s and a few stocks like I said. The sector specific stuff seems like a safe yet slightly more aggressive approach than whole market funds. While most haven’t seen giant run ups like some of the companies they are still beating the market big time and make the 6-8% theories look rather boring at this stage. Not that those are wrong by any means. Just a different world these last few months obviously! For play money I have another account and toying with some stuff very lightly. Maybe someday I’ll get to report back on buying a hunt with it too!
Boone, Robinhood took a ton of scrutiny yesterday for crashing during the height of this GameStop madness. They came back and would only allow users to sell, not buy. Effectively pushing the price down yesterday in a big way. Not the first time they’ve had major trouble on high volume days. I got booted off TD yesterday for a while during the craziness and was a little disappointed they came back with some parameters around some of the hot Reddit tickers as well. However I do like their app and ease of getting started/learning they provide.
I think stock trading is kind of like life and bowhunting in general. They all have a lot to do with " good choices and luck". Good advice above and would add that if you are so inclined the information is out there to educate yourself. After going through a couple of advisors years ago, I decided that I could do a better job myself for myself. Maybe a bit like going guided or diy, sometimes you may need help and sometimes things are done better on your own. Sounds like some on here have done well. Good for you guys for some nice work. KB, you actually seem well on your way to handling things yourself but I am not talking day trading which I would not recommend.
Some good advice, I would add, keep in mind, there is a BIG difference in investing for the long hail vs trading. Some " buy and hold " types have made lots of money, but most of them caught the '90's. those that held in other decades haven't done so well. Yet " buy and hold " is touted by most advisors, 2 reasons...no one knows what the future holds obviously, but in 30 years, there should be economic growth by virtue of population increase, and 2. It's pretty hard to go back 30-40 years later and beat the crap out of the guy that gave you advice, as he's probably dead, lol
It's a stock pickers market. Learn to read chart patterns, humans are complex, but not infinite in behavior....stock price is nothing more than human nature in graph form. Patterns repeat themselves time and time again. Trading CAN be done successfully, but it must be done from a certain perspective, not unlike bowhunting.
I didn't have any GME, but did get AMC last week, based on bottom formation I liked. Didn't know anything about the short squeeze in the making. I don't even know what Reddit is...got a good gap up on AMC the other day, made enough for a fully guided elk hunt, but that was more luck than skill. made 1k today in NVAX and VXRT, off normal patterns that I trade. More of an usual day.
Can't remember who did the videos, but 10-12 years ago, I learned how to trade the " OR- Opening range" very high percentage pattern, should be able to be found on youtube somewhere.
If you grab the game-changers early on, ie AMZN, TSLA, AAPL etc, you can outpace just about anyone, I personally have a hard time holding long term, 2000-2001 and 2008 are to real in my memory, lol. Like Kenny Rogers said, know when to hold them and when to fold them, that's the art of it. No different than playing cards, probability is the game pursued and Lady Luck can be a harsh or benevolent mistress....depends on the day...
PM me if you want more info, I can tell you what charting software I use, etc.
And yes, nice to talk about something positive for a change...thank you :) And I smile going to sleep at night knowing that some stuffed shirt hedge fund guy just got his a$$ handed to him, by a bunch of peasants...
My favorite market axiom. Bears make money, bulls make money, pigs get slaughtered.
I have the majority of our retirement funds set up with T-Rowe Price in several mutual funds, a high yield bond fund, and in cash reserves. I recently moved a large chunk into cash, so I would have dry powder for the next big correction, which I think is just around the corner. Then I will put it back into the markets and ride the recovery back up.
I also have a TD Ameritrade account that I call my "play money" account. I actively trade with that money. 2020 was like shooting fish in a barrel after the March crash. I've never made returns like I did then.
This recent Reddit thing is nothing new. Short squeezes have been a part of the game for decades. The funny thing is, these gamers actually think they are "sticking it to the hedge funds". Nothing could be further from the truth. Hedge funds are notorious for eating their own. If one is failing, there are many others that will gladly stick the last nail in the coffin. I guarantee you there are hedge funds that have made far more money on these short squeezes than the gamers have. And ultimately the hedge funds will win.
What the gamers don't seem to realize is hedge funds play both sides of every trade. For every short position, they are long in some other position. Usually their longs are slightly more than their shorts, since the markets generally always rise over time. So, if they get squeezed on a short, they sell a long position to cover it. That's partly why you saw the markets sell off yesterday. Huge funds were covering their short loses. Unfortunately, those selloffs affect everyone who is invested in the markets, which is virtually everyone with a retirement account. So, the gamers are really hurting the average working Joes out there who are trying to save for later years.
Matt
Krieger, I had positions in Moderna and Novavax last February. I made a killing but I should have held them much longer. I got into Vaxart a couple weeks ago at just over $6 and sold it at over $13 yesterday before it retreated. It will probably drop back below $10 before they release phase 1 results and I’ll buy back in, their tech could be a game changer if it proves out. Another NVAX in the making of things go well.
“What the gamers don't seem to realize is hedge funds play both sides of every trade.”
“The funny thing is, these gamers actually think they are "sticking it to the hedge funds”....I guarantee you there are hedge funds that have made far more money on these short squeezes than the gamers have. And ultimately the hedge funds will win.”
As to GG’s post, I read this article earlier today showing the big winners in the GME saga. Look at the chart at the bottom of the article. Other than two large individual shareholders (Cohen bought a 13% stake and is on the board of directors), look at the names of the big winners.
While it may give a brief feeling of victory in hearing about some hedge fund that lost a billion dollars +/- a few million, the reality is that hedge funds always have themselves covered for a move in either direction. That’s why they’re called hedge funds.
Per nowheels link, 73.4% of GameStop shares are owned by 7 huge investment funds or groups, and 2 uber wealthy individual investors. So, who is actually making the money on GameStop stock's meteoric rise in price? Here's a clue, it's not the gamer betting his lunch money from his parent's basement.
I appreciate that the gamers are dumping their last few pennies into the markets, and some are making money, instead of buying drugs, booze, or playing video games. But, if their plan is to invest in failing companies to screw the real investors who recognized that these companies were failing and shorted the stocks long ago, they are in for a rude awakening.
In free markets, a company's stock price is like water. It eventually settles at level and reflects the true value of the company looking forward. Gamestop is a $10-15 stock, at best. The gamers who are holding their $300 shares, hoping they will continue to rise, will eventually get what they deserve.
Matt
Grey Ghost, good analysis of the situation. The gamers don't seem to realize that in the end it is still about the "earnings".......Badbull
Exactly, Badbull.
That's what's sad about this whole GME situation. The volatility and uncertainty it has created caused the stocks of companies like Apple to fall over 3%, yesterday. Apple absolutely blew their last earnings report out of the water. Nearly everyone who has a retirement account is invested in Apple, and other extremely successful companies whose prices fell yesterday. All because an army of gamers decided to pump up the price of a few failing companies because of some misguided hatred for Wall Street.
Matt
That's the problem with these guys. It's like a video game to them. They don't care if it drags everyone down in the process.
I spend my money on booze, drugs, and hunting stuff I don't really need.
Lou, some life’s best investments!
If any of you ever start questioning the average intellect of our Bowsite community, just take a quick peek at the comments on the Reddit wallstreetbets board. It makes us seem like Einsteins in comparison. I just can't believe that such hatred, ignorance, and vitriol exists in our younger generations. It's sad, really.
Matt
Brotsky, I forgot how much I've invested in women, but that's pretty much a given..
Lou/Brotsky - funny. Matt - well said. Getting into/out of these stocks is like a game of airplane. The last one's in - get slaughtered. Too much like going to a casino and gambling. But is tough when most investors want to earn 8-10% a year (and a pretty decent one at that) and these people betting on gamestop, Blackberry, Tesla make 30 times in a year what mine does. Trees don't grow to the sky - or do they?
Mark,
The vast majority of the gamers will still be on that plane when it crashes. Then they'll blame the evil hedge funds and Wall Street for their own stupid behavior, as they stand in the welfare lines.
I've read that 97% of day traders go broke, and I believe it, after watching this fiasco.
Matt
Wouldn't now be the best time to short it?
Ryan - that's what started this. Almost all people buy a stock (long) - you can lose all your investment, but, not more. Shorting is betting it will go down, but, if people start buying thus driving the price up short investors can have infinite losses (much more than they invested) and may have to liquidate other holdings to "cover" or try to get out of the stock at what could be 100%, 200%, 300% losses. Most times they may use options instead or hedge (being on both sides of a trade), but, it can get very technical. It's above my capabilities and risk tolerance. Per what Matt said above "GME is a $10-$15 stock, at best" is so true. But, by the time that happens, a few may make 30X on their investment and many will lose that and more on theirs. Many losers for each winner
Vanguard.
Read John Bogle.
Take care. Mike
Wife and I have 50% of our investments with Fidelity through my work and 50% with Edward Jones. I disagree with Jaq’s comment about staying away from them but I might be biased due to the fact my EDJ guy is a college friend. That said about twice each year we sit down, review both of the EDJ and Fidelity investments and rebalance both accounts and over the past 25 years both accounts have grown nearly equally. I have no problem having someone else make money off of my money so long as I do well and achieve my goals. My career hasn’t allowed either the time nor mental energy to do my own research. The good news is I’m 55 and only 62 days away from having every day be Saturday. The fish and game throughout the west are in a lot of trouble!
I guess I’m missing something. If the 73.4% big boys are winners here how are the Reddit “lowlifes” not as well? Or vice versa. Aren't they all in the same boat? Cohen is a board member and ~13% shareholder. How does he sneak out smelling like a rose unnoticed? They all ride this down together for the most part no?
I think the fact we’re talking about this on a bowhunting forum probably says enough about what they were trying to accomplish. The sentiment was they were out to get the people who benefited in a big way from 2008. They probably did a little of that and feel like they outed a crooked trading platform or two in the process. Plus a bunch of kids paid off college, houses, cars and more apparently. I don’t think Apple is going under because of it.
"I guess I’m missing something. If the 73.4% big boys are winners here how are the Reddit “lowlifes” not as well? Or vice versa. Aren't they all in the same boat? Cohen is a board member and ~13% shareholder. How does he sneak out smelling like a rose unnoticed? They all ride this down together for the most part no?"
Not at all. Cohen's shares cost him around $9 a share. He can ride this thing down to a fair price, and still double his money if/when he steps off the board and cashes in. Or he may try to salvage the company. Either way, he'll do fine.
Who knows what the cost basis is of the 7 funds who still own the majority of the shares. But you can be sure they will hedge their positions all the way down. They too will do fine.
The few smarter gamers, who got in and out early, should pat themselves on the back. The vast majority of them will be left scratching Powerball tickets they bought with their welfare...umm....stimulus checks.
Matt
Tilzbow, I'm glad you are happy with your returns with your Ed Jones buddy. I was not (mine was a fishing buddy), and after some research into it I learned that the funds he had me in were high-commission for him, but historically underperforming the market. Then after he tried to recruit me to be an Ed Jones broker I dug deeper and learned more about their commission model.
When I moved my money to a fee-only broker I confronted him about it, and he just shrugged and said "yeah". He was a good guy too. Not saying they are crooked or anything, just operating from a different compensation model that may not be in the best interest of every investor.
I reviewed my mother in laws Edward Jones account with my Tax attorney . The EJ rep had everything invested in the highest commission vehicles for himself. We pulled the account and moved to a fee based advisor that doesn’t take commission on anything. The EJ advisor was beating on her door that day in tears. My attorney said he sees this on every single EJ account he audits for estate planning. EJ teaches this to its advisors. Her return % doubled the first year. Trust but verify.
I have a EJ friend I've been invested with since he first started his investment advisor career over 30 years ago. I don't have all my assets with him but I've been extremely happy with the results of that portion. Main thing is I trust him.
Nick, "Trust" is the key. I'm glad you trust your guy. Not all EJ salesmen are bad, and not all of their fund choices are bad. They just have a different motivation because they are compensated differently than fee-only advisors.
Quick, get rich schemes have put a lot of people in the poor house. Enjoy the ride !!
The Reddit crew is doing a fine job of running silver prices up now. Maybe now it will be where it should and not manipulated by the institutions anymore.
Some platforms still restricting GME and other buys.
Hard to know what to make of the silver deal. There was a push last week on Reddit to make it the “next GME”. Some are saying that came from some of the big losers in the GameStop saga because they stand to gain big with a silver runup and want to distract from attention on GME. I bought some SLV last week for the hell of it.
The silver run up was a fake out. The hedge fund owns 6 million shares so a run up would be a benefit for them. My guess is Wall Street is starting to use psyops on the redditors to their benefit or to devalue the information stream.
Trying to short squeeze a huge commodities market like silver is a bit different than squeezing a small cap company like GME. That said, I cashed in on 147% gains on the SLV calls I bought last Friday. Not bad for 1 day. The gamers are getting predictable.
Matt
I'm holding on to my physical silver to see where this goes. I read retail sites are already selling American Silver Eagles for $40 each...... :):)
The trick on the short squeeze is to actually hold physical.... When SLV and others have to purchase physical to fill demand the price will sky rocket. Not sure that will actually happen because too many folks will try to gamble with the paper contracts. Also, if physical silver cant be bought within 10% of spot.... who will buy it? Markups are already north of 20%.
If you could actually sell physical silver for $100-$200 per ounce I could probably take a couple years of vacation.
Sounds like long term.... it will be hard to keep prices high. See the end of the article regarding supply, and how much silver is produced every year.
I am always impressed by the diversity of the people on this site. To address the initial question on trading: I am an investor and not a trader. Being an investor is better for me. I have found that as an investor I make maybe 80% of my money on 20% of my stocks with AAPL being one of my winners, If I had traded AAPL and had bought it at say $400 before it split 7 to 1 and later 4 to 1 so it is now worth about $3,750/ original share, and had then sold it for a nice profit at say $500/share, would I have bought it back at a price above the $500 I sold it at? I would have made $100/share where as right now I am up about $3,350/share. I think that it is possible to make money in the market both trading and investing with investing being the better option for most people. The key is not to sell your winners w/o overwhelming reason. Of course with investing you do have to have a broad portfolio so that there are some winners in the mix. Of I knew which stocks would make up the winners that is all I would buy but I don't.
I think the GME situation is proving you don't become a day trader by downloading a free app and following the advice of anonymous trolls on a web forum. The stock is $81/share at this moment and crashing fast to a fair value. The wailing on Reddit is brutal.
I hope the gamers learned a lesson.
Matt
GG.....Maybe they should have used a guide, instead of DIY??
Some of the " gamers " sold at the right time and have made millions. The late-comers are the ones that will get hosed. As per usual....what goes up ( artificially and too quickly) must come down, I think the shorts will be in control of GME from here back down to 25$ area..
GG, good job on your day trade of SLV calls! I was fortunate enough to benefit from the gap up yesterday, didn't last long though...will look to reload at lower levels from here.
It promptly jumped to $152 after the drop. There’s a lot more going on here than some “gamers” playing with fun money. Most are holding no matter the results and seeing the ‘Melvin Down 53%’ headlines was enough to justify their participation.
Elon calling the Robinhood CEO ‘Vlad the Stock Impaler’ on a public Clubhouse call was another classic moment in this saga.
Mark Cuban answering questions on WSB this morning.
“ Final thought. First thanks for the great questions. Thanks for changing the game. Thanks for taking on Wall Street. Thanks for making kids around the country if not the world, including my son, want to learn about stocks and try trading them (Including my son and daughter). WSB changed the game far more than everyone on this board will ever get credit for.
That said, you will do all this again. You will go after WS and the next time you will be smarter. There was only one thing that messed you all up: RobinHood and the other zero commission brokers that everyone used didnt have enough capital to fund the fight. They let you down in a big way.
When you load back up, fight a broker with TRILLIONS OF DOLLARS in assets on their balance sheet. Someone that can be there when the fight starts and wont blink an eye.
No disruption is easy or happens in a straight line. Stay with it. I am a believer.”
So I pulled most of my play money before the market went down due to covid. Then 4-mos later I put it back in and my money has doubled. I just took out my earnings and kept in the original investment. We will see where this thing goes. (Not gme, just mutual funds). I am watching silver, might be a good opportunity to sell some.
Does anyone think there will be a reset? Anyone see HB 127? Hope nothing like that passes.
Stick Hunter - i just bought some SLV for short term trade. Markets may/will correct, but, betting they will be higher (10%?) by year end.
you think it goes up and is not like this GME thing reddit users are doing?
They can definitely affect on a short term basis. That's why i wouldn't say it won't go up down and have corrections as nothing goes up in straight line. The market will usually flush out these trades and rebound to it's equilibrium. Depends on whether you are looking to invest for longer term or trade the volatility. I'm not smart enough to trade the volatility successfully
I think it's GME over for the gamers. They are eating their own on the Reddit forum as the stock continues to plunge. It wouldn't surprise me if it hits single digits before it stabilizes around $12-15.
Matt
Can some of you guys educate me more on fee based advisors vs. commission based advisors? We are right in the middle of making some changes with our investments and some of the comments above have my attention. I would like to know specifically why it might not be the best option to hire someone that makes a commission based off of what they make for you vs a fee based advisor.
Fee-only advisors have a fiduciary duty to their clients over any duty to a broker, dealer, or other institution. In other words, upon pain of legal liability, they must always put the client's best interests first, and cannot sell their client an investment product that runs contrary to their needs, objectives, and risk tolerance.
Commission based can be fiduciaries but they don’t have to be.
A commission based advisor may be warranted depending on your objective. If you want a higher risk portfolio a money manager that is fee based could be used. Typically for high net worth individuals.
A fee based advisor normally charge a set fee per year for the services. usually in the range of 1 to 1 1/2% of holdings. So if you have a $100,000 portfolio they would charge you about $1.000 to $1,500 per year. A commission based advisor such as Edward Jones charges a commission on each transaction. If they buy or sell a 100 shares of stock for you there would be a commission on the transaction. The advise is provided a no charge to get the commissions on the transactions.
Now the gamers have shifted their focus from losers like Gamestop and AMC to pot stocks. A tiny Canadian pot company called Sundial Growers had the largest options volume of any stock, today. UFB!!
Please Lord, help these poor lost souls learn what real investing is about.
Matt
Jaquomo, thanks for the plug and vote of confidence.
I'm not touching this GME lunacy, or any of this Reddit/Barstool Sports stuff. There is a massive distinction between trading and investing. I do not deal at all in the former, as I don't enjoy the heartburn, but I truly enjoy helping others do the latter.
So for some of you guys that have several million invested a fee based guy can cost a chunk. Dang! I guess it’s not necessarily about what it cost, but rather what you can make.
GG. Someday many of us will learn what "real" GG Investing is I'm ready for that
I’m not a financial advisor, I eat crayons and lick Sharpies. But I have some hot picks for you, RK. :-).
Matt
I’m fairly young for retirement talk, (28) but I’ve worked for my family company since graduating high school in 2010. Since day one I joined the retirement plan (IRA) and have been putting 10% of my pay into it weekly and the company matches up to 5. So i put 15% away every week without even touching it pre tax. Like everything’s there’s ups downs and flat spots but so far it is doing very well! Even now with 3 kids I still manage to do the 15% every week which will make retirement for me and my wife that much easier and hopefully sooner!
MA, good for you starting early and paying yourself first. You will dollar cost average into a really nice portfolio over time.
For those of you (and me) who have physical silver, what/where/how is the best way to sell it to maximize return?
While unrelated to day trading, anyone else currently shifting more of their retirement funds towards Roth contributions vs traditional? The direction America is heading with spending vs taxes I don’t see my income tax ever being lower than it currently is.
I’ve maxed out three years worth of Roth contributions in less than 12 months Trevor. Considering I’m self employed and having the ability to pull out contributions without penalty the Roth program seemed to make far more sense for me. I probably improperly named this thread as this account is my primary focus at the moment and I’m definitely not day trading with it. Taking a little more risk than some maybe, but with the environment this last year I felt that was warranted. Though I do enjoy reading what guys are doing on a day to day basis as well. Don’t have the balls to dive in terribly deep on that side of things quite yet.
I am starting to see and hear people asking to be paid in silver or gold. Bartering, trading and selling goods.
Is gold and silver going higher?
Or will the 2 Trillion about to be printed and dumped into bailing out irresponsibly run states and cities going to boost the the economy and hurt silver and gold?
I’m reading that Silver is going to Peak at $30 soon.
I holding mine for now because like the Obama stimulus trillions. I think this will mainly go to cities and states as a slush fund for political friends and comrades.
No shovel ready jobs will be created, no solar panel jobs and the few small businesses left standing will be required to now pay $15 an hour.
So my hedge is inflation will skyrocket the next year or two and silver will go to $50 So it may peak at $30 this year. But I think it’s going higher in the next 4 yrs.
Thoughts from the experts.
Although everyone has to look at their personnel situation this is probably a great time to focus on Roth accounts. Taxes are low and are probably going to go up. Inflation caused by a $15/hour min. wage would push up stock values while reducing buying power. Allowing your investments to grow tax free for a few decades is probably the right thing for a lot of people.
We're doing Roth conversions because taxes will never be lower. Everyone, including Biden, knows that the promise to not raise taxes on anyone making less than $400K is a total lie.
What happens when congress determines they’re letting us keep too much of our own money in our Roth accounts upon withdrawal, and passes some new bogus legislation to be able to tax it somehow? Which I’d wager is a definite possibility down the road.
I share similar concerns as t-roy. In the back of my mind I’ve always thought the only thing worse than being taxed once is to be taxed twice. With the socialists crawling out of the woodwork and demonizing “success” I sure wouldn’t put it past them to tax Roth’s as well - perhaps a sliding tax scale based upon total value of the Roth. Because you know - if you’ve worked hard and saved all that money - you don’t really need it, some less fortunate free-loader does. Sounds fair right.
I bought silver years ago and for the amount of time you have to wait to make decent money makes silver a crappy investment but I refuse to sell it just in case it sky rockets. Only problem it is seriously manipulated and should be worth at least $50 now.
I sold a 12 piece silverware set today to a metals buyer for $950, and the original purchase receipt in the case (from 1954) was $168.
I always knew you were a shark in a swimming pool, Lou.
:-).
Almost as good as my Gretzky rookie card, Lou! 8)
Bought that silver the year I was born. I knew it would be worth something someday!
I'll be surprised if 2021 is not the year of commodities. Historically I am a very poor commodities trader. But I am transitioning some traditional equity exposure to commodities other than just petro.
Inflation is a foregone conclusion. just whether next year or 4 years out...but you can't increase money supply like the last 12 months and escape inflation. Don't want to be in cash. Maybe some slips between now and then but cash is not as appealing to me long term as strong company investments.
Candor - I'm so surprised that with low interest rates, all the money printing and the ever increasing national debt that commodities and inflation have not gone up more than they have, but, believe that it's a foregone conclusion, for sure.
Outside of "the markets" - I do think land is a good investment right now. Generally. Lots of overpriced land out there but still some reasonable values. I wouldn't dump my entire savings into land as a strategy, but whether you partner with a few other guys or do it on your own, land is a good way of positioning for inflation and you might could create income off of it and should be a good risk profile to balance equities or commodities.
Question for the pros. What does an advisor bring to the table that the targeted retirement funds (ex. VFIFX) do not? For a pretty reasonable fee it seems you get an actively managed package including a nice mix of US and Intl stocks/bonds with reasonable risk given the target date. Other than a personal relationship, that costs more I presume, is there an advantage to an advisor in a hands off invest and don’t look plan of attack?
I think that you are looking at different layers in the financial market. The advisor helps determine how much of your assets should be allocated to various areas. The advisor would help you determine what vehicles to use such as the mutual fund that you referenced. The mutual fund then actually manage the individual assets. If you know where you want to invest your money and are comfortable with your decisions you can skip the advisor. Also if you know what stocks and bonds you want to invest in you can skip the mutual funds and just buy the stocks and bonds yourself. An advisor should help you make the right decisions as to where to invest your money but not always.
The more layers of fees that you can avoid the higher your returns will be provided that you can make the correct decisions w/o help.
KB and others... The benefits of a good advisor goes far beyond investment performance! In fact, I’d argue that’s only a marginal benefit. A good advisor is going to lay out a formalized and specific financial plan for you. This will tell you exactly how much you need to save to meet your goals. Or it will tell you how much you can spend without the fear of running out of money. This plan will give you peace of mind, which is the greatest benefit I could ever provide! A good advisor will eliminate the guesswork. When the time comes and you enter into retirement, he or she is going to optimize your cash flow situation to make sure you are taking from the most tax favored acct and investment vehicle to meet your cash needs. A good advisor also helps to keep you from making mistakes, usually unknowingly. Both functional and emotional mistakes. Just today I stopped a client from making a sizable IRA withdrawal (fully taxable) when she had a pile of cash and other investments already in NQ accts that could have been sold to meet the need with no tax consequences, or at worst, just a LT cap gain! Saved her a good $50k in taxes. 5X her annual fee that she pays me! Yet she had emotionally compartmentalized her accts and erroneously thought it was better to draw from that IRA. I also had a convo yesterday with my own cousin who is a successful young professional starting out in life and recently had a baby. UTMA or 529 plan for Jr? Roth or Traditional 401k for her and her hubby. How about a Roth conversion? How much life insurance should we have? Term vs Whole life insurance? Should we pay off our mortgage faster, or invest? And how much cash do we need in our emergency fund? Those are just a few examples and they have nothing to do with investment performance. I do this stuff all the time, actually more often than I show someone a better investment (which certainly does happen too) strategy. Plus, there’s the added benefit of just being a good sounding board. Someone to keep you in check. To keep you from betting the farm on Bitcoin, or weed stocks, or Ark Innovation, et al, AFTER they’ve had a meteoric run up. Or selling when the market is down because it “feels” like you need to. Someone to help you see the value in solid dividend paying blue chips with good fundamentals that most investors are ignoring right now. A good advisor will earn his or her keep several times over, and truthfully, rarely does this additional value come from additional incremental investment performance alone.
I hope this helps...
Greatly. Thanks for taking the time.
Growing up, my father always told me to stay out of the stock market if I wanted to sleep well at night. I took it literally, and totally steered clear of trading.
Now, I'm currently 56, and I'm interested in getting involved with penny stocks. Since dad is no longer with us, I'm regretting that I didn't attempt to learn more about it from him when I had the chance.
Admittedly, I didn't read the entire thread, since all of this is basically gibberish to me! One of my hobby suppliers basically supplements his inventory by trading pennies. He isn't getting rich, but it takes the edge off when it comes to purchasing new products. He's a great guy, and has offered advice, but I'm not sure he can provide the 'layman's' terminology that I can easily understand.
Can you guys recommend a good starting point/training simulator for a newbie? I really just want to dabble in small stuff so I can gain an understanding of it all without losing my shorts.
Did I miss the train completely, or is it safe to proceed with caution?
70, buy low, sell high. Don't put in what you can't afford to lose. You will have good days and bad days. You will make good decisions and bad ones. If you have a hot streak bank some for when you're cold. An App like TD Ameritrade is a great way to get started. There's a lot of tools and available research included. The rest of the research you can do online. Any time is a great time to get started investing.
Penny stocks aren't for the faint of heart. They can - and do - fluctuate wildly. Investing in a company with a stock price of .20 a share seems appealing and safe. But that stock could drop to .10 overnight and you lost half your investment.
I used to day trade a veterinary supply company that fluctuated right around $1.00 a share. Every day was an adventure. One day I sold a big block, which triggered a selloff, and the stock price dropped over 20% by the end of day. Bought it back, and it dipped again before coming right back up.
70, I agree with Lou, fortunes can be made, but more likely lost with penny stocks. Remember, a 50% loss requires a 100% gain to get back to where you started. The former happens more frequently than the latter with penny stocks, in my experience.
Probably the safest way to invest in the stock market is thru an Index ETF. That way you get exposure to a basket of diversified securities all in one transaction. The SPY ETF tracks the S&P 500 index. for example.
If you buy individual stocks, right now I'd look for highly rated "value" companies that pay a dividend. With rising interest rates, the high flying "growth" stocks will suffer the most, like Apple, Amazon, Google, etc... For example, Warren Buffet just increased his positions in Verizon, T Mobile, and Chevron. All of which pay a healthy dividend.
That said, right now may not be the best time for a newbie to dabble in the stock market, IMO. Inflation and rising interest rates are going to put a lot of downward pressure on equities. Smart money will be flowing out of stocks and into safer investments like bonds and treasuries. The rising price of the 10-year T-note is evidence that a lot of investors have a bearish outlook on stocks in the immediate future, and they are willing to tie their money up in long-term instruments that have a guaranteed, but lower, payout.
Anyway, just a few of my thoughts, for what they are worth. I love talking investing and trading. It can be a fun and rewarding hobby, but there is a lot to learn to be successful at it. Good luck..
Matt
GG, I truly appreciate your intent and sincerity. I consider myself a jack of all, yet master of none, when it comes to navigating lifes 'everyday logistical challenges' such as finances, home improvements, repairs, etc. There isn't much that intimidates me.
With that being said, your post has literally sent me running and screaming like a little girl into the night. As a matter of fact, I'm reminded of the Lynard Skynard song, "Gimme 3 Steps"!
I bothers me that I have allowed myself to become so ignorant to such an important aspect of Life 101.
I started a thread about retirement and how much you needed to reitre comfortably 3-4 years ago and it was similar to this thread. In the end I transfered everything to accounts I opened with SDHNTR after talking to him and meeting in person as in this thread he came highly recommended. Could not be happier with his advise and how my accounts are doing
70lb, very few ordinary investors have acumen GG has earned through study and experience. That's why most people are way better off with a fee-only professional like Nate (SDHunter) who can tailor a balanced portfolio to your risk tolerance and goals.
BTW, I totally agree with GG's assessment for the near-term. That's why I'm sitting on a pile of cash waiting for a correction, which will undoubtedly happen given the high valuations and interest rate direction.
Bryon,
I apologize. I truly didn't mean to scare you off. Now that I re-read my post, it is filled with a lot of jargon that probably sounds like a foreign language to someone who isn't familiar. I watch a lot of business news, and I've been trading and investing for almost 20 years. I guess the lingo has kinda rubbed off on me.
If it's any consolation, my wife and many of my friend's eyes glaze over, too, when I start talking about this crap. It's not a topic that stimulates a lot of conversation at a dinner party. ;-)
Matt
Thanks Matt, I can appreciate that!
It's starting to sound like I should let sleeping dogs lie, so to speak. To this point in my life it hasn't been an issue for me! Lol!
Matt and Lou, thoughts on the $1400 checks and when/if we see an “unleashing” of everyone with regards to the virus? Are you guys not of the mind there’s still room for a decent runup this year before the correction?
Any experience with the high-dividend ETFs? SDY, VIG, VYM?
The $1400 stimcheck people aren't really the market movers. There could be a temporary runup because there's a lot or cash sitting on the sidelines, but like Matt said, the T-note yield rise is usually a harbinger of things to come. The Buffett indicator shows the market to be 75% overvalued, (not total valuationzdx but his team's metrics) and the yield curve between long term and short term government debt is upside down. Both of these indicators point toward a strong correction within 12-24 months. The yield curve indicator has never been wrong in the past 50 years.
That said, trying to time the market is nearly impossible. That's why dollar cost averaging into the market over time is a better way to go, using a pro to help guide the decisions.
I have several stocks I was wanting to get out of and put into ETF's. I bought several stocks last March that got hit hard by Covid. Like airlines, hotels, oil companies, and so on. They have rebounded nicely. I was hoping to get past my one year before getting out of them (it will cut my tax liability in half). I was thinking of getting out of those since I dont believe they are long term holds, and putting it into something that can just sit and grow nicely until I retire. Was thinking SPY,QQQ. You guys have me worried things are going to drop before I get out of them. What's your guys thoughts on my plan. I do have some individual stocks I will hold long term, like LOW,HD,COF,NEE
I should add. I bought into the stocks in last March cause of a post made by a Bowsiter. Thanks GG
I’ve been thinking we are due for a correction for a long time now, it still hasn’t come! I did pull out earnings of my play money and kept the original investment in. Just waiting for a drop to put it back in.
I thought the nasdaq had a pretty good correction this last week.... I pulled almost everything on Tuesday when I looked at my play money and said that’s way to high.... usually every time I get the feeling things are going way to well.... they are and there’s a “correction”.
Rusty,
IMO, the QQQ isn't going to serve you any better than the basket of stocks you already own. Look at who they are invested in. Their top 5 holdings are Apple, Microsoft, Amazon, Tesla, and Facebook. Those are all "growth" companies that will be hit hard by rising inflation and interest rates. Those are the type companies I'm rolling out of and into "value" companies that pay dividends.
Your tax concerns are legit, especially if you are in a high tax bracket. I'd try to hold those investments until they are a year old in order to take advantage of the lower capital gains tax. Then you can decide if you want to move the money elsewhere, after that.
Feel free to PM me, if you want to discuss further.
Matt
KB, sorry I missed your question earlier.
I'd echo what Lou said. The welfare...umm...I mean...stimmy checks may cause a short term bump in a few of the "meme" stocks that the Reddit crowd favor, but I don't think they will have a major impact on the markets, overall. Most indicators point to an overvalued stock market right now.
I think we will see a slow grind lower in stocks for the first few quarters of 2021. It seems most of the Covid "re-opening" trade has already been priced into the markets. The old saying "buy the rumor, sell the news" applies in this situation, IMO.
As for dividend ETFs, I like the idea, especially for someone who just wants exposure to stocks, but doesn't necessary have time or inclination to research and buy individual stocks. But, again, right now may not be the best entry point for any equity related investment. Like Lou, I'm sitting on a high percentage of cash, waiting for the inevitable correction. Then, I will jump back in for the recovery.
Matt
Lots of good insights here. KS Rancher, whether it be your holdings or the QQQ they may have a tough year. But, as our gdp goes back to 1.5% per year in ‘22 and beyond people will look to buy these growth companies and they should do very well
Thanks Rock! You’ve been a joy to have as a client.
lt will be interesting to see what happens with new home starts in the next couple months. Material prices are going up dramatically. Rates are going to start a gradual climb. I don't think we will see rates bump a lot. But when you look at what is happening with PVC, aluminum, wood, and copper, home construction (among other things) is getting very expensive. I was speaking with track home builder today and he said it will cost him $225,000 to build a home he starts this month, for the same home he would have sold for $200,000 in the fall. He told me that one of his competitors is shutting down new homes in two of their less profitable neighborhoods until material prices come down. Right now I don't have a feel for how much of the material price increase is still an impact from covid vs demand.
But the question becomes if there is a meaningful decline in new home starts, how will market confidence be impacted?
