How are you Stock Market Proponents now?
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Stock market has dropped most EVERY day for over a month now. How are yall that were such huge proponents when i mentioned this 5-6 weeks ago? Still making plenty of money? I lost a bunch before i sold my Mutual Funds to buy some land. Fortunately my land is still worth as much today as it was last month. My Mutual Fund would have dropped by 15-20k if i had waited to sell until today for example. Glad i got out in time.
Glad I went to cash with some big stuff a month ago, and now have a pile waiting to drop back in after this settles down.
I'm down about 10% from my highs on stocks, which I'm pleased with considering the broader markets have fallen a bit more than that. I made plenty of gains in 2020 and 2021 to offset this correction. And, like Lou, I'm sitting on a nice pile of cash to put back into stocks when things settle down a bit.
I survived the 2000 dot com crash, the 2008 financial crash, and the 2020 covid crash. This minor correction is just a blip on the radar, and should be another opportunity to buy some great stocks at a discount, soon.
Matt
I’m feeling fantastic. The DOW is down about 5.9% this past month. The DOW is up 11% the past year and over 70% the past five years. If you are concerned about one month, or a few months or even a year, you should probably invest in a bank savings account or CDs and loose money every day, to inflation. Seriously.
Meh...I'm in for the long haul. Dips and peaks don't bother or excite me, strategy may change as I get older, but I likely won't notice this in 30 years. Hindsight is always 20/20, I'm still real estate heavy but stock market has it's place in my portfolio. S and P 500 is still currently up 15% over the last calendar year.
I max rothIRA's January 2 every year, this year it wasn't so great, but the 28% I got last year I would say I did ok. I'm still buying stocks and real estate. Maybe you are lucky and you got out in time. Or maybe it shifts again and you miss out on another 20% year. Nobody has the answer that, and if they tell you they do they're lying.
You only lose it if you sell. Keeping a lot of cash with the current rate of inflation doesn't interest me much, but to each their own.
I was thinking of calling Pelosi, i'm sure she has some great stock tips to give out to the general public.
Just dollar cost average and keep at it every two weeks for 40 years and don’t look back. Buy land too!
401K
2021- Up 18.3% (and more than 1/3 of that gain was in January. Before the JB could impact much)
2022- down 11.94 for the year. But JB will turn it around on 1/31 ;)
2019 & 2020. Up 28% and 24% respectively.
At 56, don’t tell me the stock market isn’t the economy. (That is entitled loser talk)
I am regretting not parking a large chunk of money into a money market at the beginning of this month. Only regret it because the investments will be sold as we roll the money from a 403b into a 457, totally different plan with better investments and much lower fees. Could've sold high and bought back in lower. Otherwise I don't pay much attention.
I am 45 been consistently sticking money in the stock market for over 20 years. It is amazing what you can accumulate over that period of time. I most likely will retire in 4-5 years and never work another day in my life. The wife and I have never made what many would consider huge money, but both have done well over the years. Lived below our means and because of that and the stock market are in a nice position at this point in our lives. Not saying the stock market is the only way to make your money work for you. Guys do well in real estate and other areas. Also not saying buying a piece of land is a bad investment. It is hard to have a piece of land generate income for retirement or go up in value like same amount of money in the markets over the long term. Also you don't want to have to sell your land that you become very attached to and get enjoyment or of to fund your retirement.
My last two cents is diversify. Diversify what you have in the markets. Stocks, bonds whether mutual funds or individual stocks/bonds. Different sectors, small companies, large companies, US companies and over seas. Short term bonds/Long term bonds. No doubt sometimes the stock market is 2 steps forward and 1 step back. But if you really look it more like 3 or 4 steps forward and one step back historically speaking. If you have time on your side the markets are hard to beat for passive use of your money.
KHNC I think we can agree the investing in anything better than putting with that outfitter in ID that got you ;)
I’m down, but buying huge chunks in certain sectors. Patience. If you’re still fairly young, wait it out. A lot of bargains out there and the bounce back up will reward many. Not for the faint at heart.
Time in the market beats timing the market.
To correctly invest in equities for retirement, you should scarcely notice variations over 2 or 3 years, let alone a couple of weeks. I only need to know my 30-year rate of return.
"KHNC I think we can agree the investing in anything better than putting with that outfitter in ID that got you ;)"
Montana, LOL.
I still have safe investments in my actual 401K. Not everyone uses the stock market for long term. Some use it for a short time, and others have to get out at some point. Cant always just wait and wait and wait. I chose to use real estate in this case. Sounds like yall have a plan. Of course, dont ever take dale06 advice. That guy is always quick to piss on someone.
Along the lines of what JohnMC said, a wise man once said, "it's about time in the market, not timing the market." The average historical annual gain of the S&P 500 index is around 10%. At that rate, a $10K investment 30 years ago would be worth $174K today. If you worry about one month, or even a year, stocks probably aren't for you.
Matt
The drop in March 2020 was significantly more than this correction and I didn't sell then why would I sell now. What does worry me is that we have two incompetent people in the Whitehouse and a Treasury Secretary that is a political pawn. If they started listening to Lawrence Summers a prior Democrat Treasury Secretary we wouldn't be in half this mess. The reluctance to change course one tiny bit is what scares me the most.
^^^ this. I also own three properties in CO, and even in one of the hottest real estate markets in the country, my valuations haven't come close matching the stock market over the past 25 years, percentage wise, when you factor in property taxes, maintenance, etc..
Just to clarify, my retirement account is very diversified and more conservative. I really don’t touch that one at all and just let time take care of itself. I have a separate brokerage account 100% in the stock market and I’m very aggressive in it. This is what that looks like….lol
Since I am staring at an early retirement decision, yeah, January has me nervous, but I have until late 2023 until I touch any of that money. AT least that far out, so the logical part of me says, no worries, that's 2 years. The nervous part of me is watching close before I make a final decision
Rocky when you reach retirement or nearing retirement that is the time you have to change things up. Certainly should not have the same approach in or near retirement you did when you were 10 year plus from retirement. No doubt navigating through retirement investing has been tough with with the low interest rates we have seen for many years. Low interest rate are great for businesses, those they are buying homes, or anyone that needs to borrow money. It also been good for the markets as many have put money there since nothing else (bonds, CDs for example don't pay anything). It is tough for those trying to earn income off their money and almost forces you to take more risk than in the past during retirement.
These are reason I think it important to have a good competent financial advisor you trust if you are not savvy to what your options are and/or tend to make emotional decisions when things are bumpy. Especially as you near retirement. If for no other reason than to give you a idea of how much money you can spend and likely not run out of money before you die. If you have no clue to that question and there is really no precise answer. However you should be able to get within the ballpark you should quit spending until you do. You would hate to get to say 75 and realize your almost broke.
Speaking of stocks, that was a nice rally into close, today!!
The current wisdom is when retiring put most of your money in "safe investments" but if those safe investments have such poor returns then why not keep invested in stocks and have a year's worth of cash. Even if you have a few years worth of losses the overall gains of the balance of your funds in the stock market will probably surpass those losses unless we run into a five year bear market.
I would advise anyone to get in and stay in. Don't let the ups and downs worry you. The stock market IS the economy. It represents every sector of economic activity in our country and the world. Over the long run it ALWAYS goes up. Hang tough, compound interest is a beautiful thing.
Rocky not a smart guy but BC is correct. No don't get started by picking one stock and putting all your money there. It is certainly better to have a plan. With that said if you are a young guy or even a not so young guy pick a fund or two and start squirrelling away money, is far better than doing nothing because you don't know where or how to start. Investing is certainly intimating at first. Set a goal to save at least 15% of your income for retirement. If every 20 something out there would do that and just stick it in a index fund that follows the S&P and nothing else (am I not saying that is the best plan) they could not help but being wealthy by the time they reach retirement. That money is for retirement and nothing else. You are not going to touch it for vacations (even if that vacation is a hunt), emergencies, a home down payment or anything else. Before you do that make sure you got at least 6 months of money in cash in the bank that way when things come up and they always do you don't need to reach into retirement funds. If you are saving for a truck, vacation, down payment on a house have separate accounts for that. If those are short term goals keep it out the markets. Last thing look at a amortization calculator where you can see if you put in the same amount of money each year with a assumed rate of return where you will be in 10 years, 20 years, your target retirement date. Because when you can see long term effects of your savings it makes it a lot easier to squirrel that money away and shoot your current bow for another year instead of spending on this year new bow.
Bottom line doing something is better than nothing. Down the line you can get a little more sophisticated.
We “got in” the stock market and other investments about 35 years ago. Wife and I use an investment manager. It was the most important financial decision We’ve ever made. He found lots of investment opportunities that we would never have found. And he helped us adjust and re balance as needed. I have no idea what he makes off our account, but I know what we’ve made. And I’m ecstatic with the results.
Just remember you haven’t taken a lose until you sell! Investing should be a long term plan, not a short term gamble. If you want to gamble go to Vegas. Or take some amount of money you can afford to loose and invest it in aggressive ways. But the best way to build wealth comfortably is dollar cost averaging over time with making adjustments as fiscal climates change. With the current person guiding this country hand on!
Forgive the screen shot of my computer screen. But what this picture shows if you were 25 years old saved $620 for 40 year or until you are 65 you will have 2 million dollars at retirement. That is doable for many! If not $310 a month still a millionaire at retirement. That is assuming a 8% return.
The concept of relying on an investment manager kinda makes my skin crawl. No one will care more about your investments than you. I realize it takes some research and study, and some people don't have that time. But, financial literacy is as important as learning to read and write, IMO. It's not "rocket surgery" as my friend likes to say.
Rocky, as you know, investing is a balancing act between risks and the time frame you have before you rely on your investments. I maintained an aggressive investment strategy while my wife and I were still earning at our peak. Now that we've both retired, I've adopted a conservation over growth strategy. About 1/2 of our net worth is in debt-free real-estate. The rest is about an even split between stock, bonds, and money markets. The net annual gains of our investments more than pays for our cost of living, barring any unexpected financial disasters, like serious health issues or some natural disaster.
Matt
I partially disagree with Matt but for some it can work. What he said is kind of like saying nothing is more important than your health so I am not going to trust a doctor with it. This thread was started and not picking on KHNC by someone that was letting emotions choose what to do instead of logic. That is easy to happen even for a guy like me that likes to think he has no emotions.
I agree is not 'rocket surgery' when you are just socking away money. I think as you start getting closer to retirement and into retirement you better be very financial literate if you go it alone. If you use a advisor pick him or her wisely. Some are really good other not so much and some are just easier to relate to and understand.
Rocky, I never doubted you know how to properly invest for retirement. It's not the black magic some think it is.
Matt
I'm not looking at it. I look at my money once per year.
I did just sell a house and have a bunch of cash that I'm not sure what to do with now.
Ike….Maybe a Stone sheep hunt?? You’re not getting any younger!
I sold some stuff going to 35% in cash at the beginning of the year with the intent to sell more…but didn’t. Im overweight energy (ETFs) and high dividend stocks like TRTN and KMI.
I had some huge gain in a few ETFs that I have owned for years. I found myself evaluating whether it was worth it to sell it and pay 50% in taxes on the gains or just ride it out. A couple of those are down 20%… it remains to see whether I was right.
I think the 7% reported inflation is way under the actual. The current government policies will only exacerbate inflation.
I’m looking to buy the semi index SMH, MGM, CSR, and a few others but I’m waiting for a sign of capitulation.
I’m always looking for a trade and open to ideas, hint, hint. Grin
All I can say is this....If I had the IRA Opportunities in my 20's I would have easily retired before 50 instead of 58..... There is always money to be made in any market.... For those of you who get hung up on politics and listen to the BS from both sides, yeah, you lose its that simple..... At 72 I readjust,,, of course I have taken losses, only to have more opportunities in the future, like today......
The trick is no debt, except property, which I have just bought more,,,, As far as a vehicle, would not waste my money, but will buy land,,,,,,, 'some of you should wake up, because there is alot of opportunity out there,,,just open your eyes
JohnMC, it’s interesting you posted that screenshot showing what saving X amount can do.
After graduating college, 1991....I had an extra $10,000 or so. My local banker encouraged/begged me to open an IRA and just make the max contributions per year. She told me that...”I’d be swimming in money” at age 65. I’m now 53 and think about that missed boat all the time!!
At 22 years old, my mind was on other things. I couldn’t comprehend 45 years in the future.
To the risk adverse,one of life’s most expensive hobby’s is checking your portfolio Chasing returns is a losing proposition for most.I’m a mutual fund investor,buy and hold and realize markets go up and markets go down and avoid the noise.
For ME,that presently has been working for 30 years
Fees and trying to time the market are perhaps the two largest inhibitors to maximum returns. It’s hard to beat a low cost strategy made up of long term investing at regular time intervals in market index funds. I’ll take that every day of the century over someone charging me for their “expertise” in addition to using that “advice” to time when I do or don’t invest. The math proves it.
Agree with Genesis & Mqqse.
And I'm not that interested in gradually moving more and more capital into "safer" funds, as I approach retirement age. What for? It's not like I'm waiting for retirement day to then spend all that money in one chunk. The reason for saving is so that we can later withdraw a tiny percentage (say 2-4 %) annually to live on, if needed. The bulk stays invested, so why would I want to accept lower returns, ever? If it's only so that I won't have to worry & fret over every market swing, that's a fundamental mistake.
I'll retire (probably) in about a year and a half whether the market is up or down. Agree with Genesis and my investment risk doesn't change the closer I get. I have 2 investment advisors I trust.
Mqqse, glad that apparently worked out for you. Me hiring an investment manager in the early 90s made us money far beyond any thing we could have done alone. He is into this stuff 60 hours or more per week. We were in careers and had little time or expertise to find investment strategy’s. As I stated above, I really don’t know, or care what he makes off our account, as long as our investments do well. And they have done exceptionally well. It’s “net” thing for us.
Sticksender,
The reason to move money into less risky investments near retirement is to conserve the gains. A retiree typically doesn't have the time to recover from a major market crash. Remember, a 50% crash requires a 100% gain to get back to even. I know several retirees who were crushed by the 2008 financial market crash because they weren't hedged against it. All of them had to drastically scale back their lifestyles and costs of living. A few even had to go back to work.
Matt
According to our 1099s coming in & capitol gains we did pretty friggin good. Wife draws from hers & recovered all her distributions + gained. A few years ago I said to the wife, Market went over 17 so were makin good money. Ummm, Double + since then.. That being said our financial advisor is "excellent" & is in contact on a regular basis & we feel lucky in that way.
“Of course, dont ever take dale06 advice.”
In this case, he is spot on.
X2 on dale06!
Those of you who think you can time this beast are only kidding yourselves. You may get it right a time or two, maybe enough to build some dangerous and imaginary self confidence. Then with that false confidence you’ll make bigger bets, only to get it even more wrong eventually, hopefully without catastrophic consequences. Then ultimately, you claim that the “system” is broken because it didn’t go your way. I hope you traders aren’t doing this with money you’ll eventually need.
Those that maintain a long term view that ignores the noise are doing it right.
The "fear of loss" in retirement investing can be a self-fulfilling prophecy. Investing too conservatively over decades of time means you build less, which in turn reduces your ability to tolerate loss.
How are yall that were such huge proponents when i mentioned this 5-6 weeks ago?
The bulk of my money tied up in the market is in retirement accounts that I likely won’t touch for 15-20 years. So these corrections we’re seeing now mean essentially nothing - if anything, it gives me a bit more buying power at the moment.
Like we talked about, if you are in a position where you cannot tolerate a 5-10% correction (or more), then perhaps the stock market isn’t the place to keep your money.
MQQSE is spot on.But any kind of investing is better than nothing,even if you use the (guy).
+1 Dale and GG. No one foresaw the crashes in 87, 2000, or 2008. But someone invested in an aggressive portfolio and retiring in those years, drawing from their portfolios for living expenses, will not make that up for decades. Maybe ever. Their carefully calculated withdrawal plan could result in much lower standard of living in retirement.
I switched to a professional (from mostly DIY) a few years before retirement, when I had "enough" money. I'm not greedy, so we went more conservative and moved some more into a solid annuity I was building. Yes, I lost out on some gains, but no one can predict the future and I couldn't risk another 2008 with my short window. I'm not sorry. My advisor is a bowhunter I've known for a long time and I trust him.
Now retired for almost 8 years and remarried to someone with a good gubmint pension and her own fat investment account. We are living confortably on my annuity, dividends, SS, and her pension, and our investments are just play money. Our income is not affected by market swings. So we moved a bunch into more aggressive investments. But if I was drawing that formulaic 4-5% a year (pick your number), I would still be in a very conservative portfolio to minimize the risk.
For guys reading this that are new or just thinking about getting into investing. Some the debates above are not that important and just makes this topic seem harder than it needs to be. It is lot like which broadhead. You could say using an advisor is a mechanical broadhead and and not is a fixed head. They both work but you need to do one or the other. I can think back to when I was early 20's I had some cash sitting in checking account it seemed like a lot at the time. I happened to meet a Financial advisor he invested that money and more importantly got me investing some out of each paycheck. First max what your company will match in a 401k, what they match is free money. Then max what you can contribute to it (it is pre-tax). That is easy. Your company will have a list of funds to pick from if not sure as a trusted co worker. Get started as your nest egg grows you can get a little sophisticated in what funds and types of accounts. The most important part is you are putting away money for retirement. Remember 10k when your 25 is the same investing about 40k when you are 45 or 160k when you are 65. Started today don't wait. It was one the best decisions I ever made.
"Risk Adverse" to me only applies to not being emotional at one's present asset allocation.I fully expect I will move my allocation from less stocks to more bonds as my time from retirement decreases. Some individuals can stomach the ebbs and flow of market volatility others can't.Some investors need an advisor and others do not to meet objectives. Inflation is presently a small rock in my boot though.
Best investments I’ve made to date were in real estate but not because I had a pile of cash to squirrel away somewhere. Paying cash for real estate vs buying into market is a tough call. If you don’t have much to begin with, my comparisons seem to show rental properties blowing stocks out of the water. Throwing 20% down on a rental and allowing it to pay itself off in 15 years from there coupled with the equity gains along the way nets more than a mutual fund with the same timeline.
But I am young and finally had some good advice stick. Never think you know it all and have an egg in as many baskets as possible. I use play money in day trading to learn more about the market. I aim to pick up a new rental property every 1-2 years, and utilize a money manager for my other market investments, they know more than me and I’m okay with admitting that!
You can go on many investment sites and take a short 'test' to determine how much risk you are 'comfortable' with. They'll usually cook up a mix of funds that matches your 'profile.'
Or just invest in a 'target date' fund, which automatically tapers your investment risk downward as you approach retirement age. I did that several years before retirement with my IRA. My 401-k from my last job is still a moderately aggressive mix. Neither is immune to nor overly sensitive to market fluctuations in the longer run. (They did drop some this month, but I'm still well ahead of where I thought I'd be several years ago.)
I do some market timing in the context of managing risk.
If you don’t think we are going into volatile times with this president you have your head in the sand. A week president creates big problems. Trump was a bully and an ass, but he was our bully. ( Some abhor politics- sorry but politics matter)
There are many negatives out there inc the Fed raising rates which is historically bad, Massive inflation, Russia and the big dice roll: China/Taiwan. What if Biden keels and Kamala takes over? I’m OK with keeping a little over a third of my stock mkt money in cash.
Whether the market goes up or down in that time- I can’t read the future but it doesn’t look good. I’m content with keeping a percentage of my money in cash to manage the risk.
An investor always has to consider the tax consequences not only on sells but also buy strategies. I treat trades differently than I treat long-term investments using trades to offset gains and losses in my taxable accounts- multiple accts to get around the 30 day rule… and trading in my Non tax IRA.
I am a big proponent of the reversion to the mean theory and it has made me a lot of money over the years. Charts are very important and tell you a lot. Take a look at the chart of Nvidia or Moderna and that’s all you need to know. I do not buy stocks on a steep ramp ups, and will capture profit a steep run up, they always come back to earth. I always try to buy down around the 50 day or the 200 day MA mostly dollar cost averaging in. I don’t try to capture every dollar on trades and I try to stop out losses though that doesnt always work.
I stay away from companies that have zero earnings. Yes I have missed out on some big gainers but it’s part of my managing the risk strategy, I’ve also saved myself from some big duds. For every Tesla there is a Lordstown..
I look at forward trends….industries (ETFs) that I think will do well. I dont care much about past performance. A guy buying the Software index 30%+ off its highs will probably see a little more pain in the short term but in a few years he will way outperform the market. I question; What will do well in the next 5 years…. And is it a relative value is the way I approach it.
I sometimes capture gains and offset risk with covered options.
High flyers like Tesla will need 100 years to catch up to its stock valuation. Too much risk there for me.
The key to being a good investor is to have a strategy and to stick to it, take the emotion out of investing. I think a young guy would do well to study those topics above and develop his own strategy.
.
Investing in real estate can be as foolish as investing in stocks.
Chose poorly with either one, and your money will get better use buying slurpee's and hot dogs at the local 7-Eleven
I’ve done very well and I consider myself very lucky. I do all my own and have been way ahead of the market averages for a lot of years. I also have done well in my real estate holdings I have never lost a dime on any property that I have sold. I was lucky when I picked up a lot of Apple stock and it has done very well. I regret selling my Home Depot and Crocs while they made a nice profit they’re a couple hundred percent up from I sold them for. I always chuckle at my saying pigs get fat and hogs get slaughtered if that makes sense.Good luck Lewis
One very important thing to keep an eye on with any investment is what kind of fees you are paying. Too high fees will cost you tens of thousands of dollars over time. Insurance companies, that often sell annuities, are notorious for baking in fees that you aren’t even aware of if you aren’t paying attention.
Lewis,
Almost 20 years ago I got interested in trading stocks. Back then, brokers required you to fill out a lengthy application, including bank and tax statements. They all had a minimum deposit requirement, and they charged fees for every trade. IIRC, it took 3-4 weeks for my account to be approved. I started with an amount that wouldn't kill me, if I lost it all.
I began enthusiastically making numerous trades per day, while chasing a few percentage points with each trade. I soon learned I was spending more on trading fees than I was making in returns. The one stock that I let ride during that period was Apple. Holy cash cow!! It taught me the value of buying quality stocks and holding onto them. So, I added Amazon and Intuitive Surgical to my Apple shares, and let those 3 positions ride ever since. That small account has paid for 2 new trucks, a boat, and numerous vacations, and is still worth over 3 times what I invested. I often dream about what our retirement accounts would look like if I'd invested everything in just those 3 companies. 20/20 hindsight, of course.
Matt
G G you are correct picking quality stocks is really hard to argue against I every now and then gamble on an iffy stock some have done well others not so good. I also like to carry some high paying dividend paying stocks I have a couple that have averaged around 12-14% over the years. I got hurt a little on those when the pandemic hit but they still paid their dividends so I can’t complain.Good luck Lewis
If you ever wanted to own a titty bar you can buy RICK. I just looked it up I owned a little of it several years ago made a little not a lot but just looked damn thing quadrupled during COVID. No one told me lap dances prevented the China Virus.
This is one of the better threads in awhile. Lots of sound advice here. Pros are much better than me and are a great option so is diy - kind of like hunting. . Been doing my own for a long time so do my own thing. Can go stocks, funds, index, managed. The best time is when you have the sooner the better. Lots of advantages Esp in 401k where there is a match as John said. Plus Retirement accounts enjoy tax benefits ( now or later). Warren Buffet and Charlie are still killing it because they apply so much common sense and invest in what they know/ understand Love what slot of you guys are doing. Ps - I saw a derogatory post directed at Dale - he has NEVER had a bad post - imo
Buy the S&P 500 index and add regularly. Never look back.
Steve b is on point but I also do VT and VIG to reduce my exposure to overvalued tech.
Am I down this month, yes. Am I up a LOT in the last 6 YES.
I'm beating the FJB inflation so I'm good.
Be sure you understand the mechanics of a cap weighted index if you are going to blindly throw money at such funds. I’m not anti index fund at all, I use them too (in etf form), but in a unique way. Cap weighted indices have created concentrations and additional risk that most individual investors do not realize. Do some research and make sure you understand this subject and are aware of the increased risk. The consequences otherwise might be surprising.
Sticksender
The reason to move to conservative investments near retirement is a simple reason.
Once you won the game you quit playing.
If you won the lottery, you wouldn’t really be out there spending all the money on lottery tickets and gambling more at the casino to win again. A smart person would realize he just got lucky, now it’s about preservation.
You can draw parallels between investing and archery - some guys like to 'keep it simple' - buy a bow and arrows, have the local pro shop keep them tuned and shooting. Others like to tinker with bows, build arrows, do as much of their own hands-on as possible.
Investing can be as simple or complex as your interest dictates. Pick your own investments or go with a broker who understands your needs.
Personally I'd rather spend time shooting than watching the market. ymmv
I have been in over 40 years, it has gone very, very well.
sasquatch, my question "what for?" was actually just rhetorical. I do indeed already know the reason guys think they need to exit higher-yielding funds as they approach retirement. They believe this "preserves their wins". My approach is the opposite, because for my own purposes, with regard to that segment of my savings, that concept is faulty for my way of thinking, and guarantees long-term loss. It doesn't make sense for me, so I'll stay invested in stuff that has proven over the long haul to yield the best. In retirement, I want my yield to draw-off ratio to be as high as possible. That means I won't back off high-risk, high-yield funds, nor try to out-guess market timing. Like most people, I won't be taking it with me. Might as well leave the heirs in the best shape possible. YMMV, so do what's best for your own peace of mind.
Lots of investment advice here is spot on. The interesting thing is that everyone mentions "if only they had started when they were 25." I think that is because when you are 40 or 50 years old it is quite conceivable to save $500/month. When you are 25, not so much. Not when you are in the investment phase of your life as far as a career goes. Money is tight, you're building a family, and oh let's not forget all the other Bowsite advice saying "DO IT WHEN YOU'RE YOUNG!" ;)
I think another major aspect that comes into play for the entrepreneurial types is forgetting about the stock market, forgetting about real estate, and betting on yourself. It's a different world, and it's not for everyone. But if you can become a business owner, or shareholder and influence the growth of said business your returns can far exceed even a good stock market portfolio. In the risk/reward relationship this is by far the riskiest, with the highest potential level of return. You don't necessarily need to be a business start-up type person either. If you are an incredibly valued employee, and you know your worth it is not out of line to talk to your employer and ask about share options. If you believe in your place of business, and like where it is going, maybe you can forego some salary or bonuses in place of some shares. It can be a win-win as the employer more than likely locks down commitment of a key employee. If nothing else, it's another form of diversification. When it comes to investing in real estate, it's fun to buy hunting land, but if you're actually using it for investing purposes it had better be income generating real estate ie: housing or commercial etc.
Lots of interesting advice above. I turn 71 this week. Started an investment account in my mid 30s. Didn’t have a lot to save but did so monthly and all of the bonuses I made over the years we’re invested. I’ll say it one more time, start as early as possible, $200 a month when you are 30 is way better than $500 a month when you are 50. Time and compounded earnings are huge. I retired at 61 and have not adjusted to a very conservative portfolio. Most of us need to plan to live 20 plus years after retiring, so retiring and immediately going conservative could leave you financially strapped near the end of your life.
I retired last year at 51 and my investment manager suggested that, with the combination of poor bond yields/inflation, tax consequences, and my relatively early retirement, it would be a mistake to pursue the traditional wisdom of shifting from equities into a more bond-heavy portfolio mix.
Dale06 I started at 26 not because I thought about it but because my company gave me 6% match.Sounded like a good deal to me.When I was around mid 30's I started investing in Vanguard.I ended up retired at 51,still can't beleave how it worked out.I am 67 now and glad I did what i did.
" A smart person would realize he just got lucky, now it’s about preservation."
Dang, I must be dumb as hell... :^)
Right wrong or indifferent, my plan is to leave the bulk of retirements funds invested in stocks after retirement. Opened two Roth IRAs a few years ago and have been maxing those out ever since. Will likely go somewhat conservative on those smaller accounts at retirement. Plan to use them as income on years the stock market is down...with smaller withdrawals needed due to zero tax liability.
Based on account history, no reason to believe this is a bad decision. I can only review history online back to 2006, but during that 16 year span, accounts have only been in the red four times (12X in the black)...never red two years back to back (red once every 3-4 years)...and the worst crash in late 2008 was back in the black by mid-2010. Average gain during that 16 year span is over 12% annually. Think I'll take my chances....
I am nearing retirement. Plan on going in October of 2023. I am not really getting that much less risky. I will have a pension when I retire, and will draw SS a little over a year after I retire. This will replace the majority of my current income. I also have a 457, about 1/3 of it is in cash which is the bucket I will draw from if I need it. The remaining 2/3 is in stock mutual funds that I plan on leaving there and possibly even moving some of my cash back in there. Also my wife will continue to work for 3-5 more years. She will also have a pension to draw from, a 403b and SS. We should be good and able to still carry some risk for growth.
If I were to go back in time and start over, I would not diversify. I'd start young in S&P Index funds and aggressive growth funds, small through blue chips, and keep dollar cost averaging into them. I wouldn't have bonds at all until quite a bit later. Not even sure I'd look at International. When I researched Int'l stock funds, they rarely beat U.S. Equity funds.
Hopefully the ones who don’t believe in preserving the wealth have about 2x what they will really need.
In that sense, go for it, it would make decent sense to stay risky.
For the ones who retire with about what it will take, a 2008 crash can cripple their retirement.
It may have recovered in a few years, but for one that’s not guaranteed as anyone would agree, also it’s harder to recover when you lose 40% PLUS are withdrawing every year.
Recovering is a lot easier when you don’t have to also withdraw the money to live on at the same times it’s down.
I think that sasquatch makes a number of good points in his last comment. If we are not in a good position to ride out a year or so of a falling market, there is more risk in being heavy in equalities. However, during a time of high inflation and low interest rates cash and bonds are going to result in loosing buying power and quality of life. IMO equalities have the lowest risk over a 3+ year time frame because history has proven that they provide the best return and stay ahead of inflation. I also think that no one can time the market and that it is best to invest in long term stocks and always be in the market. If an individual is under too much stress with the short-term variability of stocks it may sense for them to be in something more stable over the short term. I have a friend whose wife wants to be involved in managing their investments, but it is agonizing for her to pick stocks and she cannot sleep at night for worrying about them. For his wife's health, he has to look for an investing strategy that appears to be safer than buying and managing individual stocks. That is the best solution for them even though it may not be the best financially. IMO some of the comments above are about what is best for the commenter rather than what is best financially which is fine as long as everyone recognizes the distinction.
Goyt, suggest your friend do what I did years ago. My late wife had a math brain. Our investments were with an advisor, but I gave her a few thousand in "play money" and told her to go for it. She subscribed to Motley Fool and a couple other DIY services, started picking some stocks, and consistently beat the market, while learning it. She would take the principal out after big gains and reinvest that elsewhere.
After awhile her portfolio got big enough that she was a little spooked, so we put most of it into our advisor account, and she kept on, except on a smaller scale. Then after she got sick, we rolled the rest over and took the burden off. But it was a great learning experience for her, and since she no longer worked outside the house, it gave her a productive feeling of contributing to our finances.
Jaquoma, I am happy that it worked out for you and your wife. It is a great idea. However, there is no way that I am going to give my friend martial advise.
I agree with the guys above.
Some of the conventional portfolio advice of more bonds as you get older fails miserably in the interest rate environment we are going into now.
This is where I recommend looking forward. Using Past returns can fail you miserably and heres why; We are coming from an extended period of artificially low interest rates. We have had the Lowest home mortgage rates in my lifetime (6 decades) These can be manipulated for awhile…but not forever.
It doesn’t take much investment knowledge to see this upcoming trend.
The challenge with predicting what stock investments will work in the future is 2 fold. 1) what industries will work 2) what is their relative value
Tesla will sell more cars for sure…but at their $935B valuation, and only a tiny % of profit, the PE of 190 tells you it will be 190 year payback at the current earnings. Sure they are plowing $$ back into the co and no doubt their eps will rise….the Q is will it rise exponentially in the future now that they have a lot of competition? Typically when companies my first market they rock it up but as competitors come in their margins go down.
Do you think the need for semiconductors will rise in the coming years? Its an absolute certainty. Dollar cost avg into SMH will be a double in the next 5 yrs, the one negative would be if China takes over Taiwan and TSM.
One other thing to consider is that, during the wealth-building phase, it is typical to reinvest dividends/distributions. When one retires, it may be better to have those remain in cash. Simple stuff, but better to only pay taxes on the dividends/distributions than that plus cap gains on sales of stock if they get reinvested.
I was pleasantly surprised when I thought I was going to have to sell securities on 1/2/22 to fund our 1H22 household expenses to learn that Plus a bit more already sitting in my investment account.
So is this a dead cat bounce?
Matt, I agree with you on the dividends. They are taxable in the year received regardless if they are reinvested. By getting cash, the option to buy any stock or use them for expenses is there. With free trades the attractiveness of reinvesting dividends is not as great. Once the dividends are reinvested it is not possible to sell stock to get their value out of the market w/o incurring capital gains in most cases. I look at dividends almost like social security as a guaranteed cash flow. Some stocks may drop dividends while others increase dividends is the short term and in the long run they go up.
My Crypto currency has tanked. I may jump off a virtual building :>))))
As always the level of experience and expertise among the regular Bowsiters on various subjects is outstanding including this one. Hopefully the young here will take the time to digest what is being said here and make some good financial decisions. I think that this thread could be a good basis for a high school or college course.
Personally I hope all crypto currency goes to zero. A false market. And a drug dealers dream.
sticksender, FYI, while I understood what you meant, you are using the term "yield" in the place of total return. By definition, there is a difference. Yield is exclusively income generated by interest and dividends. Total return, on the other hand, includes yield, but also adds or subtracts the appreciation/depreciation of the investment's value. In today's environment, if you were to depend solely on yield, you might be in trouble!
Those of you guessing your proper asset allocation based on age, or winging it based on what feels right, or historical returns, or current market conditions, anything else, you need not do so. As is the case with most things related to investing, with a good financial plan, you eliminate the guesswork. A plan will detail and quantify exactly how much you should have in specific asset classes to meet your unique goals. Let the math decide. Not emotions.
I am feeling pretty good. I'm 55, retired for almost a year and have approximately 40% of my non-real estate investments in Bond and Income. I have never believed in timing the market. Put it in and keep it in. I believe it is well proven that you will not win the timing game vs consistent investing of surplus funds. I shifted from 70/30 to 60/40 a year ago. Additionally, 1/3 of my non "liquid" /non 401K/IRA investments are also in commercial real estate holdings. My goal with equities and bonds was to yield at least 4% per year once we retired (ya, the 4% rule) and we have been fortunate to soar past that during the last twelve months. I fully expect a 30% correction when it all hits the fan. Will be a good time to pour some more cash into the market, or even better maybe pick off some real estate at a reasonable price.
4% per year (without liquidating assets) used to be a no brainer for our parents and grandparents. But these days with near zero interest rates, it is a challenge. It requires everyone to take more risk, relying on greater concentrations in stocks. You have to supplement your bond and income producing assets with appreciation in the stock market. Not the ideal situation, but necessary today. Fortunately, everyone is chasing the stock market, placing excess cash in there. This is helping to really drive the market. Will it have a hard correction? You bet, but I can guarantee you before long everybody will be all in again. Add to that the government will eventually have turn on the quantitative easing again. That is just more capital that will get dumped into the markets, driven prices up further.
Don't forget, it ain't a gain or a loss unless you sell it. Unrealized does not count! Best advice I can give is don't look :)
peterk, don’t look is great advice! I only look when the market hits a new high. This past year was unbelievable given the political mess we’ve been in.
Since you brought up the “4% rule”, I wonder what some of you more experienced guys think about that. That has been my plan when I retire in 8 years at 55 (my plan anyway). I’ve been reading some stuff that says to maybe dial that back to 3.5 or even 3%. Also, anyone have any knowledge on the “rule of 55” for accessing your 401k at 55?
Deerhunter72, The 4% is just a rough rule of thumb, very rough. It may work for some and not at all for others. As I have previously said many times, why rely on any rule of thumb? You are a unique individual, with assets and goals and preferences that are specifically your own. You don’t need this or any other financial rule of thumb. Instead, devise a quality financial plan and it will tell you precisely what your withdrawal amount should be. With statistical analysis, this number can be nailed down to the dollar, with 90%+ accuracy. Again, there is no need to guess at this. There are basic plans available online. And of course comprehensive plans can be produced by a fee only professional who is held to a fiduciary standard. Get the answers you deserve. Best of luck to you.
Deerhunter72, my income/ bond investments returned 2.8% last year. Blend that with modest growth in the equity portfolio, and your there. Some years you won't hit it, other years you will blow it out of the water, like last year. With interest rates increasing, the bond side of the market should see better yields this year.
Higher yields, potentially, but also greater likelihood of principal loss. There is an inverse relationship between interest rates and the prices of bonds. That’s not conjecture, it’s mathematics. Use caution.
SDHNTR, thanks for the response, I value your opinion as a professional. We do work with a fee only advisor and we have a plan. He would like me to work longer, only to accumulate more money, but agrees that we can both retire at 55 with a safe draw down that won’t leave us penniless. I asked about the 4% rule because it’s a big topic with the FIRE community. I sometimes listen to some their blogs and find it interesting.
Peterk, thanks for responding. Sounds like your plan is working well for you.
Aubs8's Link
I was fortunate someone pointed me in the direction of Vanguard in my late 20s and read Jack Bogle's Common Sense on Mutual Funds around the same time.
I also found the Trinity Study around that same time from where the 4% Rule originated which has impacted my decision making.
Attached is an article on the study somey may find helpful.
Take care. Mike
Aubs8's Link
I am up about 6% this year. I have 25% shorting the market, 25% in stocks with dividends of at least 7.5%, 25% in oil (XOM etc) and 25% in cash waiting for the crash I think is coming in a year at the most. I actually sold 5 rentals last year to free up cash to invest into the market when it crashes.
I predict real estate will be down about 20% by the end of next year and I plan to buy some more rentals.
Vanguard has a very good page on there web sight called how long will your money last.Its like a video game.
something to consider is the rate of inflation. I see that it was 7.1% for 2021, so, I believe I have to outgain the inflation rate every year, or, I've lost money. For 2022 if we have high inflation and low returns it may be a negative year? Time will tell.
Everyone is stuck on inflation this year, which I understand. I am too
However we basically had 0 inflation for a long time previously. Overall we are way ahead as most were still getting raises all those years on top of investment growth.
Jaq brought it up…and I would agree that investing is not rocket science.
With a few rules anyone can do as well if not better than the investment advisors that charge you a % of your portfolio then plug it into index funds or even worse, high commission annuities.
Aubs, thanks for the link to the Trinity Study. I've heard a lot about it but have never really read much on it. Our plan is not set up on a hard and fast 4% draw, actually a little less I think but I'd have to look at it again.
Beendare, annuities have their place I guess, but you're correct about the high commissions. Those fees can suck the life out of the rate of return and a fast talking salesman can make them sound so good. We are in the process of getting my wife out of one and they don't make it easy.
Beendare, if you hire an investment adviser or manager, and allow him/her to put you in annuities, thats on you. I’ve had an investment manager for over 30 years. I or my wife approve all transactions before they get executed. He calls us with options and recommendations and we decide whether to proceed or not. He has never suggested an annuity. I’ve said before, I do not know what he charges us. We are concerned with the “net” and it has been very good. He has access to and the time to examine many investment options that we would not see without him.
Dale, any broker calling you with "Ideas" is raking a commission, fine if he has beaten the market....VERY few do.
Not all Annuities are bad...you can buy them direct from Vanguard....just saying, beware these can be a very high commission check to your advisor as evidenced by the long lock in period. [the advisors here will back me on this if they are honest]
Many of the financial planners are essentially salespeople. NOT all.... and its worth looking for one thats not. Many just plug your money into pre determined portfolio allocations by your age group following typical portfolio designs which you can get these yourself on every online investment company if thats the route you want to take.. I have a couple buddies that have done very well doing just that.
I'm not disparaging brokers....just pointing out this is not rocket science.You can do this. A no brainer strategy if thats what you want is Dollar cost averaging into diversified funds. The stats show that this has beaten a huge % of Hedge fund and other investment advisors over the years....without the fees. Spend a little more time understanding trends and reversion to the mean........and you can do extremely well.
When you think about it, annuities are a "heads I win, tails you lose" situation for the insurance companies who offer them. They are a perfect hedge to their life insurance policies. There's a reason insurance companies are among the most profitable companies on the planet. The odds are always stacked in their favor, just like a casino.
Matt
GG, I agree 100%. I won't go so far as to say they are crooks, a business seeks to make money, but your comparison to casinos is spot on. My wife is a teacher and until recently her only option from her employer was a 403b sponsored by AXA(now Equitable). It has been better than nothing but the slimy rep lied to us repeatedly about the fee structure a few years ago. It was a waste of time, but I did file a complaint against him with FINRA.
As Suzy Orman says, "Investments and investments, and insurance is insurance, don't mix the two."
Annuities make sense for a very small percentage of investors. Yes, in my opinion, they are largely oversold. Usually on a commission basis, but there are also some fee-based iterations available now too. They are emotional investments. Some people don't care about the cost (assuming they are properly informed), they want guaranteed income and they can't stand the thought of their potential for retirement income being linked to the volatility of the stock market. I won't universally bad mouth them, but like anything else, you should know what you are buying and why you are buying it.
I wonder how many billions of investor's money wind up in the insurance company's coffers, when the investor dies before the term of the annuity contract is up. I think you'd have to live to around 135 years old to ever see your entire principal amount with most 'lifetime' annuities.
Matt
GG, that's only if you annuitize, which rarely happens with variable annuities nowadays. With more modern annuities and living benefits, you can realize income without having to annuitize and don't lose control over your principal. I'm not advocating them, I'm just stating that what you mentioned is really a thing of the past with most annuities used today.
I am one of those who did invest some money in an annuity. I knew exactly what I was getting into, did the research, and found a really good one (lifetime balance grew at 6% a year, more if the market was way up). 2008 scared the hell out of me with a relatively short timeline to retirement. I wanted a guarantee of some lifetime income to supplement SS if the market did a few more 2008 collapses, especially early in my retirement. So I rolled over what was a pension lump sum from a former company into this annuity with a much better return, added some to it, and I could draw from it anytime instead of waiting until age 70 (per the pension stipulation)
Hindsight is 20/20. That money would have appreciated more in the market over that period, but like I said, 2008 spooked me. Nobody knew what would happen, nobody knew Trump would enact the policies he did. At the time, we had Obama and the Dems in power, and I had little faith in their fiscal responsibility and the reaction from the equity markets.
So now I'm drawing from it, and coupled with my SS, not only do we live very well, but I have a couple thousand left over every month to roll back into our mutual funds. I will regain my principal in 9 years (from when I started drawing).
Yes, inflation is also a concern, but I'm not sorry I did it. Nobody knows what will happen with the market in 20 years. In 9 years when my wife draws from her SS it will more than compensate for any inflationary pressures, plus she has a Federal pension too. Her pension goes right into our portfolio now, as well.
We have three paid-off houses in a hot real estate market, a nice fat diversified investment portfolio we don't have to touch besides adding to it, and every month that annuity deposit drops in and makes me smile. Doing ok considering I was totally broke and in debt at age 40, and retired on my 60th birthday.
But I totally agree that annuities are not for everyone, and there are some scammers out there who overpromise and under deliver. Buyer beware.
Nate,
I've never understood not annuitizing an annuity. Doesn't a T-note or bond provide about the same fixed rate of return, while preserving the principle? It's been a while since I looked into annuities, and decided they weren't for me. Maybe they've changed.
Matt
GG, if I had found a T note or bond in 2009 that guaranteed 6% plus a bump (with cap) when the market overperformed, I'd have jumped on it in a second. I did invest in a commercial REIT that payed a 6.5% dividend and seemed pretty solid, but my principal has declined about 30% since COVID bashed commercial and retail, a reverse split, and the IPO.
Lou,
I've had about 25% of our IRAs invested in a high yield bond fund. It has averaged around 7-8% since the 2008 crash. Granted it's mostly invested in junk bonds, so there is a little risk, but it's been my "safe haven". Nate gave me a private education on how annuities have changed since I last looked into them. I still don't think they are for me, but it sounds like their structure has improved a bunch. I'm glad your's has worked out for you.
Matt
Stock markets tend to collapse when a crisis occurs. But I believe that it is not necessary to withdraw funds and stop trading at this time. On the contrary, the market becomes profitable again after the departure of weak players, and you can get superprofits during the stock price growth. I learned this on
https://www.earnforex.com/forex-e-books/, and this manner of behavior has already allowed me to earn hundreds of thousands several times. So I continue to stick to this strategy.
I am in my mid 70's invested since I was 29, and retired at 58. Yes I believe in the mattress fund, and standard savings etc, but the market, if your not too greedy, can make you money, it has for me,,,,,,,,
Although now, there is money to be made, there always is, but its up to you, to stay on top of it, know what you own, and have a relationship, with your advisor........
I am afraid, that Inflation is here for a few years. However I am surprised how little gold or silver, has increased in value, which puzzles me,,,,, They are both over sold, but some, in the portfolio does not hurt.
Our market has not "collapsed" really since 29. 87 and 98, were not good, but it did not collapse....... The inflation has been coming. Trump spent too much, in many ways, here comes the spend Commando Biden, and its exactly what we did not need. I knew once the stimulous checks were coming out, it was going to be trouble.....
Biden now has put it in the Federal Reserves' hand, except they are going nothing, and I do not see it at all. The Democrats have their head in the sand, still believing good job reports and wage increases are good, yet they refuse to adjust inflation.
Biggest cause of it all, is the war on fossil fuel. They want green energy, which is not going to happen, and you should just suck it up..... I do think, that they might have to make corrections. No reason we should not be energy independent. I see oil going to 115 a barrel by summer.....................................
I'm raising a little more cash from this current market rip today and tomorrow.
I don't advocate trading stocks........the tax consequences kill you. My son has been trading and he has had some huge gains in Moderna, [I think he said 400%] Pfizer, Nvidia, etc that he sold last year....but its funny to hear him talk about the taxes incurred from the sales. That Nvidia currently has a big fat covered call spread ....but I think the stock can be bought cheaper.
You can use the trading of losers and offset with some gainers to be tax neutral...or rotating from sectors you don't want to be better positioned. I think I can rotate into some good long term holds at a cheaper price later this year.
If not, then no sweat....I just get a mid single digit return in the meantime and I'm good with that while still holding a lot of cash. If the market dips, I buy some good stuff at a discount and hold it which typically results in big gains.
"I'm raising a little more cash from this current market rip today and tomorrow."
Which market did you see "rip" today? Did you mean "dip"?
Matt
Matt, it was up in the first couple of hours…probably due to so many being short…..then it dropped off a cliff.
Sagging more today. I cant predict the future…but typically markets drop more on interest rate rises…then recover some months later. A lot of that selling is in…its the selling for a huge Biden boo boo that Im worried about…and that can happen in multiple categories. I think the Odds are fairly high.
I am very glad that I have a good friend who always guides me in this field in order to not make stupid decisions because I don't understand it at all. He always tells me what and when to do it. I am more a gambler player but who knows the limits and I am very good at controlling myself so I don't lose a lot of money. Plus, I am playing only online on this site
https://wolfwinnercasino.com/ as it offers a lot of bonuses that are best for beginners and also has a fast withdrawal which is very important for me.
Its looked pretty damn rough for the last month in my opinion. But probably not for the stock geniuses in here.
Seeing as the vast majority of the money I have tied up in the market won't be touched for about 15-20 years at the earliest, a one month dip is of little consequence to me.
It looked rough in March of 2020. But you could either sell and cut your losses. Or buy more and make that much more on the way up. Just like buying land in a down market instead of selling in it.
Steve, I didn't believe you about the savings bonds so I looked it up. I had no idea they were paying over 7%. Makes me think we need to buy a bunch of bonds!
I’m screwed now, don’t want to invest in the market and real estate is ridiculous now. I’ll hang in to the cash and wait for the crash(hopefully just a slow down)
FYI.......S/P index up about 7% at the bell today from the start of this thread
FYI.......S/P index up about 7% at the bell today from the start of this thread
Bowsite makes the world go around!!!
Stix, that would have made sense when inflation rates were 2%. With 7-15% inflation your I bonds are worthless. This might change in a year if inflation gets controlled.
Not at all worthless dude if other options performing worse.
Always remember Pigs get fat and Hog’s get slaughtered lol Good luck Lewis
ibonds are only paying 7% because of sky high inflation so it is basically a zero percent return after inflation. the base rate actually is 0 and the rest is due to the inflation rate. you are also limited to buying 10k per year in ibonds and you really cant use them for current income.
In the 10 year period between 2011 and 2020, the S&P 500 averaged nearly 14% annual returns. During that same period I bonds averaged less than 3%. Using the current hyper-inflation period to advocate for I bonds as a long term investment strategy is a little short-sighted, IMO.
Matt
Lets look at the Tea leaves as I think there are a lot of buy the dip guys that have never been through a market cycle like this; 1) Gov posted inflation at 7.9%....last time it was that high 40 or so yrs ago the interest rates were 13%. 2) War 3) Political policy; Essentially we have an administration that is ignoring massive inflation and focused on other agendas. Thus, no solutions in sight. 4) Energy; The world is starting to realize we have been focused on Social issues and taken our eye off the ball- there will need to be some serious and expensive changes to right these wrongs of past policy. Point is, it will be a drag going forward. 5) Supply chain still mess and will be worse in the future due the the realization that counting on world JIT supply is a bad idea. Made in USA will be more important, but also more expensive. 6) many more problems; internet rate rises, Dollar devaluations, etc.
Goldman says its a 35% chance we will go into recession. With the Issues above, I don't see how its not 100% we go into recession. Currently its still buy the dip....when it should be sell the rip. It will probably take a year for the reality to take hold, then it will get progressively worse for the equity markets and small businesses. The companies with no earnings will of course get slaughtered.
Ask yourself; what happens when the folks that bought a home in the last 2 years suddenly have no equity?
Don't shoot the messenger.......
If you are going to panic at every down turn in the market then you shouldn't be in the market. No broker can time the market so i invest for the long term and it has worked really well for me. My average return on my vanguard portfolio over tens year from 2/28/12 is 13.60%. Five year return is 12.20%, 3yr return 14.10%, one year 8.30% What has me worried is that Biden and Harris are completely clueless and the Fed is now a joke.
Down turns create buying opportunities. Millions of dollars are to be made, for those willing to be in it for the long haul.
The markets have been on a nice bull run lately. They're only 5-6% below all-time highs, with lots of good buys still out there. I've been slowly adding positions to my portfolio, mostly value stocks with good balance sheets and plenty of cash, and pay good dividends.
"Be greedy when people are fearful......"
Matt
Asked above- “What happens when people that bought a house in the last two years have no equity in their house?” If they have/want to sell in the short term, they lost money. If not, they have a place to live, make payments and build equity. The alternative is rent and build equity for the owner of the dwelling.
Agreed on that Dale- this isn't the same signs as '08 in terms of housing crash, it may flatten out some but it's not going to drop by 30%. The dollar is worth less, people are still fighting at the bit for property and banks are not giving out loans to McDonald's workers for million dollar vacation home at subprime rates. It's an apples to oranges comparison.
Inflation is rampant, so someone that bought their house 2 years ago will have more equity, they're paying for an asset with less valuable money than when they locked in that mortgage 2 years ago.
I'm continuing to lock in cheap debt on income producing assets while still slugging away at the stock market. I'm in for the long haul while keeping enough cash liquid.
"Prior to retirement in 2018 I was 100% in the market. The gains enabled me to retire at 55. Since retirement I'm totally out of the market, and heavily into Series I bonds. They're now paying around 7.5%. I could have made alot more if I stayed in the market, but I dont need it and I'm content, and living well."
I retired last year at 51 and my money manager at Morgan Stanley cautioned strongly against the traditional investment advice of re-balancing one's portfolio away from equities and towards bonds for early retirees. His thesis is, while may have been sound advice for people who were retiring at 65 and only expecting to live until 80, it could potentially result in people who retire at 50-55 and live to 90 running out of money prior to their deaths.
In terms of liquidity, we are ~98% in equities although we have shifted a bit more toward value/dividends than growth.
As stated above, generating a 7.5% return today is flat/negative once inflation adjusted.
I'm 36 and planning to retire at 55 God willing. Putting 15% into retirement, working on paying off the house next. Only challenge will be we were blessed with a special needs child, and its tough to determine what support she will need as she grows up. We have an ENABLE acct set up for her now to help in the future for any large issues, but for now we cashflow any expenses.
Good for all you that retired when you wanted and could!! If you have solid advice outside what my wife and I are doing I'd love to hear it!
We are entering electric vehicle and electric energy storage age. My advice is to invest in Tesla, but regardless of your investments just remember time in the market consistently beats trying to time the mark - this has been back tested over and over again and is not one man's pet theory. It does require intestinal fortitude certain years. Any serious investor at whatever stage you are in of your life needs to understand the power of compounding interest. Google "Einstein's Eighth Wonder of the World". When you get your investment snowball growing exponentially, it is a beautiful thing...
My only thought is, in this current high inflation environment, I would not pay down cheap mortgage debt any faster than required. Put that money into equities. When inflation is approaching double digit rates and your mortgage interest rate is likely 3-4%, delay paying that back now and use inflated future dollars to do so.
"Any serious investor at whatever stage you are in of your life needs to understand the power of compounding interest."
Worth repeating ^^^^^
Historically, the stock markets have averaged around a 10% annual return (not adjusted for inflation). With compounding interest, that means your stock investments should double every 7 years, without adding any principle. So, under normal market conditions, a $10K investment today would be worth $80K in 21 years. If you periodically add to your investments, your nest egg grows even faster. Exponential growth is truly a wonderful thing, especially if you start investing early in life.
Matt
Agree with Matt on not paying off cheap debt when those extra payments could be invested instead. I don't care what Dave Ramsey says.
And by all means make sure you have a high ESG rating!
Good point on the cheap debt part. To be honest, I cant stand having payments, yes a bit Dave Ramsey thoughts. I max out 401k and IRAs, what else can I invest in for retirement?
Chubbs, think of those "payments" as low interest investment contributions. I took out a reverse mortgage on one of my houses six years ago, used the money to supplement our income for a few years before a big annuity and Social Security kicked in. It was not taxable and kept my reported AGI just above poverty level to qualify for basically "free" Obamacare until I could get Medicare (Hey, I didn't make the rules...). Plus, I could keep my investments intact and rolling through the bull market.
Now, I could easily pay off the balance and not make a big dent in the portfolio, but at 2.4% interest, it makes no sense. It's cheap money that won't come due until I sell the house, and with the real estate market so hot here, my equity is far outgaining the interest accruing on the balance owed.
^^^^ Also known as leveraging debt.
Matt
We did the whole Dave Ramsey thing several years ago, went to the studio to do the "debt free yell" and literally bought the tee shirt. In fact my wife still carries her envelopes with cash. I don't agree with everything he preaches but he is spot on about being debt free, there's nothing like it. We were in our 30's with zero debt including the house, maxing out retirement accounts. Seven years ago we moved and wrote a check for our current home, pretty cool feeling. A couple of years ago I did the unthinkable and took a cash out mortgage on the house to buy 50 acres for hunting. It was a good buy in the exact right spot and it is already worth a lot more than we paid for it so it has turned out to be a good investment. But now I have a mortgage again and I can't stand it, even at 3.5%. We have backed off retirement savings to pay off this loan ASAP, nine months to go to be back in the black. I know that financially it would make more sense to be plowing this money into the market, but I won't stop until it's paid off. Plus, we already have a good amount compounding in the markets. That's my perspective on "cheap" debt.
Mutual funds up from this time last year. Oil stocks you can't loose on, just about ever. Wish I had more oil stock!! With the war and U.S. looking to send natural gas off to europe to replace Russia NG, I say that going to look good also.
The only two stocks I can think of I ever lost everything I put into them were oil stocks. A couple smaller companies but publicly trade. My Father in Law was bitching about the money he had lost in them when oil prices fell. I thought now the time to buy them while they are down. Oil prices did not come back up but stayed low and neither recovered and went bankrupt. Luckily I only bought a few thousand between both of them. Point being you can loose on oil stocks. Not saying don't buy them just lots of diversification.
My two big losers - Penn West, an Alberta oil production company that was once one of the 60 largest companies on the Canadian stock exchange. Totally tanked. Now owned by Obsidian Energy.
The other was a hot tech company I joined in 2000 at the peak of the tech boom. Tellabs. It had the 4th best performing stock of the decade of the 90s (behind Cisco, Dell, Intel). Admin assistants were driving Maseratis after multiple splits. Then WorldCom collapsed (our biggest customer), most of the tech sector collapsed, the stock, and my options, went from $77 to $3 almost overnight. What was a $2B+ annual revenue company now no longer exists.
My biggest loser, recently, has been a Cathy Woods managed ETF. I bit on all the hype after her 3 ARK funds produced the highest returns of any during the Covid market recovery. I bought near the highs a year ago, now I'm currently down about 50%. It's only a loss if I sell, so I'm holding and hoping it recovers. Fortunately, it's a relatively small investment. It's been one of those "if it sounds too good to be true..." type lessens.
Matt
" It's only a loss if I sell, so I'm holding and hoping it recovers."
Matt, I gave that rationing up long ago. I'd get the hell out and put the $ in something that's positive. JMO
Dan, I hear you. I just hate pushing the sell button when I'm in the red this far. It's a very small percentage of my portfolio, so it's not a big difference maker either way. But you're right, I should have dumped it long ago.
Matt
Thanks for the advice guys.
I had some Disney Stock in my IRA that I sold yesterday with a big gain. I think they are committing suicide going woke otherwise I wouldn't have sold.
It's great to hear from you, Dan
It sounds like we have similar investing styles. I have my "fun money" account that I "swing trade" with, then we have our retirement accounts that are more long term. I rarely touch them.
There's definitely an addictive quality to trading stocks. I started dabbling with options a few years ago, but quickly decided that was a little too much "action' for me. LOL!
Matt
Nice to see you post Blue! Hope all is well up Nort.
Thanks Norse..... been a hard long winter for an old man. Still haven't quite shaken that dang Lyme disease crap it seems. Did not even get on the ice this year. :( But...getting by.
Dan, using a moving average for stops is a good idea, but it seems like a lot of work. Can you automate that, or do you set new stops daily?
Matt
I used to set stops daily, too. Then in Sept of 2020 I went on a month long elk hunt. Before I left, I set stops at a fixed percentage below the current share prices. You may recall, the markets had a short-lived correction of about 10% that month, then climbed right back up. Over half my portfolio sold off, while I was chasing elk. The taxes on that mistake stung a little...LOL! So, I'm still searching for a method that doesn't require daily input, too
Matt
Matt, I say your elk hunt stops worked perfectly. The market reversed and went up but it didn't have to. I think any stop is gonna get whipsawed sometimes. But it's priceless insurance.
It's been hard for me to go this way but I'm pretty sure for me it's the way to go.
Matt, if you hadn't been on a hunt would you have changed your stops?
Just my opinion...if you're gonna change your stop because it's gong to be hit, why'd you set it in the first place?
Still learning and hopefully always will be.
Dan, yes, I would have changed the stops on a few positions with healthy short term gains, for tax reasons.
Matt
I think we will look back on 3.25% mortgages in a few years and see it was a no brainer.
Bluedog, thx for posting…interesting. Is there an indicator in your system that would have you increase the $$ devoted to a trade?
bluedog, first of all thank you for your service and second for your advice along with others such as Grey Ghost regarding buying stocks. Had I known to do what you guys are saying maybe I would have avoided the complete loss of my Enron stock back in 2001. Badbull
beendare...not really, I've been know to increase a holding but lack records to show + or - results.
badbull...... I had my own disaster around your Enron time.. I'd run my account up over 450k with what I recognized as very dubious valued internet crap. I was 10 foot tall and bulletproof no stops. No skills and really a total FNG... I'd just sell when market turned. Then the fickle finger of fate threw a knuckleball. I got stupid and did a compound skull fracture, mri showed 2 brain tumors previously unknown .. anyway after surgery and gamma knife..maybe 8, 9 months later I'd come around enough to remember I owned stocks. After logging in my fat 450k was down over 95%. Yup.. fk me. LOL Should write a how not to self improvement book.. How to turn 450k into 18k.. lord , makes me nauseous just remembering, try to block it from memory.
Guess education isn't free.
Beendare...one more thought on size of holdings. If it's an etf or a fund I don't mind holding a large position. An individual stock, no more than 8 or 10% of my $. If a CEO gets caught with a goat or whatever.. a individual stock can crash and gap way down overnite. Not so a ETF or fund. They are collections of stocks or commodities so immune to that. Of course they'll go with tide of entire market up or down most times.
For those who don't recognize bluedog's handle, I suggest you pay attention. He's one of the Bowsite's classics, back when Bowsite was in its hay day. We could use more of him.
Matt
bluedog, Yes, education is not free but in my case firing my "money manager" after my sudden loss (figgering that I could learn to do as well as him) allowed me to learn to do my own investing. For me that has been a smart move as the information is out there if you put out some effort. I think his thread has developed into an interesting one. Badbull
"He's one of the Bowsite's classics," yeah kind of like a 51 Studebaker or a 57 DeSoto.... LOL
“ But now I have a mortgage again and I can't stand it, even at 3.5%. We have backed off retirement savings to pay off this loan ASAP, nine months to go to be back in the black. I know that financially it would make more sense to be plowing this money into the market, but I won't stop until it's paid off. Plus, we already have a good amount compounding in the markets. That's my perspective on "cheap" debt.”
“ Dan, I hear you. I just hate pushing the sell button when I'm in the red this far.”
You both would be smart to take the emotion out of investing - it causes people to make bad decisions because they “feel good”.
Matt, I'm well aware that being emotional about investing is not good. Anyone with money to invest needs to have their own comfort level. If you don't have the stomach for the ups and downs then the stock market is not the place to be. I don't care about the ups and downs, but I do "feel really good" about not having a mortgage, but that's just me. A lot of wealthy people use debt to their advantage, but I do believe that there is some truth in "the borrower is servant to the lender".
Who cares, Stix? I'm guessing anyone who hasn't comfortably retired with annuitized funds cares. But that's just a guess.
Matt
Depending on your 401k you might be able to take advantage of a nice loophole in the tax code. I contribute to a traditional 401k even though my employer offers a roth 401k deduction. My reasoning is once I retire I'm out of this hellhole called NY and probably moving to Tennessee, Kentucky or other low tax state. I figure I'm saving 8% in state taxes maxing out my 401k deduction. But my employers plan also has an after tax component which is different than a roth. I make after tax contributions and then at the end of the year my plan allows for an "in plan conversion to roth" where all I pay tax on are my earnings for the year and now all those after tax contributions become roth contributions. Only downside is Biden wants to get rid of this loophole in his Build Back Better plan so I hope it never passes.
I had a similar story to Bluedogs except I wasn't running my own money back then. I had it with a "Highly rated" Advisory firm, Mackentyre and assoc. that had our money in 25 stocks; the likes of Enron, El Paso, and many more that are no longer in business.
That account kept dropping and they said, Buy and hold works. Then it dropped to 50% and we told them to sell....no, it will come back they said. We finally forced them to sell at Down 70%. It could have been worse, many of those companies went to zero.
Now I know their buy and hope strategy sucks.
That was when I decided I need to run my own money. I too own mostly ETF's broad market and actor specific....I'm currently only holding 2 stocks, GOOGL, TRTN. I will probably buy more Googl shortly [before the 7/1 split]
There are industries that I want to own going forward for long term growth like Semis, [SMH] but I'm going to wait as inflation and current market and politics point to tough sledding. FENY, XME, FMAT, XLB, XLE are all sectors that will hold value in inflationary times.
I might trade the China internet ETF and the Cannabis ETF's next week on news...but then I might already be too late to the party-grin
Mint, interesting idea on the conversion. My company also allows after tax 401k contributions (not Roth). I'm maxing out the pre-tax 401k (including catch up contributions) already, but could move some additional $$$ to the after tax bucket. Curious if that loophole would be a viable option for me though...as I already max out private Roth IRAs annually for myself and my wife?
Stix, sorry, I didn't realize you were responding to a post from weeks ago. Addressing that person would have helped.
"You both would be smart to take the emotion out of investing ..."
Matt, obviously you're correct. I took your advise, yesterday. I dumped Cathy Wood's crappy ARKG fund for a 46% loss. Then I used the remaining cash to buy call options on GDX, which are currently up 31% in just one day. I just set a tight stop on them, so I've locked in those gains, with plenty of expiration time left for them to climb even higher. Now that feels pretty good ;-)
Mint, perhaps I haven't had enough coffee this morning, but I don't understand how your employer's after-tax plan is much different than a regular ROTH plan. Do you mind explaining? Thanks.
Matt
"Mint, perhaps I haven't had enough coffee this morning, but I don't understand how your employer's after-tax plan is much different than a regular ROTH plan. Do you mind explaining? Thanks."
i don't think it is. i think he is just referring to after tax 401k contributions being reclassified as roth at the end of the year.
"Matt, obviously you're correct. I took your advise, yesterday. I dumped Cathy Wood's crappy ARKG fund for a 46% loss. Then I used the remaining cash to buy call options on GDX, which are currently up 31% in just one day. I just set a tight stop on them, so I've locked in those gains, with plenty of expiration time left for them to climb even higher. Now that feels pretty good ;-)"
I'll PM you my address so you'll know where to send the advisory fee. ;-)
Not to mention you now have some losses that can be used to offset gains if you want to re-balance anything within your portfolio.
Never bothered with the markets. Retired 21 years ago and during that time had a solid income nearly double what I earned in a 40-year career. Got out at 55 and alive. Just enjoy a comfortable living. Spouse is younger and were I to hit the high lonesome, she will be comfortable until we cross paths again.
As much as I agree with everyone that says if you can't handle daily, weekly and monthly dips you probably shouldn't be in the market. But just looking back at the QQQ. If a guy would have bought in 2000 at the all time high, you would have to wait 16yrs to get back to break even. That's a little tough to look at that and think that you would have been buying the dip for that long
Rusty, on the other hand, if you bought the Qs in 2015, your money would have more than tripled, now.
Matt
Yep. I guess I was saying that after looking at a chart. A person putting money in might have to stomach a dip/flat market for a LONG time. But yes, it will average out well when it climbs like it did from 2015-2022.
That is also why you diversify your portfolio.
I've also recently learned that passively managed index funds will almost always outperform actively managed mutual funds. In 2021, I think over 90% of mutual funds underperformed their indexed peers. It has to do with how the markets are structured. These days, a handful of mega-companies represent a greater percentage, and prop up each index. Unless a mutual fund is weighted similarly, which most aren't, it will underperform.
Matt
In regards to the after tax conversion to roth loophole. I max out on my traditional 401K plan which was $26,000 in 2021 since I am over 50. My compensation is over the limit so i can't make a roth IRA contribution but i can make an after tax contribution and then convert to a roth only paying tax on the income earned on the after tax contribution. There is a limit of $60,000 per year of contributions including company match so I'm able to contribute about $28,000 to the after tax part of my employer plan. So at the end of the year I end up with a traditional 401K contribution of $26,000, my employer maximum match and a Roth contribution through in-plan conversion of around $28,000. This is along as they don't fix the loophole.
And by all means make sure you have a high ESG rating!
After all this if they unveil the digital currency and all that is proposed to be involved it won’t matter how you manage your money…because the government will do it for you!!!
Helluva beating today. The late business news today had the issue at hand. The Inflation data will get posted and word is it USA record bad. Hard to watch on a day like today. Chuck
May ALL crypto currency please go to zero. Its only gambling.
Hmmm Biden said that inflation peaked in December…….hoping the media would just parrot his comments ( straight from Obamas playbook)
Except, whoops- the CPI print is well above 8% and rising in March. Worst inflation in 40 years. That brings up 2 questions;
1) when will people take their earnings after tax and multiply by .08 to see how much they are losing due to this administration.
2) when will the avg Democrat see through this load of horse puckey the current Dem politicians are selling? Its costing us all a lot of $$$$
.
Matt's Link
US COVID stimulus has definitely driven domestic inflation, but the recent increase in the rate of domestic inflation has predominantly been caused by global macroeconomic factors. As examples, Germany had inflation of 7.3% in March (link) and the UK hit 6.2% in February (https://www.metro.us/uk-jobless-rate-lowest/?msclkid=afe2d6a5bac911ecb830ccc4cff847e2). By way of comparison, US inflation in March was 8.4%. That is ~1%-2% higher than a couple of other major global economies and is a more reasonable approximation of what may have been caused by the current administration's policies.
Beendare, “when will the average democrat see through this horse plucky….. Unfortunately, for a large portion of them, probably never. They like to punish success, because they’re unwilling to get off their ass and succeed themselves.
Well there you have it...
I would like to thank all the panic sellers for enabling me to get several shares at a more than 20% discount.
Might check out I bonds too. 9.63%, inflation adjusted, compounded semi-annually, NO state income tax. Not bad for current environment.
The winners in this environment will be the ones able to block out the noise.
all those saying covid stimulus was not the root of inflation in the US and cite inflation in other countries are not acknowledging that all those other countries had massive covid stimulus also.
I'm bummed that the market is starting to rebound. I'm about to close on the sale of a house and was hoping for the 28 range before I invest it. Oh well, I'll take what I can get.
SDHNTR for the win. Along with everyone else who doesn’t panic.
“The stock market is a device for transferring money from the impatient to the patient.”
Warren Buffett
I feel bad for the Buy hold guys…but this was predictable as I said earlier in the year.
Yes, Stocks are cheap….and they can get even cheaper.
Im in no hurry to jump back in. I look at future trends. Are things going to be better economy wise in another year? I don’t see how with the current idiots in charge.
Some industries should hold their own; oil, nat resources, Healthcare…but again, no hurry.
.
Completely agree with kentuckbowhnter. Just because every other country is as dumb as the USA and Canada, and the whole western world doesn’t mean that money printing and low interest wasn’t the number one reason for inflation, by far!
We are in a worse financial position than we were in the 1970’s when inflation took off and stagflation set in. It was brought back under control with a 13+% fed rate because the federal government could afford the high rate on their own debt. Debt to GDP was only 35%, now it’s 135% and they are still printing money, it hasn’t stopped. As far as I can see a 3% to 5% fed rate won’t stop an 8+% inflation rate it never has, has it? Can anyone give an example when it has?
I have been in the market for the long haul, about 35 years so far. Great times.
I have been in the market for the long haul, about 35 years so far. Great times.
Inflation started by the zealots keeping the economy shut down 18 months longer than they needed to.
So Supply was strangled.
Then the same Marxist zealots juiced the economy with printed free money. THEN!! As if that wasn’t bad enough. Paid people to stay home, digging the supply side hole deeper.
So then with everyone at home with free cash, demand for EVERYTHING skyrockets. When demand outstrips supply, Inflation occurs.
But for some reason everyone has already forgotten that the incompetence started with the 3 yr Covid lock downs.
And they are pleased that no one is tying this back to Covid.
Because it took Civil disobedience to remove the mandates. Other wise we would still be locked down. So thank Joe Manchin and the Covid protests or this would be even worse.
"And they are pleased that no one is tying this back to Covid."
That may be one of the oddest takes I have read on this site - of which there have been many.
What do you need me to clarify for you Matt
"And they are pleased that no one is tying this back to Covid."
That’s called the truth. Our Canadian debt was doubled during Covid. We had a greatly lowered supply of goods and a giant increase in money supply, way more than we needed in either country and we now have inflation. How could we have known that would happen?! And now we won’t be able to get it under control any time soon without paying a huge price.
Completely agree with kentuckbowhnter. Just because every other country is as dumb as the USA and Canada, and the whole western world doesn’t mean that money printing and low interest wasn’t the number one reason for inflation, by far!
Spot on Mike. Monetary policy has been far too accommodative for far too long…
In a series of tweets, Mr. Trump said, “The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” adding that “the USA should always be paying the the lowest rate.” Mr. Trump continued to criticize his handpicked Fed chair, Jerome H. Powell, saying, “It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing.” - September 2019
But, bigeasygator it certainly wasn’t just a Trump phenomenon, he simply kept it going and Biden put easy money and low interest rates into hyper-overdrive during Covid out of either stupidity or incompetence, not sure which is worse. Biden could have at least begun to correct the problem mid 2020, especially during a time of restricted supply of goods, but he choose not to and continues not to right now!
And Trump was pressuring (and succeeded) to get the Fed to lower rates prior to the pandemic when, in his words, the economy was roaring. Lots of accommodative monetary policy being pushed for a long time (yes, before Trump as well).
Biden should be giving Manchin the medal of freedom for saving Biden from himself. Stopping the 3rd wave of spending
But let us not forget. Millions of people were calling for the Covid shut downs to end 18 months before they finally admitted they were wrong. (Studies showed the lock downs and masks did nothing to stop Covid).
They had the FBI on terrorists parents. Had kids locked out of schools. They listened to that hack Fauci who if given a chance would lock us up again.
Free money has been going on for too long and eventually had to be reconciled.
But It was their Marxist tendencies that really drove us off the cliff. Again we should be thanking 2 democrat senators for saving us from further damage.
"What do you need me to clarify for you Matt"
The definition "no one" to start.
You got me Matt. Should have written (many) . Not “ no one”
It’s frustrating to me that it seems that many have appeared to let them off the hook for demolishing children’s education, mental health, and the economy. Because the Marist elites knew better than the peasants who actually ended up being correct after all.
60 years old still contribute max deductions to 401 k have not lost a dime the day Biden was elected changed all stocks to stable value fund saw it coming will go back to stocks in 2024
People who harbor very strong political convictions, on one side or the other, make lousy long term investors. The market cares not one bit about your politics.
Goldman is predicting a pretty hefty relief rally.
I don’t see how this situation can be resolved quickly. It seems to me there are more shoes to drop…but I’m just a working stiff and not an economist.
This current US admin- along with Obama and Trump- don’t understand budgeting and being fiscally conservative. Obama and Biden ( actually the same admins) spend on Social issues. Trump used his mantra, spend money to make money. These politicians think they can spend whatever they want.
We have inflation with the next phase being folks clamoring for higher wages….which will exacerbate things. The Biden admin will jump on this wage/unionize bandwagon using Corporations and “the rich” like Hitler used the Jews as his bad guy. ( They always have to have a bad guy)
I just don’t see a quick resolution….and if there is some catastrophic event things will go sideways in a hurry. In a big sucking downtrend, very few businesses aren’t affected.
I’m really trying to identify an investible trend here moving forward….
I think if we get a decent bump over the next month 8 will jump back into the inverse ETFs that have done pretty good as hedges over the last few months.
.
“ Most will throw grandma under bus for a buck.”
He is talking about people who throw themselves under the bus because they are too dumb to separate politics and finance.
And then there are those who can’t distinguish between themselves and their grandmother….
I made 19 percent for 30 years on my investments and also bought real estate. When Sleepy Joe took over I cashed out not wanting to loose what I gained.. at my age the long haul was over. I make my money on real estate. And my cash is tucked away. Cash is King. I feel bad for young people just getting started and sinking money in the stock market now only to watch it disappear .
I feel great about young people just getting started and sinking money into the stock market as they will grow substantial wealth over the next several decades.
I agree, SDHNTR. Heavily investing in stocks at an early age was the best financial move we've made. Our real-estate investments have done OK, especially recently, but they haven't kept pace with our equity portfolios over the long haul.
Matt
I made 19 percent for 30 years on my investments and also bought real estate. When Sleepy Joe took over I cashed out not wanting to loose what I gained.. at my age the long haul was over. I make my money on real estate. And my cash is tucked away. Cash is King. I feel bad for young people just getting started and sinking money in the stock market now only to watch it disappear .
"Cash is King. I feel bad for young people just getting started and sinking money in the stock market now only to watch it disappear ."
I feel bad for anyone who follows your advice.
Cash is depreciating at almost 10%/year based on the current rate of inflation, so it is probably the worst way to hold value right now. I have a couple of very conservative elderly friends who are 100% in cash because they think like you and their financial wherewithal has been significantly diminished over the past year.
On the other hand, putting cash into a depressed stock market should prove to be a great investment over time. My wife and I invested heavily through the 2008 recession and are in a very fortunate position as a result. By low, sell high.
If the markets start dropping much faster than the rate of inflation then cash would be king. Especially if you are 70 yrs old and don’t have the time to make back the money. Having cash on hand to deploy in a year or two after a massive crash in the markets could be the smartest thing a person could do, or not, maybe this is the bottom, we don’t know do we?
I'm no financial expert, but I always thought like Matt a couple posts above, if you can invest heavily during a recession when prices are down, seems like your long term will greatly benefit.
I've been trying to hammer a couple accounts and buy as much as possible since they've been going down so far.
I'm 25 years from retirement and 9 years from my daughter's college. I can't help but think both longer terms will benefit from me buying now when the prices are low
Historically, the S&P index has averaged a 10.5% annual return since its inception in 1957. That includes crashes/corrections along the way. At that rate, your stock investments will double every 7 years, if you let them ride. Albert Einstein was correct when he said "compounding interest is the 8th wonder of the world."
Matt
Historically, the USA has never had an 8+% inflation rate, and no ability for the fed rate to go above 5% and 135% debt to gdp, have we?
And the S and p doesn’t always give a 10% annual return every year. There are 5 year periods where it gave a negative return, that is important to consider when you are 70 yrs old.
Sorry, I thought we were talking about young folks investing in the markets. Obviously, strategies change as investors age.
We’ve been heavily invested in stocks since the ‘90s. We always contributed the max we could to our SEP IRAs. We rode out the crashes in 2000 and 2008, without cashing out any of it. Yes, it was tough seeing our balances plummet, but they eventually recovered and continued to climb. We were both making decent money, so we simply stayed invested for the long haul. It proved the old saying “it’s all about time in the markets, not timing the markets”.
Matt
Glad you missed me, Shawn. BTW, I specifically stated I was retiring from political threads. I don’t consider this discussion political.
Matt
Historically, the USA has never had an 8+% inflation rate, and no ability for the fed rate to go above 5% and 135% debt to gdp, have we?
And the S and p doesn’t always give a 10% annual return every year. There are 5 year periods where it gave a negative return, that is important to consider when you are 70 yrs old.
Trying to time the market is a fool's game.
“Historically, the USA has never had an 8+% inflation rate, and no ability for the fed rate to go above 5% and 135% debt to gdp, have we?” Good point Mike.
This is why historical returns can’t tell us the whole story for a next decade time frame. The last time these economic indicators aligned was the early 70s and if you look at The following decade after that the overall stock market was dead money. I get the impression there are many here like myself that don’t have a 40 year stock market time frame- grin.
I mentioned sectors, trends and in particular semiconductors early in this thread. One trend I think is worth watching is for semis to be in more and more of the products we use. Its estimated the semi industry demand will double in the next 10 years. Thats a trend we can make money on.
How you do it is up to you. Its awfully tough to pick rock bottom….or pick one no brainer winner. Its easy to dollar cost avg into a a basket of these companies over the next year, 2 years or more to capture most of that gain- BTW, this is my strategy.
I will do a couple individual names but most of my money will be in SMH, an ETF that owns a basket of hundreds of these companies.
Who knew you could get such good investing advice on a Bowhunting forum- grin
“How you do it is up to you. Its awfully tough to pick rock bottom….or pick one no brainer winner. Its easy to dollar cost avg into a a basket of these companies over the next year, 2 years or more to capture most of that gain- BTW, this is my strategy.”
Excellent strategy. Very few people get rich by correctly anticipating market highs or lows. Most get rich by steady investments over time into an index whose trajectory is up and to the right.
Any thoughts heading into the new year? Are the guys that pulled out moving back in yet?
I’ve done little except dump one stock that has underperformed for to long. I work with an advisor and neither of us are dumb enough to try to time the market. We invest in a mixed portfolio, re balance occasionally and take a long term approach to investing. Having said that, it’s pretty hard to be optimistic with the people running the country today.
I’m DCAing in to some sectors like Energy and emerging markets through ETFs.
I’m holding back a chunk for tech and semis later this year…a ways from the bottom. When Apple tells suppliers to cut production- thats a telling indicator.
I've been dumping some money back into my stock mutual funds on bigger pullbacks. Tempted to again soon. Like has been said, too hard to time the market. Warren Buffett always says buy when the masses are running scared. Will always pay off in the long run. With retirement a year away, I will keep a solid 4 years in cash.
12yards, I like the way you think. If we knew what was going to happen it would already be factored in.
I’m investing in CDs the rates are pretty sweet right now.
If we knew what was going to happen it would already be factored in
That's called Efficient Market Hypothesis and I'm a big believer. It's also why you should view anyone that claims to know for sure what way markets are going with a very healthy dose of skepticism.
Still buying stocks on a weekly basis!
Not doing real good this past year but better than those who put their money in bitcoin.
Local credit union has a 6 month CD that is paying 5%. 50 grand to open. That is where my new money went.
Matt's Link
To sprinkle some perspective on the notion of investing in the stock market, I like to suggest that people look at the S&P 500 trend chart in the attached link (proxy for the broader market). The chart defaults to a 1 day view, but you if change that to 1 year (looks bad) then 5 years (looks good) and finally max which looks back to 1984 (looks really good), the results should be self-explanatory. If you only have a 1 year or shorter time horizon, the stock market probably is not the right place for you to put your money. But if you have a 5 or better yet 10 or 20-year time horizon, it has proven to provide solid returns over time.
And as an extension of that, retirees generally do not liquidate their portfolio all at once to fund their expenses, but rather we take it out a little bit at a time monthly/quarterly over decades. That makes it even easier to ride out the up's and down's with a buy and hold strategy. Think of it as dollar/cost averaging on the sell side.
Guys can try to time the market all they want, but in more normalized/less volatile times it was not uncommon for the market to generate ~ half its annual gains in just a few sessions each year. For those who jump in and out trying to time the market, it is pretty easy to miss most of the upside in and given year (not to mention suffering the potential tax consequences). Slow and steady wins the race.
I'm still selectively investing in specific sector-based ETFs, with a healthy percentage of cash set aside for major dips.
I'm also kicking myself for not investing in the structured notes that a financial fiduciary friend suggested to me a year ago. They were too new and complicated for me to pull the trigger on. Turns out they would have been my best investment over the last year. 20/20 hindsight, I guess.
Matt
Not that complicated if your already an options trader. Bond with an options trade. Risky. Was not hard to double the market with some well thought out trades. Plenty to be made in the bear market. Solid companies good dividends across many sectors. BH
I have no portfolio, just State retirement income, debt free, retired at 58 YO now self employed using accumulated life skills. Living within my means stress free and loving it. It doesn't have to be about money assets
“I'm still selectively investing in specific sector-based ETFs, with a healthy percentage of cash set aside for major dips.”
Agreed, good strategy.
I get the argument for S&P…but I find looking at sectors that will outperform in the 1,3,5 year time frame does a lot better.
Example; lots of big Software Co’s out there with very high valuations (30+ PE’s). Earnings estimates are notoriously slow to adjust… many of these are way overvalued and could really tank if earning come in bad qtr after quarter. Sure a company like NOW is ubiquitous and used by many companies…a proven and great product…but it has no PE…still loosing money. Will it be a winner in 10 years…probably…but its risky to pay too much for anything…and I think the S&P qualifies as overvalued right now.
On the contrary; There are energy co’s trading at low single digit PE’s and paying very good dividends…IMO, a much safer bet for the next year or so anyway…. I own some for a couple years now, and nibbled..but will be piling in if oil goes below $70 or they dip another 5-10%.
Beendare, we think alike. My energy sector ETF has been my most heavily weighted ETF in my portfolio for almost 2 years. Frankly, that position has caused my portfolio to outperform all of the major indexes by a significant amount.
Matt
Are we talking XLE? It’s been a good ride indeed. And the dividend is nice.
Any other favorite ETFs out there? Or specific sectors with the conditions we’re in now?
Beendare's Link
Yeah, trends are good. Take a look, I just Bought some SQM (PE7, div 9%, country and labor risk but very low valuation)
Good factual article on Zero Hedge on E V’s and where are all of the minerals going to come from at link
Been very conservative since Biden came in, still been a yo-yo but still on the positive side, still have to be ahead of the inflation and tax by 2% to have a gain.
KB, yes, XLE is my energy ETF.
Beendare, do you have a reason for investing in just one metal company instead of a ETF that focuses on all EV related metals, like EVMT?
Matt
Snag's Link
https://www.officialdata.org/us/stocks/s-p-500/1980
Might put some numbers in this calculator and see what you come up with.
https://www.officialdata.org/us/stocks/s-p-500/1980
“I have no portfolio, just State retirement income, debt free, retired at 58 YO now self employed using accumulated life skills. Living within my means stress free and loving it. It doesn't have to be about money assets.”
That is all good and well if your pension system is in good financial health. There are examples of municipalities cutting pension payments by as much as half due to financial issues (e.g. Stockton bankruptcy). That would be pretty tough on retirees without a plan B.
Edit: high inflation can have a big, negative impact as well depending on COLA features.
“I get the argument for S&P…but I find looking at sectors that will outperform in the 1,3,5 year time frame does a lot better.”
For sure, that was just one example to highlight the error in looking at short, discrete time periods to come to conclusions about the value of equities as an investment vehicle.
On the flip side, if one wants a set it and forget long-term investment strategy, the S&P 500 is broad/diversified. While it has been a few decades, a finance professor I had in grad school had done a bunch of work and demonstrated the S&P 500 index outperformed the majority of assets managers in the intermediate/long term.
For those of you who tout higher than market returns, are you netting the tax implications (short/LT capital gains tax) against those that or just quoting a gross return? Taxes are the hidden cost of an active management strategy.
Matt, I haven't done any short term market investments for over 3 decades. I learned the difference between normal income tax and capital gains tax very early on in my investing career.
Matt
Another advantage to an S&P 500 index fund is I think you avoid all this ESG BS.
So far so good Matt. Debt free helps me be a bit more trusting. I don't need a lot
GG, Every once in awhile I think I’m smarter than the market- grin
FWIW, I have done well by doing extensive research…and following a simple concept, “reversion to the mean”
That hurts me a little on high flyers that run way up as I prefer to lock in profits on steep run ups………but its made me a lot of $$ and it limits my market risk. Heck just look at a LT chart on Apple and then tell me the buy and hold strategy is better.
edit; I should clarify. I do not just buy stuff because its off 50%- thinking it will rebound. I look at charts and then reconcile with real time market conditions.
I used the software example earlier. Take CRM. Its been a good LT performer over many years…now its off big. They just laid off 10% of employees…and more importantly, businesses are pulling in their horns and not just throwing money at software right now. No way 8 buy a CRM here…but down the road, when there is light at the end of the tunnel for business it will rebound.
That reversion to the mean is powerful…but its critical to reconcile with both the market and sector conditions. .
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No way 8 buy a CRM here…but down the road, when there is light at the end of the tunnel for business it will rebound
Very difficult to judge when there's a light at the end of the tunnel IMO. Which is why I think the best strategy - particularly on a long term basis - is to continue to invest in a well-diversified portfolio. If stocks have further to fall, you will be lowering your cost basis for what is likely an inevitable bounce. It's really hard to predict the general trajectory of the market, which sectors will outperform others, and - most importantly if you're trying to make money off that information - where there are opportunities to generate alpha.
Beendare, thanks, but you kinda lost me with "reversion to the mean" and "LT chart". Technical analysis is voodoo to me. I'm more of a fundamental analysis guy.
Speaking of which, I checked out SQM, and I like it!! I couldn't find a single negative in their fundamentals or valuation. And their earnings are projected to go from their latest $2/share to $13/share in their next report in March. Wow! I don't see any reason not to buy some. Thanks for the tip.
Matt
Im already getting too far in the weeds for the, “ THIS IS AN ARCHERY SITE GODDAMNIT” crowd…grin
I will ping you off line.
Goldman Sachs is paying 4.26% on passbook savings right now. Hard to buy CDs and tie money up even short term when you can get 4.26% right now and have instant access if you need it. I thin we are still a good ways from the bottom. I have been buying some structured notes that go 12-17 months based on the S&P 500 performance with a buffer. risky but not as risky as the broad market. I think energy is a good play right now. It will eventually explode again.
90 day TBills looking great right now. Bh
Going back to work the end of January and already set up a 15% direct deposit into my investment account.
Ilbowhunter, that’s a very astute first step. Spread it into a balance of investments and in the long run you should do great.
If you're under 50-55 years old.......all signs are to keep buying. Still choppy waters ahead and lots of paper loss but when everyone is running for the savings accounts it's time to put cash to work. Stay the course! History repeats itself.
I admire and applaud you all who understand financial markets and have worked, planned saved and prepared for later life. That was never in my tool kit of skills and interests. Luckily I found a workable alternative. Enjoy life fellas.
You need to be in congress or senate to get ahead of this game, the market is too unstable with the debt and inflation, time to be in a defensive position in this market.
I could never time the market so I've always ridden out the lows. I'm thrilled that I was able to max out my 401K at $27K, get company matching contributions of a few points and then use the in plan roth conversion of after tax contributions to create a $35k roth. Since the index 500 fund expenses are practically nothing that's where I parked it. the great thing is now that republicans have congress the inplan conversion loophole won't be repealed.
Everything is rainbows and unicorns right now with the January effect…we should all make money. We probably have a solid month or two of up….
The worry is recession and the corresponding downward revisions to Earning estimates which IMO is almost guaranteed for the S&P index stuff ( except oil) stuff like EEM I hold in taxable acct and will keep- it should hold up.
Going in and out of the market to hedge your risk is not the same as traders timing the market. I use the former especially in IRA accts and anticipate I will be in bonds by mid year……with remaining equities hedged in my taxable account.
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The genius’s of the stock market were in a simple S and P 500 ETF until Dec of 2021, then they sold out and bought just the Energy Portion of the S and P 500! They made bank!! Anyone here like that? Any Financial advisors give out that advice?
The S and P 500 peaked at about 4700 in Dec 2021 then dropped to 3900 now. The Energy portion of it went up by 50% or more during that same time. The funny thing is that the mainstream media barely reported on it. I guess they don’t like Oil and Gas…
"The funny thing is that the mainstream media barely reported on it. I guess they don’t like Oil and Gas…"
I guess that depends on what "mainstream media" you pay attention to. Places like Fox Business Network and CNBC discuss the energy sector's performance almost daily. So does online investing sites like Zero Hedge, Marketwatch, and Motley Fool. Not everything is a conspiracy.
Besides, it doesn't take a stock market genius to recognize that oil and gas companies would do well with oil at over $100/barrel and gas at $5/gallon with strong demand. I piled into the energy ETF called XLE almost 2 years ago. It has propped up the rest of my portfolio.
Matt
About take some profits real soon and park a bunch into T Bills and wait out this pending Impeachment and market downturn. Wont be selling any small or large cap energy stocks. Bh
"The worry is recession and the corresponding downward revisions to Earning estimates which IMO is almost guaranteed for the S&P index stuff "
Beendare, when do you think this will be "priced in". I was thinking since everyone (just about) thinks we are headed to recession and poor earnings, it might be close to priced in already. I suppose there is always room for it to be worse than forecast. But then there is also the possiblity of surprise to the upside as well. Again, timing is tough.
The genius’s of the stock market were in a simple S and P 500 ETF until Dec of 2021, then they sold out and bought just the Energy Portion of the S and P 500! They made bank!! Anyone here like that? Any Financial advisors give out that advice?
Working for an oil and gas company, a tremendous amount of my financial future is tied to the performance of the sector (salary, bonus, stock options, etc) - so I'm pretty heavily exposed. With regards to my investments, I treat them as a hedge to the rest of my O&G exposure and diversify into other sectors.
Beendare, when do you think this will be "priced in". I was thinking since everyone (just about) thinks we are headed to recession and poor earnings, it might be close to priced in already
This is my opinion as well. The downturn we seen has been driven more by the impact of a potential recession than the impact from the change to working capital costs. Very possible we see a very slight recession and a hit to earnings and actually see stocks bounce because of it. Seems more and more people think this might be a soft landing instead of a hard landing.
Grey Ghost, I see news and advisors talking about it now, after, the increases. Very few were talking about when you needed to be dropping the tech heavy S and P 500 in Dec 2021 and going into the underpriced oil stocks to catch the gains. It’s easy in hindsight, and too late, when oil is $100 a barrel.
And yes, it’s very under reported in mainstream news and there is a definite anti-oil and gas bias. You’ve heard of the climate catastrophe coming up that they occasionally report on, all caused by the horrible oil and gas industry?
And good for you if you had the sense to ignore the bull and invest heavily in oil and gas 2 years ago. You’ve more than doubled your money! Most people didn’t and it was off the radar for many financial advisors. That’s why I asked who did, I was curious.
I’ll be 72 next year. I have to start taking money out of my investments. I get to choose how much I want out and there is a minimum amount you have to take according to how much you have invested. If you invested at a early age with a financial expert you should be okay. I don’t believe the stock market is influenced by politics, I do believe it can be influenced by the small percentage of people who control 90% money.
ESG ratings for stocks are all the rage now and purely political.
And good for you if you had the sense to ignore the bull and invest heavily in oil and gas 2 years ago. You’ve more than doubled your money! Most people didn’t and it was off the radar for many financial advisors. That’s why I asked who did, I was curious.
In my opinion I would avoid any financial advisor that suggests you invest a heavy amount of your portfolio into a single sector.
I don't know if any of you follow the Shiller P/E ratio of sectors and individual stocks. It's a more accurate way of valuation than the standard P/E because it eliminates fluctuations in profits during business cycles. The historic 20-year average Shiller P/E for the S&P is 26. Currently it's at 28.8. If history is any guide, the overall markets have a bit further to slide to reverse back to the 20-year average.
If you look at the Shiller P/E by sector, financial services is the only sector that is significantly lower than the 20-year S&P average. Considering that rising interest rates will benefit financials, I'm guessing that sector will outperform the rest in 2023.
Not that anyone should go all in on one sector. A well diversified portfolio is always the safest bet. But, If you're like me, and like to invest a bit more in individual sectors that you think will outperform during a specific period, you might take a look at financials.
Disclaimer: I'm just some dude squawking about investing on a bowhunting forum. Take my opinions for what they are worth.
Matt
Yeah- just some dude here too ….but I have been studying this for decades
Mike- That is sector rotation investing- my chosen strategy like I previously mentioned. Example; I think something like EEM is a sector that should do well in the next 1-5 yrs ( country risk here- use stops)
I think a recession is only partially priced in, in other words, I don’t think its a steady ramp up from here. We are seeing the January effect, my bet is it doesn’t last until mid year. I think Analysts haven’t priced in a recession yet.
Why; 1) the fed is essentially telling us they will tank the economy and overpriced assets ( ie- the market) 2) Demand has fallen off a cliff, Ports clearing up- less goods coming in, just about every retailer cutting back on orders, RE, Car sales dropped like a rock, companies laying off, etc
When Goldman lays off a bunch of folks…thats telling us that some of the smartest folks on the planet think we are going into recession. I will lighten up my broad SP stuff ( in my IRA- non taxable) in the next couple months. I will keep oil stuff…but I dont expect returns like last year, probably no more than 10%. I own low PE stuff like SQM and will hold that and sell covered calls on some. I will hold my EEM LT but with tight stops.
Why; 1) the fed is essentially telling us they will tank the economy and overpriced assets ( ie- the market) 2) Demand has fallen off a cliff, Ports clearing up- less goods coming in, just about every retailer cutting back on orders, RE, Car sales dropped like a rock, companies laying off, etc
IMO all of this is going to show up quicker in stock prices than the broader economy; which I think explains exactly what has happened to valuations over the last year. That is, all of these recessionary fears have been priced in and prices won't move much if we actually see a mild to moderate recession. But, that's the trillion dollar question. How much has it been priced in. Time will tell.
True, time will tell but how anyone can think the market is perfectly priced into the future is foreign to me. If that were the case, the market would never have a wild swing.
Its all an educated guess...and there is risk involved in every asset class. There is no 100% safe investment.
The folks that had money in bonds for the last couple of years to avoid risk- most bond funds lost money though not nearly as much as the S&P.
The good news is we don't have to be geniuses to see trends that will succeed over a longer time frame.
“In my opinion I would avoid any financial advisor that suggests you invest a heavy amount of your portfolio into a single sector.”
That would depend how much you overall net worth is in the stock market and your time horizon for your investment. And how much you believe in your research, convictions and risk tolerance. Also If the overall markets are dropping the only way to make money is to be heavily invested in sectors that will outperform the market, like oil and gas has done for the last 2 years. Too much diversity in a bear market will get you negative returns. Lots of diversity looks so smart in a bull market, but it’s mindless, just buy an overall index etf.
A great financial advisor or smart investor will still make money in a bear market, above the rate of inflation.
The downturn from Feds rate increases from summer 22 are just now being felt. That lag is going to occur always has.
Still plenty of places and sectors to do well in.
Bh
Horn Hustler, 100 years is one heck of a long lag time? (Edit: I see that you edited your post so now I look like an ass. Lol)
I'm beginning to think Beendare might actually know a thing or two about picking stocks. The SQM stock that he mentioned buying on 1/4/23 is up over 10% since then. Not bad for 7 trading days in which the broader markets only rose about 2%. ;-)
I hope I didn't jinx him.
Matt
A great financial advisor or smart investor will still make money in a bear market, above the rate of inflation.
It’s essentially unheard of for anyone to deliver alpha every year or in every. In efficient markets (and I believe our markets, while not perfect, are largely efficient) everything is essentially a bet, and people may have their rationale as to why their bet is right, but the asset price will reflect all available information so the only thing that will move that price is new info - and there’s no way to tell if that new info will be good or bad. This is the crux of Efficient Market Hypothesis. And the data backs up this fact. Active managers, over the long term, have historically under delivered against passive managers.
So gator, you must just put all of your money in index ETFs that cover the main stock markets and just let it ride out? Why even have a financial advisor?
Grey Ghost must not be too bright for doing what he did, quoted below:
“I piled into the energy ETF called XLE almost 2 years ago. It has propped up the rest of my portfolio.”
Kinda seems like active management to me, especially if he took the money from an S and P 500 ETF? Seems pretty smart too? Is piling in the same as heavily invested in a certain sector?
So gator, you must just put all of your money in index ETFs that cover the main stock markets and just let it ride out? Why even have a financial advisor?
I put my money into a wide range of mutual funds, covering company types (eg, small cap growth stocks, etc), industries (eg, healthcare, real estate, etc), foreign markets (eg, emerging markets), and also index funds (eg, S&P, etc). Every few years I will look at where things are and rebalance my portfolio. As I don’t put much faith in active management and believe in EMH and Modern Portfolio Theory, I don’t use a financial advisor and aim towards a well diversified portfolio.
I have a question for you, Mike. You keep bringing up the performance of the energy sector, particularly oil and gas, over the last year. Your comments make it seem like it was pretty obvious that the sector was going to do well. Can you tell me why it was so obvious that oil and gas was going to do so well?
Oil has has been doing well for years and years depending on your goals. Have some small cap company stock that has been paying outstanding dividends for 30yrs and has never missed one. There was no better time to jump into the energy sector than 2020 depending what your other exposure in the market was.
Take a look at those energy ETFs starting say Feb 2020 to today. Bh
Mike, it's called sector rotation. For the most part, the economy moves in predictable cycles. The idea is to be overweight in strong sectors and underweight in weak sectors, depending on the economic cycle.
Sector specific ETFs have made this type strategy very easy. I own ETFs in every sector, and simply move money around in them as the economic cycles dictate. My energy sector trade 2 years ago was fairly predictable. I didn't expect it to last this long, but I'm happy it has.
It's not always a slam dunk, however. I didn't expect the communications services sector to drop as far as it has. Consequently, I got caught in an overweight position in that sector, and incurred more losses than I should have.
Overall, the sector rotation strategy has served me well. It keeps my brain in the game.
Matt
Jason, I would say that your portfolio is guaranteed to do well in a bull market and always give negative returns in a bear market. Not sure why you would do mutual funds instead of low cost ETF’s though that simply track the main stock markets? Looks like some active management on your part?
My investing advice comes from listening to many wealthy, smart hunters from all kinds of sectors, from technical people to big business owners, to board members of huge pension funds, even some financial advisors and from a variety of investing podcasts. Lots of podcasts while I drive and scout for critters, and I purposely pick ones that I disagree with to challenge my own bias. I thought the S and P 500 was overvalued at 4600, a heavy decline was coming and oil and gas stocks were undervalued. The political nature of anti-oil and gas investment, climate alarmism, mainstream news bias against it told me it was a great place to put your money. Their solid cash flow, high dividends and stock buy backs convinced me. I wish I had done it with way more money! I don’t have much after ridiculous Covid lockdowns crushed my outfitting business. Thanks for asking.
Matt, sounds like you are a smart active investor! Congrats!
Oil has has been doing well for years and years depending on your goals.
I don’t have a chart in front of me, but I’m fairly confident in saying during the last 25 years or so, the broader market (use whatever benchmark you’d like) has outperformed oil and gas in all but a few years. Yes, there’s been a nice bounce in the last two years. But if you look at the 20 year period leading up to that point, the return of the XLE (as a data point) was essentially 0%. For context, the S&P 500 returned about 500% or so over the 20 year period leading up to the COVID related dip. In short, oil has been trash for a long time.
Matt, sounds like you are a smart active investor! Congrats!
Jason, I would say that your portfolio is guaranteed to do well in a bull market and always give negative returns in a bear market.
Possibly, but you feel there are people that can find the bull market and generate a positive return every year then I’ve got some ocean front property in Arizona to sell you :) (I kid I kid). I’m much more comfortable with a diversified portfolio that will balance risk and return.
Not sure why you would do mutual funds instead of low cost ETF’s though that simply track the main stock markets?
I just threw out “mutual funds” as a catch all. Yes, I am in ETFs where I can be.
The political nature of anti-oil and gas investment, climate alarmism, mainstream news bias against it told me it was a great place to put your money.
I’ve been in the business 20 years, and these forces aren’t new. And historically the industry has generated strong cash flows, high dividends, and lots of buybacks. They are primarily value stocks that, as the data has shown, have not generated much in returns for a long time. We’ve benefited a lot from the macro environment the last few years that’s for sure and it’s great to see the rebound from the COVID era lows. What are your sources prognosticating for oil and gas valuations over the next few years?
BEG, you got me curious, so I looked at the XLE 20-year chart. It actually returned roughly 350% between 2003 and it's all-time high in 2014. Then it went on a 6 year slide, reaching the low point in 2020 before the recent run.
Matt
My sources say these anti oil and gas forces are much stronger today than ever in history. Also, I had no idea that oil and gas has always generated strong cash flows, high dividends and lots of buybacks?! I thought it was a boom and bust type of industry with periods of time that it was the last place you would want your money? That you would want to manage when to be in it or not, a sector rotation kind of thing?
As for oil and gas over the short term, less than a year, it could easily go lower but then it will rebound and go much higher, probably into an energy crisis. Way more likely to go higher, over the long term, for oil, gas and mining of metals. I would want to be pretty heavily invested in these areas, hopefully you’ve already bought in at lower prices from a year or two ago and can buy more when the prices drop, hopefully over this year. The idiotic “non-green, not-possible-transition” will be driving these value companies way up over the longer term. Just my two cents.
It actually returned roughly 350% between 2003 and it's all-time high in 2014. Then it went on a 6 year slide, reaching the low point in 2020 before the recent run.
Yup. There have certainly been boom and bust cycles. But that’s kind of the point. You need to time things to do well. Even in the recent run up of energy, you still needed to time things. But essentially if you compare the XLE to say the SPY over any time frame outside of the past six months to a year, the S&P has outperformed. And there was a LONG run where energy stocks returned zero growth when averaged out.
Also, I had no idea that oil and gas has always generated strong cash flows, high dividends and lots of buybacks?!
My company didn’t lower their dividend payment for nearly 80 years (until COVID). Pretty common with most of the industry. And cash flows have historically been strong in the industry, especially operating cash flows. It’s a pretty capital intensive business though. So despite the dividends and buybacks, still needed to pour a lot of money back into the business to maintain the status quo. All historically speaking. It kept valuations pretty flat. Even now with the windfall, most of that money is not going into growth, it’s going back to shareholders so I think there are long term questions about the industry’s ability to deliver cash down the road.
Way more likely to go higher, over the long term, for oil, gas…
The idiotic “non-green, not-possible-transition” will be driving these value companies way up over the longer term
Why do you think it’s going higher? Supply? Demand? Production and investment has been increasing (albeit much more moderated than in the past) and you’ve got people calling for some level of recession. So what forces do you think will push valuations higher? Asking genuinely. I don’t have an opinion one way or the other. I think things are more complex and complicated now than ever, so it’s very hard to even form an opinion as to which way things will go for the industry.
I can vouch for Matt being a smart a...... ctive investor. Lol
Grey Ghost's Link
"Why do you think it’s going higher? "
BEG, I found this recent article interesting. They poled 250 institutional investors on how they see the future of oil and gas.
Matt
That’s a great reference point, Matt. I wonder if BCG will release a new one soon as that one is almost a year old. A LOT has changed in the industry in the last year. Some of the themes in that report are still a high priority, some are much less so. This was all published before the war in Ukraine. In short though, they wanted: more shareholder returns, more capital discipline, less emissions, more energy transition, etc - in short more of everything that are often competing priorities. All this against a backdrop of volatile commodity prices, investor activism, geopolitical challenges, societal pressures to reduce emissions, increasing use of renewables, peak oil demand, recessionary fears, increasing capital costs, etc. Like I said…it’s a wild time and I think there are just as many scenarios that could serve as headwinds to the industry as there are scenarios that provide tailwinds.
Sorry, BEG, I didn't realize the article was a year old. I did look at the date, but I guess I'm still getting used to the new year. In fact, I dated a check for 1/13/
22 today. Ha.
I diid find it interesting that 85% thought natural gas will play a larger role in our energy needs in the near future. And that 66% felt that peak oil demand will occur by 2030. Like you, I wonder if those predictions have changed any over the last year.
Matt
Smart investors took their profits and divested in early 2020. They were some very good investment managers who hit it right on the button. Very very happy we went that route. Paid are taxes. Last two years have been very good for us. Not securing profits looking back now would not have seen market go from DOW 29k to 34k today, without enduring a 11,000 point fallout. Bh
Matt, thanks for the kind words…..yeah I’m feeling pretty full of myself right now. The challenge now for guys in the same boat is what to let run and what to put a tight stop on. I typically cut stuff loose quicker in my IRA ( non tax) and tend to hold for at least a year or more in my taxable accts….with the one caveat- I stop stuff before it looses money. I have not always done that and it cost me dearly.
So for example; I bought TSM in my ira on a couple buys after I mentioned it here and its up about 15%. Now what? They produce 70-80% of the high end chips 5nm and smaller…eps up 78% last yr, great 5 yr outlook but their future eps projections and cap spending are lower. The stock is 40%+ off it high but I ask myself what is fair value?
Country risk, sector risk and a few more negatives….but its still probably worth $100 ($86 today, under 80 last week) its to be expected it will back and fill as its gone up big in the last month. Personally, I am not going to watch the big electronic sellers like Apple for difrection…but I think we have seen the bottom on this. I put in a stop 10% up so no matter what I win. If it drops into the 70’s, I look at it hard again. TMI? Grin
Same with SQM, thatI mentioned to Matt, it looks like their labor issues are over ( maybe, its a banana republic) and it will back and fill but with more wild swings. its riskier than a TSM and its priced accordingly.
Bigeasy is right about one thing….its hard to outperform the indexes but its possible even for an avg guy like myself….I have clients that do it every year. They won’t take your $100k…typically its $10M minimum or more and just from word of mouth these guys are buried.
I don’t really pay attention to buy and hold SP performance…I balance my risk differently. It didn’t bother me one bit to be mostly in cash last year with only a couple sectors- that killed the S&P.
Oil is up, but I wouldn’t expect it to do what it did last year. Buying the oil indexes is OK…but within that index there will be outperformers. Multiple sources ID’d A few…which I bought along with adding to the indexes. I bought CNQ the end of last week. I was comparing it to another low PE and high div oil co. ENQR ( PE 4, 8% div) numbers looked good…but they are plowing a big % in windmills and such- so I passed. More fish in the ocean ….which is the advantage to hand selecting these over indexes. More risk? not if you manage that risk well; stopping them out…selling covered calls or option spreads or just plain watching it with a plan.
Anyway, some random thoughts on my process. If I can help or if you like something, ping me but I hesitate to give picks and then a guy just sits on it. FYI, the stuff I mentioned in my posts I have a strict plan for each.
The Random Walk down WS guys think all of this stuff is priced in, thats hogwash. There is anomolies we can use as individual investors…and its worked for me.
Forgot to mention; we will all be up here in the next month or more.
Then what is our plan? If we hit a recession those gains could turn to losses.
Anyway…IMO now is the time to be developing a plan for your assets. I’m going to try and kill another Coues deer with my recurve to show the first wasnt a fluke!
.
Bigeasy
In your 20 years on the production side of the oil and gas industry how many rigs have you invested in and were they successful and when the price per barrel went below $0 How many barrels did you buy?
How many rigs have I personally invested in with my money? Zero, but I don’t see the relevance. And I don’t trade oil barrels - with my personal money or with my company’s money - so I’ve never bought a barrel of oil at any price.
It's not relevant to anything other than a simple question with an equally simple answer, thanks
Not to hijack the thread, but it peaked my interest. Anyone have a brief summary of their thoughts on investing or not right now and what they consider a good or intriguing option?
Not to hijack the thread, but it peaked my interest. Anyone have a brief summary of their thoughts on investing or not right now and what they consider a good or intriguing option?
I dont profess to have half the knowledge or experience that alot of guys on here have regarding the stock market, or whats coming or where to put funds right now.
I will say this though. There are plenty of decent, good, and better options “on sale” right now, that will eventually go back to where they were closer to their highs. I prefer to get paid while i wait, so i own very few positions that do not pay a decent or better than decent dividend. Some ive had for years, some are recent acquisitions to my portfolio.
As someone above said though, its best to have an idea on a good exit plan. A simple stop loss can take the emotion and thought out of it if its a concern.
I tend to hold and not sell, unless something has changed in company management or financials in the company are going the wrong direction.
Ups and downs occur in the market and are out of most of our control, and that will never go away. If you make good choices going in, in the long run you will be fine.
Kydeer1, all depends on your personal situation. For me, I’m 20 years from needing to tap into any investments. So it’s all a buy for me right now.
I gave my prediction earlier. I think the financial sector will outperform most others in 2023. But I’m just a redneck who retired at 45. ;-)
Matt
RK actually makes a good point to bigeasy, but not about buying actual barrels of oil. My question to bigeasy would be, as someone in the oil industry and as a smart, savvy investor, when a barrel of oil went into negative value in March 2020, did you recognize this as a massive buying opportunity? Did you invest heavily in oil stocks?
(A simple investment, like an energy ETF, XEG went from $8.42 in Feb of 2020 down to $2.65 in March of 2020 to now at $15.63.)
Good example of sectors Mike.
FWIW, the WSJ had a rather obvious article this weekend saying Semiconductors are the new oil that every economy runs on. My bet, this wont be straight up from here- its a huge cap ex intensive industry and they are spending a lot going into a downturn.
For guys who don’t want to do the research; I have been following Dan Niles- danniles.com- for decades since he was the Intel analyst. He has his own fund, Satori fund that was up last year. If I was going to have someone manage my $$$, he would be on the short list. I don’t know his min…He does a short/long strategy that, contrary to what some say here about active mgrs- he made money last year and outperformed.
He is on CNBC a lot and you can search his commentary. If you lost money last year…look at Dan. Unlike the supposed financial advisors that just plug your money in indexes and collect a fee, Niles actively manages and controls your risk.
Disclosure; I dont know or have any money with him…but I follow his comments regularly.
The guy on the short short list managing mine is the fella typing this. Bh
Bruce, the Satori Funds minimum deposit is $500K. And you are correct, Dan Niles is one sharp investor. I always stop what I'm doing to listen to him when he's on CNBC.
Matt
RK actually makes a good point to bigeasy, but not about buying actual barrels of oil. My question to bigeasy would be, as someone in the oil industry and as a smart, savvy investor, when a barrel of oil went into negative value in March 2020, did you recognize this as a massive buying opportunity? Did you invest heavily in oil stocks?
The price of oil going negative was essentially an anomaly. It was related to there being essentially no storage capacity left. Unless you had a massive storage you had no way to capitalize on the negative oil price. One only need to look at the future contracts for out months and also to oil and gas valuations to recognize $0 oil was a temporary anomaly.
And I said it already, the vast majority of my personal financial exposure is tied up in oil and gas. I have more oil and gas stock in my portfolio than anything else. Those aren’t the questions RK asked.
Everybody is an expert in hindsight. If only....
I like buying my stocks on sale, so I generally only buy when there have been several very bloody days in a row on the market that have driven prices way down. Yeah, I know, don't try to catch a falling knife. Thing is, I've generally been pretty successful with this strategy, catching several of the lowest days in the last 5 years. I'm sure I do have some lost opportunity cost by not being more invested in the market for longer periods of time and catching extended performance upswings. I'm re-evaluating some of my strategies. I put a lot of stock in Warren Buffett's investing theories, and there was a time when he was an extreme "value" buyer, but eventually got to a point where he said he'd rather pay a fair price for an excellent business than an excellent price for a fair business. I've never been one to buy stock in what I think is only a "fair" business, but I'm getting to the point where it's a little easier for me to pull the trigger at a fair price for an excellent business. Though I still will only buy on significant down days in the market.
One thing that has always amazed me (and continues to do so) is how most people like to buy everything on sale, except stocks. The average investor wants to buy stocks when they're on an up-swing, and wants to sell them when they're on sale. My thinking is the opposite of that. I do definitely end up holding through some significant drops in the market, but just try to average down in per share price as the price goes down, as long as it's a good company stock and there isn't some specific worrying reason that particular stock or sector is getting bloodied.
So bigeasy did you get the 5 fold increase to your money in the oil and gas sector due to the $0 a barrel anomaly?
No. The sector, on average, isn't up 5x since the $0/bbl anomaly in April 2020. It's up about 2-3x since then. Some higher, some lower.
I don't think the performance of the energy sector since the Covid crash has been driven by the brief moment in time that oil went below $0/barrel.
Matt
Perhaps my math isn’t as good as bigeasy or my understanding of what drove up the energy sector like Grey ghost but:
A simple investment, like an ETF that tracks the energy portion of the S and P 500, XEG, went from $8.42 in Feb of 2020 down to $2.65 in March of 2020 to now at $15.63.
Did either of you catch the 2-3 times increase at least?
My dad retired from Caterpillar and when he passed in 2011, he left us kids some CAT stock. My siblings sold it and rolled into their IRA mutual funds but I decided to just keep my shares in CAT. Glad I did. :-)
Mike, I guess I don't understand the point you’re trying to make. Energy sector stocks hit a low point on 3/16/20. The sudden crash in oil prices to below $0 happened over a month later on 4/20/20, and it didn’t have any affect on energy stock prices which were already rising by that time. So, it’s not like below $0 oil was an obvious signal that energy stocks were going to go on a 2 year bull run. At least not for me.
For me, the light went on when oil went over $100/barrel and gas went over $4/gal, with no significant drop in demand. That was my signal to pile into an energy sector ETF about a year ago. I didn't realize the full gains from the low point in 2020, but I'm up 76% on what I did buy. And as I said earlier, that overweight position prevented my overall portfolio from suffering loses similar to what the S&P did last year. I wish I would have bought more, but hindsight is always 20/20.
How about you? When did you conclude the energy sector was going to have this amazing run, and when did you invest in it?
Matt
Satori is a hedge fund, correct?
Did either of you catch the 2-3 times increase at least?
For the part of my energy portfolio that I invested in around that time, yes, it did. I already had energy investments at a higher cost basis, so they didn't see the same rise.
But pretty much every industry recovered 2-3x from their COVID lows, until the Fed became hawkish anyway so it's not like energy was really anything special relative to the market when talking about the COVID recovery. It's only for the last year or so that it really outperformed the broader market.
Satori is a hedge fund, correct?
Yes.
I think Mike’s point is; There is a lot of talk, but did you walk the walk?
In my system- I’m rarely early and I miss some of that early up move, thus I did good last year but not great- the index stuff dragged me down. I only got 35% from the 65% up in energy- I was admittedly late.
I bought some semi stuff recently- late again…. But I think those might test their lows again in the summer or fall if there is a recession. It’s a very high cap ex industry- profit can go away quickly- just ask Intel grin
I think Mike’s point is; There is a lot of talk, but did you walk the walk?
I’ve made no bones about my strategy. I am a long term investor, I believe timing the market is ridiculously difficult, I believe in Efficient Market Hypothesis and Modern Portfolio Theory - therefore I build a diversified portfolio and take a relatively passive approach to investing. Mike seems to think that it was a no brainer that energy was going to go on an amazing run. So we’re keen to understand how he played it. You know, did he walk the talk? Furthermore, where does he think the winners are this year?
My point is that maybe you two aren’t so smart after all.
Maybe you should try a bit more humility and respect for your fellow bowsite members even when they can’t give some technical analysis or use phrases like Efficient Market Hypothesis. It’s such an intellectual high horse you always ride on with a “I’m smarter than all of you peons”, attitude.
You bigeasy are an expert in the oil industry for the last 20 years right? And you missed a 5 time gain in energy stocks, not 2 or 3 times. 5 times! The S and P 500 had a less than 2x gain from the Covid lows to now so No it was a very special increase in YOUR AREA OF EXPERTISE. ’And both of you say that $0 oil wasn’t a signal that the industry wasn’t going to have a massive increase?! That timing that play was ridiculously difficult?! Really? You two can’t even admit when you totally missed a golden opportunity.
Matt says he piled into oil stocks when oil hit $100 and mainstream news told him to do it. There’s a lot of space between $0 and $100! I would say he took a big risk, it could have easily been too late, he got lucky. These huge boom and bust and then growth opportunities don’t come along often but there is no reason you can’t capitalize on them when they do with timing the market and heavily investing, or divesting in one sector. Or even dumping a whole index like the S and P 500 after a 20+ year bull run. Smart investors really proved it by making a lot of money right after the 2009 financial crisis and again right after the Covid crisis and they usually weren’t the technical analysts, trying to prove how smart they are.
On a separate note…does anyone follow Tyson foods? TSN This could be a big turn around play. They are moving there stuff to Arkansas, improving their processing plants. They are losing some LT employees, which could actually be a good thing if they are aggressive in their turn around.
Chicken is essentially a commodity, but they are trying to brand it, even though it looks to be a pretty weak branding effort.
If someone follows it, please ping me in a PM.
So, Mike, when did you invest in this "golden opportunity", and what were your signals to do so? And, what are your investment picks for 2023?
Matt
’And both of you say that $0 oil wasn’t a signal that the industry wasn’t going to have a massive increase?! That timing that play was ridiculously difficult?! Really? You two can’t even admit when you totally missed a golden opportunity.
You seem to not understand how equities are priced, how oil companies are priced, and how oil prices are factored into the equation. Again, you understand that oil company valuations did not go to zero despite oil prices going to zero, right? In fact, if you look at their valuations, I believe the implied price premise on a go forward basis at the time was somewhere around $30-40/bbl. In other words, there was actually already upside priced into oil companies based on the short term future prices even when oil was at $0.
And again, you keep saying I "missed" the low. It all depends on what your definition of "missed" is. I have plenty of oil stock that was purchased during the COVID lows of March 2020. Did I move all of my personal wealth into oil stocks in March 2020? No. That would be the height of stupidity IMO. I'm employed by an oil company and already have plenty of financial exposure to the highs and lows of the industry. Also, the valuations have been driven by some pretty incredible circumstances that not a lot of people were predicting - namely, the shift to capital discipline and sacrificing growth (particularly from the US shale patch) plus the war in Ukraine. As mentioned, I'm a believer in having a diversified portfolio that hedges risk to any one industry and I believe timing the market is essentially a crap shoot. And no, I'm not trying to make anyone feel dumb - on the contrary, it's about pointing out that there is fairly well established theory around this approach (theory that has won Nobel prizes for its biggest advocates). As someone who has proclaimed they listen to a lot of podcasts on these things, they shouldn't be unfamiliar to you.
To further the concepts, these attached charts were shown when I was in grad school during an investments class where we talked about things like Modern Portfolio Theory. The point of the chart was to show the amount of variation in asset class and sectors when looking at historical returns. None of them are always winners. None of them are always losers. Their order in terms of returns are all over the board. To further the discussion on a "go-forward" basis, if all signs point to a strong result in a particular industry, how do you know whether or not that upside has been priced in? All of this led me to be a big proponent of having a well diversified portfolio that balances risk and return. I'm sure there are people who generate higher returns in their portfolio than me - I guarantee there are people that have lost more more than me. In fact, on the second chart, the Asset Allocation Portfolio probably replicates both my approach as well as the returns I've seen (both relative to other assets as well as from an actual return perspective).
So, back to Grey Ghost's question, Mike. Since you keep suggesting that it's easy to pick winners and time the market, what are going to be the best performing sectors and asset classes in 2023?
I'm enjoying this thread....I don't see any bragging going on, just sharing ideas and concepts. That said, as GG well knows I play my own game, developing my own edge. My opinion is there is no one method that fits all. A lot depends on your personality and interest. Passive works...so can aggressive.
GG is very much a traditional fundamentalist btw...he has been quite successful at it.
Beendare seems to have blended Ta and fundamental analysis very successfully.
I mostly just follow trends and patterns... have little interest in fundamental analysis or valuation.
Hope you guys carry on with this, maybe time for a new 2023 thread?
Different strokes and all. It's a very fascinating field of study to me.
I see no reason to be negative regarding someone else's thoughts. I'm not competing with others, only myself
Well said, Dan.
Someday you need to teach me that voodoo that you do. The charts you've sent to me in the past looked like hieroglyphics to me. ;-)
Matt
I lived through the 70’s…. A lost decade for the stock market.
I’m not smart enough to know what is going to happen, long-term.
I do think there is a danger to the groupthink of buy and hold, Its why I use sectors and rotating in and out of the market to control my risk.
I don’t catch every move up, but then I don’t get slaughtered on the way down either.
The modern portfolio group think uses diversification and long term hold as risk management. Color me skeptical when everyone is saying, the same thing .
I think there is a similarity here to 1970’s inflation- a list decade- which is a risk to that strategy and its worth evaluating for yourself.
I'm going to play devils advocate on Tyson Foods for a moment. Why would a company be showing buy signals on a TA chart when their earnings are projected to drop 26% this year?
Matt
Hey bluedog, curious what your technical analysis says about some of the tech stocks that have sold off recently? Thinking of names like Tesla, Apple, Meta, etc. Seems like their stock trends would look pretty similar to Tyson's, at least over the last year or so.
Again....everybody is an expert *in hindsight*. Don't be that guy. If you're going to be, can you please tell me what interest rates are going to do in the next 6-12 months? k thx.
I see no one claiming to be an expert. Think we're all amateurs here.
Regarding interest rates in next year..... i suspect they've about reached their high. Expect light to moderate lightening. I think the feds are walking a tight line, doing as good a job as they can. Trying to moderate inflation without killing the economy seems a difficult procedure to me. Notice I DID NOT tell you what interest rates are going to do..... just what I expect and I could be totally wrong.
Matt's Link
"I do think there is a danger to the groupthink of buy and hold..."
What danger is that, other than it not being adequately contrarian? ;-)
Like I indicated above, if one looks at the S&P's long-term performance, I think that it would be tough to claim that a buy and hold strategy with a well-diversified portfolio is "dangerous". From where I stand, I would think a strategy that relies on active trading and accurately timing markets would carry greater risk.
Over the last 30 years, the inflation adjusted average annual return of the S&P is around 7%. Not too bad. But, there have been decades when the S&P was actually negative. In 2000-2010 for example, investing in the S&P index would have returned a 1.29%
loss. Some analysts think we are headed for another of those bear market decades right now. That's when the passive buy and hold strategy doesn't work too well.
Matt
Big layoffs this week. Fuel is up.
TSM buy last Oct is looking really promising. May purchase some more. Same as the PARA buy last year.
TSCM is going to do well. Take some time to build here but they will do 2-3 Nano here. Which means if China goes forward with aggression threat by 2027. These two new plants in Az will keep producing. With CHIPs act the Government is on hook to get Semi’s built here.
Bh
"But, there have been decades when the S&P was actually negative. In 2000-2010 for example, investing in the S&P index would have returned a 1.29% loss. "
The 11-year decade you reference above both began and ended in recession (and ended during the deepest recession in our lifetimes), which somewhat reflects the folly I referenced above of trying to assess investments over relatively short time periods.
When people are investing for retirement, they are looking at a 30-40 year time horizon between when they start investing for retirement and when they actually retire/need to start drawing funds. The 7% rate of return you referenced is more normalized/representative of that sort of timeframe than what may have happened in a given 11-year period in the middle of that. Further, people don't draw down their retirement in a lump sum the day they retire but rather in dribs and drabs over 20-30 years. With that, the same sort of normalization occurs (some will be drawn down in bad markets and some in good, so there is an averaging of sorts over time).
But if you mis-timed the market during 2000-2010, you could have missed out on the ~5-year run where the S&P 500 was up 90% (9/02-10/07).
Matt, I get what your saying, but my wife and I had a different plan than working and saving for 30-40 years. We wanted to retire comfortably before we were too old to enjoy it. 7% annual returns on our investments wasn’t going to accomplish that, so that’s when I took a different approach. Perhaps we got lucky, but our retirement account outperformed the S&P by a significant amount every year. That allowed us to accomplish our retirement goals. YMMV
Matt
For most people DCA the S&P. SPY
I personally think the markets are going down a lit more. I am shorting a lot. I also sell options on stocks I own a lot.
I short the meme stocks on all spikes. BBBY, AMC, APE, GME, BB, APRN, CVNA. I am 55% short, 5% long all high dividend stocks, 10% commodities the rest cash. The past 4 years I have spent 3-5 hours a day studying the economy and stocks.
I strongly believe DCA long term. I also strongly feel everyone long in the market is going to getvhurt this year.
One thing I like about the market...it's ok to change your mind
I got in house just now and took a closer look at Tyson stock. TSN , for me, is trending towards a possible buy but currently not there for me.
Possible Ghost's pessimism is well founded. Time will tell I reckon.
I'm referring to those who look back at past performance and make like people should have known easily in advance what the market was going to do. Price of oil, price of corn, etc.
ahh, I agree, Monday morning quarterbacking is easy.
YTD in trades @ 146%. Yesterday was not a great day but was still able to do some damage. Again, Im not bundling things up for the future. If I can make some $ right now that's what I do. Don't need money for future as that's been taken care of long time ago. Bh
"YTD in trades @ 146%."
Of course they are, Shawn. We'd expect nothing less from you. Care to share with the class what trades produced those YTD gains?
Matt
Care to share with the class what trades produced those gains last year?
Must've cashed in on that $200/bbl oil bet!
^^^LOL! You beat me to it, Gator. For a guy who was so far off on that prediction, he sure seems to have an uncanny knack for predicting and timing the rest of the market. Perhaps he will share what his crystal ball is saying for 2023.
Matt
CBG, BBB,Inc, NVDA, AA Just a few. Erypto is a deal after MINI Madoff scared folks off the bean. Was a great buy and will buy some more. Going to buy back into Bitcoin family as I think I can beat my 21 sale profit of what I had in it at 1/10 the cost in todays $.
Not in it for the long game. No im not shorting anything. Long as GVT does not default of some $ I put in T Bills with Itll be another great year. Let the Trust Attorney figger up what I owe Uncle Sugar in April. Bh
What is CBG and BBB? I can't find those tickers, Shawn. And "Inc" comes up as a high yield bond ETF that's only 2 months old. And I'm guessing you meant Crypto not "Erypto".
Matt
CBG, BBB,Inc, NVDA, AA
CBG: 1 year return: -8%; YTD return: 7% BBB: 1 year return: -71%; YTD return: 75% NVDA: 1 year return: -33%; YTD return: 22% AA: 1 year return: -8%; YTD return: 24%
Color me skeptical that you perfectly timed the bottom which was essentially a few weeks ago or that your portfolio is up 146% trading those stocks. Just sayin...
BEG, he probably deleted all the negative signs and then added up all the numbers to get 146.
Maybe HH just forgot a decimal point and meant 14.6% instead of 146% ....
BEG, will you interpret Shawn's post for me? What is CBG and Inc? And I'm assuming "BBB" is Bed Bath and Beyond (BBBY)?
Matt
Those are not tickers all. Specially the negative ones
They were not timed. Just common sense , world events, and supply markets factors.
ElCryoto was easy after Mini Madoff! Clear buy, jingle in the pocket. Cant lose on that in short term. With Gvts the world over using it to pay digital ransoms. Until USA opens its digital central bank it is a easy pick. Sold it before for Record Profit why give up on it.
Metals , another easy pick. Look at commodities track. With the Russians bogged down, Joe adding Obama’s EPA Regs back on in USA and Fuel Trans cost. I figgered be a great time on a great company and it worked out well. In fact, so far today im killin it. Will it last the Summer out, Who knows? if it dont i take the $ and send it down the road.
Plenty of good short term deals out there. Not all work out.
My exposure to the current down turn does not bother me in least. Sold every asset i had save some very old Oil and Energy stocks in Jan 20. Jumped back April 20 and in with a much heavier exposure today. Timing most times will get ya. Just hit the cut right one time and its all jingle. Own zero funds (group of 20 or more stocks). I own my Fund, i built. Meets my goals
Bh
Bigeasy and Grey Ghost, I I got an 3x investment on 50% of my portfolio by simply buying XEG energy etf in late 2020. I wanted to buy it in March and April of 2020 when it was an obvious choice, dropping from $8 in Feb 2020 down to $2.95 in March 2020 and oil going to $0 in April. XEG now sits at $15.74. (That’s the 5X gain both of you missed out on.) I sold XEG and immediately bought the largest dividend paying oil and gas stocks like CNQ, SU, ENB and plan to just hold them for awhile. I missed the 5X gain but I’m not an oil industry guru and don’t understand how oil equities are priced and I don’t have any fancy charts.
Where oil will go from now? I have no idea, I never said I did. I said it was during boom and bust and then growth cycles when you can invest heavily in one sector and make lots of money. Let’s say like real estate in 2010.
" I wanted to buy it in March and April of 2020 when it was an obvious choice..."
So, why didn't you, if it was so obvious?
Because my portfolio had been liquidated into emergency cash in case I had to pour it into my outfitting business.
Once my bank assured me they weren’t going to call my operating loans and were actually offering more loans I bought back into stocks. My other 50% went into gold mining stocks that have all held their value, zero losses. I can sell them all and buy other dividend paying mining metal mining stocks or keep them.
I’m sure your balanced, genius portfolio has lost money?
Where oil will go from now? I have no idea, I never said I did. I said it was during boom and bust and then growth cycles when you can invest heavily in one sector and make lots of money
So where are we now in terms of the boom or bust cycle? More upside or downside? You seem to suggest it's easy to identify these cycles. I mean look at the chart I posted - energy underperformed the S&P in 8 out of 9 years prior to 2020. This included booms and busts in oil price (see 2014/2015). Why were you so certain energy was going to outperform during a period where we had demand falling off a cliff, had incredible supply surpluses, and ultimately had a Democrat elected into the White House?
I’m sure your balanced, genius portfolio has lost money?
Over what time frame?
When sanity is placed back in WH.
A bloodletting out there today. See what gives at 1000est tomorrow.
Bh
So Mike, are you going to stay 50% in oil and gas for 2023? Or, what is your crystal ball telling you to do going forward?
Btw, sorry you have to take on debt to keep your business running.
Matt
I think going forward is now difficult to predict. The main part of the boom, bust and growth stage is over. Opportunities were missed, including by me. I lean towards a bull run or at least solid dividend returns, on commodities, oil, gas and precious metals for the next several years. But who knows, a smart technical investor could make money on tech stocks now, picking the right companies? Or a balanced portfolio with a 60/40 stocks and bonds split could be perfect? Beats me?
Grey Ghost, thanks for the kind comment on having to go all cash at a not good time. The good part was that it got me out of the S and P 500 etf, and other ETF’s and bonds and made me really analyze what to do next to try to make up the losses. Oil and gas and even gold did it.
Here’s some good podcasts, they give hours and hours of excellent information where you don’t have to sit and read it. Driving, walking the dog, working out or even sitting in a tree stand with just one ear bud in are great ways to get the info. The millennial investor one has a YouTube channel too if you want to sit and watch, see charts and it’s certainly not just for millennials. They can all be set to 1 1/2 listening speed or skipped ahead or back. Hope they help.
I think going forward is now difficult to predict.
I agree with you there. That's always the case, IMO.
The main part of the boom, bust and growth stage is over
What does that mean? I don't understand what the "main part" is referencing? Are you saying oil prices will be stable for awhile? Are you saying valuations will be unchanged for awhile? Oil is cyclical, and you basically just said every stage of the cycle is over - so where does that leave us?
Well, it appears investors weren't thrilled with yesterday's retail sales reports. Microsoft announcing they are laying off 10, 000 employees didn't help either. Over half of the YTD S&P gains are gone in just 2 days. I'm trying to remain optimistic, but I'm bracing to be disappointed. I wish I was better at shorting the market, but I hate trying to pick losers.
I guess I'll stay overweight in cash and ride it out for a while longer. AA and BBBY...ouch!!
Matt
For about the 100th time bigeasy, when oil was at $0 it wasn’t hard to predict that it was going to go up, along with oil stocks, and it did.
XEG went quickly from $8 down to $3. I thought it going back up was an easy call, so I invested in it. I was correct.
I’m not seeing those huge moves now so it’s become much more difficult to predict. I’m sorry if this is too complicated for you. Good luck with your investing.
when oil was at $0 it wasn’t hard to predict that it was going to go up, along with oil stocks, and it did
I'll disagree. For the 100th time, you realize oil stocks were still priced at a price assumption of around $30-40/bbl even when oil was trading at $0/bbl. In other words, of course the spot price of oil was going up - the next months contracts were trading in the $30s from what I remember and things were about to roll over - but there certainly wasn't a guarantee equities were going up (that oil price upside was already priced in). As GG has pointed out, none of that really features into the reasons energy has outperformed the broader market recently. Sounds like bought something not fully understanding how it was priced and you got lucky more than anything - which is always a big part of investing! Best of luck as well - and I encourage you to diversify your investments.
I did have a diversified investments from 2009 to 2020. I was 60% ETF stocks and 40% bonds. I more than doubled my money. I felt that model was broken in 2020 so I invested differently. Thank goodness I did! I encourage you to not diversify your investments so much and maybe you’ll make some money. Have a listen to the millennial investor podcast #248. Good luck!
I don't know about taking investing advice from a group called "Millennial Investor". Wasn't it millennial investors who were primarily responsible for the meme stock fiascos like GameStop and AMC?
Matt
And far more gullible people lost money and were forever tainted on investing in the stock markets, again.
Matt
Sold early today. Glad i did.
Lets see what peeks an interest. AA made a tidy sum in 4 wks. No sense in taking it in the shorts. last gew days not many been spared. When most your expose is at the DOW 18k level its not wearing a hole. Bh
The best thing that came out of the whole GameStop fiasco was a bunch of young video gamers learned there is more to investing than reading memes on Reddit.
Matt
How so, Orion? Can you be specific?
Plenty good deals out there. What puzzles me is: You got El Crypto makin a killun in last few weeks and you have others going belly up?
Coinbase had one of it regions just tap out?
Once the USDCB gets a foothold i really wonder if Crypto will fold or go Apey? One thing i do know is the middle man will get screwd ie; Banks.
Bh
IMO, the single thing that made crypto an instant phenomenon was blockchain technology, and the fact that it was unregulated. Now, the central banks are all about using blockchain, while regulating crypto, which will cause crypto to fade away. That's why crypto has always been a poor long term investment to me. I wish I had the foresight to see the potential early on, but I wouldn't touch crypto with a 10 foot pole now.
Matt
Orion, then explain what you are referring to. I followed the whole GameStop fiasco with great interest. I even made some money off of it. But I don't see how it exposed "how crooked wall street and the stock market all is." Enlighten me, please.
Matt
Melvin capital and robinhood were simply players in the game. They both got exposed. Meanwhile the markets quickly ignored them and went back to business as usual.
Matt
I love this thread. Lots of different strategies to conquer the future. Lots of fortunes lost by over thinking Realities.
Keep it up !!
Enjoy listening to the long haul strategies when your already in 70’s . Just read a good paper on just that. Most dont realize mortality is just around the corner. At 75 you got about 5-7yrs left for most of males in US . Some will be gone much earlier.
So, unless you wanna go out in a last two three year blast off. Thats cool. Just lotta folks just dont realize whats waiting.
Cuts both ways i reckon, cuz at 60 you got around 20 years on average for your $ to make Some coin for yourself but you got to figger in a period of time to use it. Bh
Horn Hustler...... Good post. Some think they're going to live forever, they're not.
Go figure? Hell, i did not think death was possible until Panama Invasion in 89. The Bell tolls for us all in the end.
Took care my grandkids. With that done. Theres no long haul in my plan.
Bh
I learned about mortality back in 67 and 68. Kinda been hearings that bell forever. No long haul plans here. Especially now at 75.... 76 in May if I make it.
"It tolls for thee"
I’m going to keep my oil stuff but I don’t expect anything close to another year like last year. Im selling my SP index stuff and will be out of the low pe chip stuff I have in a few weeks. Some taxable ETF stuff I will keep just so I dont pay the tax bill. I’m going to lock in the gains that I have for the year in my non-taxable accounts.
I will most likely be 40% oil and the rest in short term bonds for much of the year.
If I can ekk out 20% this year I will be happy…..someone did 146%- wow
S&P earnings estimates dropping….( I think analysts are always late to the party going both ways)
MSFT earnings soft, the CEO even says “ 2 yrs” Cloud stuff soft. Enterprise software tanking. Rails reporting poor results. Then add a Dem admin that hates business and cant find their Ass with both hands….
Like I said earlier, Im ok with being out of that type of mkt environment to manage risk.
“someone did 146%- wow”
Someone *said* they did 146%. There is a difference. ;-)
Picked up some more low volume Oil myself. Joe will get price back up to get us into an EV. Unless it tanks hard it will not be hard to come close to last year. 1099 Div are coming in now. Im liking it. TSM is killing it. Figgered that would really Pop last year with Chynah wanting to take Taiwan back. Think Im goona take another few hunnerd shares.
Bh
Tesla earnings were slightly better than expected, and of course it's up over 8% in pre-market. That will probably prop up the Nasdaq today.
Beendare's SQM call continues to roll.
I'm going to buy some YINN, based on conversations with a friend who I respect. With China re-opening, their people have a record amount of savings built up and burning a hole in their pockets, just like the US population did in 2021. The triple leveraged ETFs scare me a little, so I'm buying conservatively, but the payout could be big.
Matt
Set you trigger light to sell that stuff whin Chynah jumps on Taiwan or youll be screwd.
Was reading a gud paper from Heritage on what is likely to happen to the world economy when Chynah moves. Ugly stuff. 1st whiff i dumped it all like Covid.
Bh
Did job in AFG for a group in a tight spot. Was a 5k job. Guy paid me out in Khar with Bit’s. I was pissed. Little did i know how well that turned out 12-13yrs later. I am open to BC Diamond or cash.?
Bh
TSLA jumps. Yeah, I don't get it. ...folks still living in the past.
Its a car company for gods sake, in a highly Cap ex intensive industry. This should be valued at about 15x-20x- and thats probably generous. Its at 50x now.
IMO, thats gambling not investing. Same for Crypto. How do you value it? What is a Bitcoin worth? Buy and hope is not a strategy. At least with a company you can value it through its assets and market opportunity. Even the staples have some pretty high valuations right now. Is Coke worth 27x earnings? Is Procter and gamble worth 25x? I don't think so.....
The last 15 years was a free for all with cheap money, growth at any cost. The high flyers with negative earnings ....or very high valuations have to pay the piper at some point.
I wish I had the gonads to short the Cathy Woods ETF's.
The refinery stocks are making me a lot closer to retirement.
I couldn't agree more, Beendare.
Matt
Whatever bitcoin was it did me right. When it went stupid in 21 i took the $. If i held it it is worth 1/3. Cant make a profit unless you take it until then its just digits on a screen. Got three or four im looking to pull trigger on, good valuations and Divs that have been solid. Like to see markets move one way or other before i squeeze.
If i see markets start to dip im going take some more profits and pickup a few of those.
Bh
What are your “three or four” you’re waiting on, Shawn? Give us actual company names, or ticker symbols please. If we all invest on your brilliant foresight, we all win, right?
Matt
You just keep rolling for the Long Haul. I gave you some good tip before. You took em i'm sure. Several of them are still over 80% pure profit even after Joe wrecked the economy. Alas, yer to smart. You in it til yer dead.... (long haul) then, the GVT will get 30some % and yer blue state another 11 or 12%. Here's an idea; the long haulers never get. . . . . You cant use it if your Tango Uniform.
Bh
When I was working, I did all my own research and investing and did so-so, some years I did great others not so good. Before I retired, I got in touch with "SDHNTR(home)" (Nate Treadwell) and turned all my savings and 401K over to him. Best thing I ever did, he has met my every expectation and performed above what he told me to expect, also a great guy to deal with. Plus, he is a Bowhunter so we can get talking about fun stuff at times instead of all busness.
Rock, I agree with you. I think the vast majority of us would do better and sleep better if we turned over our investments to a REPUTABLE manager. They have a vast amount of data, programs, and time to do what many of us think we can do, but in reality, we get lucky, or un lucky. I turned over my investment accounts 30 years ago and the results have been very good. I’m often asked, “what does he charge.” My answer surprises people. I dont know what he charges. I look at my “net” and am very pleased with the net result.
Can someone recommend a decoder ring so we can interpret the nonsensical gibberish posted by Shawn Maygar?
Get outta the Blue MT’s and it will become clear.
Bh
Maybe I need to drink more before reading his posts.
My last update on my moves….. but In case you followed my earlier buy semi advice, I owe everyone an update; I’m selling my chip stuff and taking ST profits QCOM, TSM, NXPI. (Edit; sold Qcom only, letting the others ride)
The news; No surprise Intel eps was horrible. Qcom ( next week) will have good results but poor guidance going forward. Cell phone sales off big. We will get a good buy in opportunity on semis later in the year. Sure semis are important…but demand is dropping like a rock at record rates.
This from CNBC yesterday; A total of 1.21 billion smartphones were shipped in 2022, which represents the lowest annual shipment total since 2013 “due to significantly dampened consumer demand, inflation, and economic uncertainties,” IDC said. Apple maintained its position as the number one smartphone maker in the world. The U.S. tech giant shipped 72.3 million iPhones in the fourth quarter, down 14.9% year on year, IDC said. Samsung, the second-largest smartphone player, saw shipments decline 15.6% year on year to 58.2 million units. —— FWIW, If you buy the Semi ETF….you get dogs like intc and a lot of exposure to over valued companies. If China takes over Taiwan, companies like AMD and Nvidia will go under- know the risk going in. With the totally bought and paid for Biden in Chinas back pocket, risk is very high.
You may wanna read the brief from Heritage on Taiwan and global economy if it goes down!!! Apple get hammered to, what they a 90 billion a quarter company. Nothing will be spared. There be some who'll ride them out til they sink in the Taiwan straight. How long you think you got when yer 60yrs and over to wait for it to come back? When GVT ponies up billions to bring Semi C here, Do you think it was just an accident? CHIPS Act? They best assessment is they are going to try and capture Taiwan and blow their SC facilities all the chit right from the Giddy Up.
Smart to take it while its in Black. Why ride out losses when you don't have too. Saw folks crying, literally crying over 2020 fall out. Was no need. Same folks will ride out the Funds and ETF's into the dirt if this Market terds out. Hope it does not.
Bh
Lots of media claims and generic advice out there that passive investing is superior, buy and hold stay the course, etc etc. Yes, there are a lot of supposed financial planners that are essentially just sales guys- all using the same tired strategy. Sorry, I know a few of you guys are planners and this may not apply to you, but its true for the majority.
All of you that lost money in your accounts last year have heard the excuses.
Take a look at this…….This from Forbes;
Citadel surged past Ray Dalio’s Bridgewater to the top of the all-time list despite Bridgewater’s estimated $6.2 billion in net gains in 2022. Citadel’s flagship multi-strategy Wellington fund returned 38.1% last year, shining during a year when equity markets crashed, and LCH estimates the firm finished 2022 with $62.3 billion in assets under management after posting the largest single-year profit by any hedge fund on record.
“It even surpasses [John] Paulson’s 2007 gain, which has been described as ‘the greatest trade ever,’” says Rick Sopher, chairman of LCH Investments and CEO of Edmond de Rothschild Capital Holdings, in a press release. “Their progress up the rankings in the past few years has been remarkable.” [ Lucky- ugh no!] The stellar year for Citadel’s flagship fund followed a 26% return in 2021 and decades of strong performance–$1 million invested in Wellington at inception in 1990 would be worth $328 million today, compared with $23 million if it were invested in the S&P 500 Index.
Minimum investment amount for the Citadel Wellington hedge fund is
$10 million
Wow!
I’m just tossing it out there.
There are good and bad strategies ….but much of what goes as “financial planning” is simply group think. Look what group thinks money did in the 1970’s inflationary time frame.
On the flip side, Many HF’s and Money managers underperform…..I think it was Tiger Global that lost 54% of their clients $$ last year-ouch.
The point is, there are strategies that out perform…or are simply less volatile, less risky. Its up to us to do our homework.
.
GG - sounds like you’ve got a decision to make. Where will you put the rest of your money after you make that initial “minimum investment”? ;-)
Wild week. What’s driving this oil dip? Banks? Alaska news?
Threw a nice jag, for me anyway, into a time deposit account last month. First time in my adult life that sounded like a solid move. Rolls over every 90 days with current interest rate. 4.25 for now. Sounded like it was going to continue up for a while until the meetings last week and bank fallout now. Also openend a SEP ira as I needed something more than the Roth and wanted the tax offset. Heavy in stocks/etfs for both. Still in the green vs contributions but getting cold feet finally. Starting to think it might be time to sit it out for a bit?
Took some profits last week. Took the $ and ran. Will be just under long term capital gains tax limit. Should not push me out of my tax bracket for 23.
Looking to buy now at fire sale prices. Got 62 week highs on what sold. Avg 38%.
Prudent after last few days. Looking more like Powell will try and save Wall St but lil guy gonna get beat up pretty hard.
Not interested in this lashing going on. Cant print 80 billion dollars a month for 12 yrs then spend it without market disfunction occurring.
Jj
Got 62 week highs on what sold
Shawn apparently making the perfect stock picks and timing the market once again haha
Air stock.
Lost some $ like everyone in last few days.
52 week highs on a product that had done well. No brainer to sell it. 38% cleared. Long term capital gains not going to hurt me to bad next April either.
Dumped half the $ into a QComputing tech firm. Glad i did. Good buy, decent sheet and dividend.
Easy to see what was going happen with bond yields dropping like a stone last ten days. Banks going TU was ancillary to my decision.
Again, i have two fully funded retirements. So, my retirement is taken cate of. Remember some retirement funds you can not use in an IRA. Seems wrong to me but thats the way it is.
Sometimes you hit the cut or your going to have to sweat it out. Was not going wait it out. Bird in the hand.
Jj
Air stock.
What's "Air stock?"
Kinda interesting to revisit some of the stocks and industries that were brought up as part of this thread. On a YTD basis (which is essentially when this thread started), we have:
NASDAQ +12% DJIA -4% S&P500 +3% WTI (Oil price) -16% (XOM -7%, CVX -12%) XLF (Finance sector ETF) -8% SQM -9%
Those of you that had "tech" or "balanced portfolio" are probably in a better place than those that picked "oil" or "finance" this year.
Pick one, then look who was at 52 week highs. Not hard to find them.
I had said “ if your selling your Apple with 90 billion quarterly's you probably made a big mistake”.
I bought some mineral, new upstart material and industrial stocks last fall. Doing very well. one is outstanding, all are used in core based materials for the two basic type EV battery production.
At what im in with Petroleum based products, low volume guys and blue chip oil. Have zero worries. At what im in it at over 40yrs with some its negligible with this correction currently. One them with 2000employees has been paying a great dividend for 25yrs.
Lotta profit taking in last two weeks. Probably a prudent move. Heck, i may buy back same Air Stock and 2/3 what it just sold as they has an excellent future performance ratings in near term future.
I think this Q Computing firm will pan out as well. First folks to conquer Quatum computing will change everything we know in digitworld. It will make our current tech look like Grandma Walton walking two miles to use phone at the general store to make a call.
Not investing for retirement. Making $ to enjoy it. Now.
Jj
Bigeasy, after a failure of three banks, and a massive bailout by the federal government a simple, mellow YTD look at this crisis, snap shot in time is ridiculous to say the least.
Quantitative Easing, aka Money Printing has begun once again, propping up the stock market and making the Inflation fight impossible. They can’t go higher on interest rates now! They/we are truly screwed, Canada too.
The $9 trillion dollar fed balance sheet that was slowly shrinking is going to explode up in size now. They’ve literally taken on responsibility for all $17 trillion in bank deposits in the USA with the precedent of the bailout of Silicon Valley Bank and all of their deposits. The moral hazard they’ve created is unbelievable.
There is no going back, no way to shrink the balance sheet, no way to raise interest rates to fight inflation. If you think a balanced portfolio in US stocks in going to save you, good luck! Historic change is coming fast.
The off ramp to US Digital Currency. Would cut banks considerably out of the equation. The big original banks when Fed was created would scream to high heaven. Digital US currency would keep $ in coffers for longer periods in my view. Also, it could be subject to oversight before release for disbursement.
Last thing Joe want is markets to crash out hard. About all he has in the black at this point. Powell is in a tight spot. Pump fake $ back into circulation right on top of burning $ at rate 90 billion/ mo. QT
I see Powell leaving rates untouched next week or 25 basis pt rise. So, your either going to fair in market and get screwd buying goods and services at inflated prices or raise rates and watch more banks with upside down sheets start dropping. Joe and Yellen should have let Silicon get sold off at .75/1.00$. I told my partner “ i would be glad if i was exposed large in Silicon and was made whole by FDIC cuz later in this Joe Depression you may be left holding the bag”. Yes, agree horrible precedent set now.
Jj
Came across your post from last year, and it's interesting to see the twists and turns the market took. Props to you for making the timely switch to land; real estate can be a solid hedge against market volatility. The stock market is a wild ride, and while some phases can be rough, diversifying strategies and being in the know can make a difference. Ever heard of a
prop trading firm? They're all about employing diversified tactics and can sometimes weather market turbulence better. It's all about finding the right balance and strategy. Either way, glad to hear you made a move that worked for you! Hope the land investment continues to treat you well.
Yeah, i still havent ventured back into the market again yet. I have some indexed annuity funds and the land is appreciating pretty quickly. Of course i am no where near ready to sell at this point.
The problem with the huge inflation increase we have is that even if your investment increased the same amount as inflation you have to pays taxes on that increase so you are still in the whole.
Made the bank in oil market since this ignorance started in 2020. Sometimes you almost feel bad and then I think no big oil is screwing the eyes out of America so I’ll just take the money it’s creating in the oil and gas industry.
I’ve got plans in 2024 cause so does the democrats if they get beat. My prediction is that’s when she’ll all collapse. To many people with their hands in the cookie jar to let it fall now.
Just my free opinion.
Shane
Dollar cost averaging since forever. It's done well. :-)
There are zero people who retired early who do not prioritize investing.
"Ah, the rollercoaster world of stock markets! One minute you're on top of the world, and the next, it can feel like the floor's dropped out. Investing in land is a solid move; it has a tangible value that isn't as volatile as the stock market."
it can seem that way if you look at it by the minute. dont forget...land is just as subject to bubbles in the short term...not nearly as liquid...and long term when you add in property tax...maintenance costs...and loan interest...its not nearly as profitable as one might think.
The only fool proof investment is in yourself. When I was a public accountant I saw plenty of people lose everything thinking real estate would never go down.
The stock market can be a rollercoaster at times. It's crazy how things can shift in just a few weeks. I appreciate you bringing up the topic. Personally, I've been keeping a close eye on my investments too. Sometimes it's a mix of excitement and uncertainty, right? Kudos to you for making that timely decision to switch to land – it sounds like it's been a solid move, especially with the market's recent performance. As for me, I've been intrigued by AI trading platforms like
Immediate Edge . It's all about finding ways to adapt and make the most of these market swings.
I just keep rolling along, no issues here. Inflation however is hammering the middle class, sure glad I am not trying to pay for a home, debt can be a tough one.
Worker may make a few dollars more but inflation taxes have taken it all, and then some.
2 years since this thread was started. DOW, S&P, NASDAQ all up from that day ~13-16%. Several record high closings for the DOW and S&P.
Maybe start a new thread? This one is too long to scroll through for a lot of people I suspect.
To quote the late Charlie Munger.
“The first rule of compounding is to never interrupt it unnecessarily “
Did my funds take a beating under Bidenomics? Yes. Are they recovering? Yes. How long have I been in the market? (Mutual funds. Regular and IRA) Since 1985.
As a stock market proponent, I feel really good right now.
2 years since this thread was started. DOW, S&P, NASDAQ all up from that day ~13-16%. Several record high closings for the DOW and S&P.
I also find it interesting in looking back on specific stocks and strategies that were called out. Those that chose "cash" left a lot of money on the table. Some of the specific stocks that were on a roll have nosedived as well it seems.
Doing fine. Ot is the middle class wage earners who are getting pounded by Biden inflation. And, I would not expect deflation to bring prices back to normal. Inflation has slowed, but prices will go higher. Check out the price of food, fuel and new vehicles.
Inflation could go negative tomorrow and prices will be higher. Once companies get them up they will never go back to where they started.
Like I posted July 31. Oil refinery stocks is where it was at. I made over 30 buck a share on MPC.
Anytime a Dem is president you’re going to have high oil and fuel prices. If a Republican gets in in November you can bet the next 4 yrs on 45$ oil and 2$ gasoline. Those stocks will be down 75%. I will then be in all the green energy stocks. They’ll be booming.
My retirement date changed by 4 yrs in this idiotic presidency term. I stress idiotic at the expense of the middle and lower class Americans like myself.
Shane
Bidenomics is great for the wealthy, but he pummeled the American Dream for many young folks. I don't think many have realized that yet.
Anytime a Dem is president you’re going to have high oil and fuel prices. If a Republican gets in in November you can bet the next 4 yrs on 45$ oil and 2$ gasoline
It’s a bit more complex than that and has next to nothing to do with who the President is.
Missouribreaks..................they are about to realize it. It was reported today that credit card debt in this nation is now over a trillion dollars and much of that debt is held by the low and middle class.
Hey Gator maybe if the president is an oil tycoon I’d be wrong. Looks like that was the case in the Bush era. Thanks for the intel dipshit.
I was giving out a rule of thumb country boy figures. I forgot there’s idiots on here who don’t think like I do. Either way your idiot president made me rich in 3.2 years.
Shane
LOL No need for the name calling. A simple "country boy rules of thumb don't mean anything; I don't know have a clue what I'm talking about and I'm wrong" would have sufficed.
bigeasygator
Looking at what you posted on fuel prices under each president, i'm not sure how it proves Recurve Man wrong. I'm not arguing one side or the other, just having a hard time seeing how you disproved his claim with your post.
$2.18 average for gas under Bush
$3.04 average for gas under Obama
$2.57 average for gas under Trump
$3.54 average for gas under Biden
This whole market is all smoke and mirrors. Most stocks are down 80-90 percent from 2021 highs. For the most part the only stocks fueling the market is the elite stocks ie Nvidia, Meta, Amazon, Tesla, etc. All the other stocks are garbage. This is a bear market pulling wool over everyone’s eyes. Wouldn’t surprise me if the fed was propping up these stocks something seems fishy. Just look up a bunch of stocks not at the top of the S&P500.
I'm not arguing one side or the other, just having a hard time seeing how you disproved his claim with your post.
The data shows it's simply not as simple as prices are high when a Democrat is in office and low when a Republican is.
If there was any truth to what Recurve Man you would see consistently falling prices while a Republican was President and consistently rising prices when a Democrat is President.
You don't see that at all...under Bush they consistently rise (don't forget he inherited historically low oil/gas prices from Clinton); under Obama, they rise and then crash to lows; under Trump they did something similar; with Biden you're seeing that as well - ebbs and flows. There is no consistent pattern.
That's because the forces that move these prices are mostly unpredictable and have nothing to do with the President. Bush inherited low prices thanks to the Saudis flooding the market and the dot com bust; prices rose thanks to a recovering economy until things crashed thanks to the subprime mortgage crisis and subsequent Great Recession; prices spiked as supply waned and demand increased until they fell again thanks to the frac boom oversupplying the market leading to the price crash in 2015. Prices and supply were both rebounding when things crashed again thanks to the pandemic.
Again, these shocks are what moved the markets, not the President.
Why do some people have to resort to name calling and personal attacks, just because someone voices a different opinion. This is how immature children act.
Mphd hang around and you’ll catch on. There’s about 5 guys on here no matter what you post they’re gonna contradict anything you post. The sky’s blue— no it’s light grey. It’s raining—no it’s a really heavy condensation. It's really windy out today— how do you know you can’t see it. You’ll see who I’m talking about and why I called him a dip poopy. The other 4 will chime in sometime before long. Common sense used to go a long way but not anymore. It’s the new norm since everyone started getting a trophy about 30 years ago and they took discipline out of the schools. I actually call it dipshitism. That’s just a term of my own. I don’t think it’s a real word.
Shane
Spike78- you don’t have a clue, most stocks are not down 80-90%. Tesla is not fueling anything, it’s actually down over 50% since is November 2021 high. Fidelity blue chip growth fund was up over 55% last year, it is a good mix of big companies and wouldn’t have got 55% if most stocks were down 80-90%
People who think Trump lowered gas prices and that the U.S. achieved energy independence during his presidency are the idiots. During his first 3 years, average gas prices were higher than Obama’s last two years. COVID restrictions during Trump’s last year lowered gas prices due to demand destruction. That was based on state-level restrictions, not due to anything that the president or even the federal government did.
Hey y’all I’m doing just fine I pick my own and in the last 7 years I’m up over 42% so day trading a lot staying with my high dividend stocks with this idiotic administration it’s like taking candy from a baby just listen to the fed good luck all
Vangaurd total stock market index ETF has gone from $118.26 7 years ago to $244.02 today
If you’re only up 42 percent over the last 7 years, you missed out on a lot of $ Lewis.
VTI (Vangaurd Total Index Fund ETF) is up over 100% in the last 7 years
I smile at threads like this where guys try to prove how smart or how right they are rather than just exchange ideas.
Whatever you did: there are tons of examples where you could have done worse, and just as many examples of how you could have done better.
The stock market is controlled gambling, and anyone who claims otherwise typically stands to make money off of your money.
I wasn’t trying to act smart at all.
I was just pointing out to Lewis his performance was less than half the total stock market ETF.
I didn’t think that his 42 percent gain over 7 years was a brag worthy performance compared to the overall markets.
No I wasn’t singling you out by my post, just the general trends anytime these discussions happen. Timing of my post just lined up after yours lol
Iowa actually Tesla did a stock split in 2023 so yes it’s been mostly up and up. It’s finally going down some but probably not for long.
I misstated I’m up 42% for each year almost 300% over the last seven I apologize for the misunderstanding good luck Lewis
I suspected that’s what you meant to write.
Good job!
Nit picking... if you're up 42% each year for 7 years straight you'd be up almost 1800%. Compounding is magic.
Tesla was $407 on November 1st 2021. It is currently $181, all prices have been split adjusted. The trend has been down since the split, so most people would say that is down and down
Gas prices are cheaper because Iran is selling millions on the market each day while under Trump we didn't let are Iran sell their oil and fund terrorism.
As for the stock market, after you account for the rise in inflation under Biden we are still down. The 20% increase in inflation is killing us, I went food shopping with my wife and I'm shocked at how much the prices went up, well over 25% on a lot of items. I ordered a pizza from our local pizzeria and the menu that is a few years old said a regular pie cost $15.50, the price is now $22.
if we could learn to tie our shoes we wouldn't trip as much.
Not sure how many are following the leading index indicator...........
https://www.conference-board.org/topics/us-leading-indicators
Since this thread was started did your stock picking do better than about 9% growth in the S and P 500?
A safe ETF tracking the S and P would have got you that, so unless you really outperformed 9% you didn’t do much.
spike78's Link
Here you go Iowa before you say I don’t know what I’m talking about. Just noticed this today.
And when the magnificent 7 companies start to crumble due to low percentage gains the S&P500 will go down hard. I’d be concerned about my money parked there at this time.
Here you go Iowa before you say I don’t know what I’m talking about. Just noticed this today.
Iowa was referring to this comment that you made, "Most stocks are down 80-90 percent from 2021 highs." What you just shared - which shows the ratio of advancers to decliners - isn't the same thing. The A-D line/ratio does nothing to show the magnitude that those stocks are up or down.
Spike78, you included Tesla in your list of "stocks fueling the market". That was wrong. They've been a boat anchor for any individual, ETF, or fund that is invested in them since Nov. of 2021. Since then, the company has lost over half of its value. The stock split has nothing to do with it. That's what Iowa took issue with.
Matt
So what do you think? Is Boeing a buy right now?
had I thought about it, I'd have bought DWAC stock before the NH primary results ....
and made triple my investment
All I know is I research a ton of stocks before I buy and look at past performance and ATHs and I notice that most I have researched are way down which does not reflect the market today. The top 10% are most of the market and I think that is a coordinated buy from elites and the fed. Please prove me wrong.
So I looked at Teslas market cap history and yes I was wrong and it mirrors 90% of the stocks I’ve looked at. This market is fake along with the economy gotta keep making us look like roses.
Orion, yup Pelosi basically put a strike price on Nvidia suggesting a crash or a stock split. She definitely knows her stocks!
Orion, yup Pelosi basically put a strike price on Nvidia suggesting a crash or a stock split
Sorry spike, this doesn't make any sense.
A strike price is merely the price at which the owner of an option can buy or sell the underlying security or commodity. What is more relevant to determine the direction the owner of an option is expecting the stock price to move is the type of option - is it a call or a put. If she bought put options, that would suggest the price would fall. If she bought call options, that would suggest the price would rise.
You're suggesting she bought put options but that doesn't appear on any of the sites that track her trades (I only see reference to her buying put options).
Regardless, if there's a stock split the options contract will adjust to account for the stock split.
"The top 10% are most of the market and I think that is a coordinated buy from elites and the fed. Please prove me wrong."
A list of the major holders of every public issue is publicly available, so you can easily research that to learn you are wrong.
Spike, you clearly don't know how a stock split works. A split simply makes it easier for smaller investors to buy shares of expensive stock. In Tesla's case, they did a 3:1 split. Which means, instead of buying one share at $900, you could buy 3 shares at $300. If you already owned one share at $900, then you owned 3 shares at $300 after the split. The value of the company, or your investment in that company, doesn't change at all.
Matt
Matt, I know what a stock split is. Where in anything I said did I say otherwise? I have owned stock and crypto that split. Regardless to say this market is cranking due to a handful of performers is wrong.
And other Matt I don’t have to read up to know that the buyers are all the usual suspects like Blackrock and Vanguard. I highly doubt normal people like you and I would buy shares for 300 to 700 each to make peanuts. The market is a rich man’s game at the moment as no lower cap stocks are doing anything.
Matt, I know what a stock split is. Where in anything I said did I say otherwise?
When you said this: “Orion, yup Pelosi basically put a strike price on Nvidia suggesting a crash or a stock split”
Orion, yup Pelosi basically put a strike price on Nvidia suggesting a crash or a stock split. She definitely knows her stocks!
Spike, this post shows you don't know what a strike price, or stock split, is. The Pelosi's made a huge bet on a call option that suggested they thought Nvidia stock would climb above the strike price before the expiration of the call option. It did, and they cashed in nicely. It wasn't exactly a novel idea. Chip stocks have been on a tear with all the AI hype lately. I know a small investor who is up over 70% on them since the first of November. I wish I would have followed his moves.
Matt
The market is a rich man’s game at the moment as no lower cap stocks are doing anything.
Small cap has nothing to do with a company’s price per share. Plenty of small cap stocks are priced higher than big cap stocks on a price per share basis.
And as it is, plenty of retail investors invest in large cap stocks too. I didn’t know they were called the Magnificent 7, but I’ve held those companies for a couple years (and a few others) as a portion of my portfolio as they’re generally a pretty good hedge against my broader compensation. You can get into all of those companies for an amount of money that isn’t crazy.
The Pelosi's made a huge bet on a call option that suggested they thought Nvidia stock would climb above the strike price before the expiration of the call option
Her latest purchase was actually in the money calls with a strike price of $120. I didn’t see what she purchased them for but sounds like a bit of an arbitrage opportunity essentially. Nonetheless, it’s still a bet that the stock price is going to go up.
GG her latest bet is $120 on Nvidia. I do know what a stock split is but I don’t get into options I just buy single stocks for the most part. Something tells me she may be spot on by December this year.
GG her latest bet is $120 on Nvidia
Oh jeez Spike. That's not at all what her bet is.
On November 22, 2023 she bought 50 in the money call options (options contracts are generally for 100 shares) with a strike price of $120 and an expiration date of 12/20/24. I don't know what she paid for them, but as they were wayyy in the money the option price was likely somewhere close to the difference in stock price and strike price on the day that she purchased the options. For context, the price on a 12/20/24 call option with a strike price of $120 right now is $566.50 (current NVDIA price is $682.23).
If you want to execute the same trade right now you would need to pay $2,832,500 to obtain the option to buy 5,000 shares of NVDIA on 12/20/24 for $120 each (as long as the price of those shares were above $120). To acquire those shares she will need to pay another $600,000. In the meantime, if the price of NVDIA shares goes up, so does the value of the options she purchased.
So no, her latest bet is not Nvidia going to $120.
For the record, if that stock split 2:1, she would then own 50 option contracts, each one granting her the right to purchase 200 shares of Nvidia at $60 each.
EDIT: I went back and looked. The call option for 12/20/24 with a $120 strike sold for $377.35 on 11/22/23. Stock price was ~$487/share. She's made ~50% on the ~$2.8 mln investment since November. Had she just purchased stock instead of the options she would have made ~40%.
"GG her latest bet is $120 on Nvidia.
Yup. She bought deep in the money call options that expire in Dec 2024. Which implies she thinks the price will continue to climb thru Dec. She gained exposure to the stock at a fraction of the price of buying them outright. I know options are hard to understand. It took me a while, too.
I'm confused at the implication that what Pelosi did was shady. Seems like all she did was do a gutsy move on a hot stock? Nothing anybody couldn't do. Size of play would depend on size of one's pocket of course.
Spike- the market is not a rich man’s game. Everyone can get a piece of it with mutual funds and retire wealthy.
“Small cap has nothing to do with a company’s price per share. Plenty of small cap stocks are priced higher than big cap stocks on a price per share basis.”
Not to mention the advent of fractional share purchases. Weird the Bowsite’s most sophisticated investor is unaware….
It is amazing to me that so many of you think that the trades reported by Nancy Pelosi were made by her.
Matt.... must be my advanced age. Not much amazes me anymore. ;)
I was being sarcastic, not at all surprised the FOX news version of reality would be operative on a community forum thread on Bowsite
Wait what? Are you guys saying Nancy doesn't make her own trades? Shocking.
I was born into middle class, two-parent household. I have had stocks since I was 18. Was gifted mutual fund holdings for high school. Had kids early so most stock I purchased was through defined contribution and stock purchase plan. Then as the offspring were finished with college I was able to shovel money into the stock market by buying buckets of stocks through Exchange Traded Funds.. Retired this week so did start adding buckets of bonds. So, maybe stocks are a game for the rich and if my grandparents were penniless then would have been until I was 22 before I was buying stocks. I was definitely not wealthy with my pay supporting two kids, stay at home spouse and financing a reliable car for work. There was a time where was better to buy 100 shares at once which was a chunk of money for most people but that is not the case in 2024. I bet on American commerce. I buy stocks.
Orion...I was talking about her Nvdia options trade... not her whole history of trading. It does not take insider info for the trade in question. Why should I waste my time looking at their history of trading?
"Their timing is impeccable, nobody is that lucky that many times." They may well be crooks.. that said I think some wizards are that "lucky".. hardly luck though. Some are better at their skill than others that's all
TreeWalker. I like your post. It makes me think of my first formal job in high school (after middle school years of shoveling snow and mowing lawns and whatnot). It was a little country store, and the owner had semi-retired and bought the store - at about 35 or 40 years old. He said to me something like, "There will be dips, but over the long haul, the market will climb, so start buying stock now". I was in the 9th grade. It took a few years before I started, but that comment planted a seed. His point was to bet on American Commerce, as you said. I'm glad I have.
Nvidia has been one of the most talked about stocks for years. The takeaway for me is y'all need to watch more CNBC and less Fox News.
Or turn off the talking heads and do your own thinking maybe? ;)
I’m shocked by where Gator gets all his intelligent information. CNBC, probably CNN, MSNBC also.
No thanks I’m looking for the facts.
Shane
CNBC is probably one of the most non-political news stations on television. I enjoy their interviews with CEOs of major companies. They also do a good job of breaking down stocks on both a fundamental and technical basis, IMO. A few of their regular contributors, like Tom Lee, are rarely wrong with their advice. They just need to dump that damn shill, Cramer.
Matt
" A few of their regular contributors, like Tom Lee, are rarely wrong with their advice. "
Make that damn few and I'd agree. LOL
"Nvidia has been one of the most talked about stocks for years. The takeaway for me is y'all need to watch more CNBC and less Fox News."
whether yall watch fox news or cnbc...if the only thing yall own is a s&p500 index fund...nvidia is already over 4% of yalls portfolio. yall aint missin out... :)
Well Tom Lee is predicting a nice correction on the S&P500 we will see.
I’m shocked by where Gator gets all his intelligent information. CNBC
There's also my schooling and my professional experience. But in terms of news channels on TV, CNBC is on all day. Like GG said, CNBC is politically unbiased, as any outlet focused on the economy, investing, etc should be. And I think you can even learn a lot from ole Cramer, GG :)
Confess I don't know who Tom Lee is...
But I know who Paul Tudor Jones and Paul O'Neil were. ;)
"And then at the end of the day, the most important thing is how good are you at risk control. Ninety-percent of any great trader is going to be the risk control."
— Paul Tudor Jones, American billionaire hedge fund manager, conservationist and philanthropist. In 1980, he founded his hedge fund, Tudor Investment Corporation.
BEG, Cramer said the tech trade was over a month ago. He also advised selling Caterpillar on 1/18. Look at what CAT has done since then. That's just 2 recent examples of his bad advice. I could list dozens over the last year. I switch channels when that idiot comes on.
Matt
Personally, I'm a big EMH (efficient market hypothesis) guy. So, I don't get surprised when people get specific calls wrong. With that said, I think anyone can learn a lot listening to Jim - he may be wrong but you can learn in general about finance, economics, and investing listening to him regardless of how right or wrong he is on specific stocks.
Grey Ghost's Link
"Well Tom Lee is predicting a nice correction on the S&P500 we will see.
Not exactly, Spike.
"he may be wrong but you can learn in general about finance, economics, and investing listening to him"
I can't.
He's cost people more money in last 5 years than anybody except maybe Cathy Woods IMO
“Nancy and Paul have admitted they buy and trade their own stocks.”
Nancy is on record saying she does not trade equities. It is Paul’s business. It is just funny that legitimate news sources report that “Paul Pelosi bought…” or “Nancy Pelosi’s husband sold…” but some bowsiters “Nancy bought…” and expect to be taken seriously.
Having said that, they should be treated as insiders and expected to follow rules to ensure they do not trade based on MNPI.
Cramer also swore by Lenny Dykstra as a stock genius and that FTX's Same Bankman-Fried was incredible.
Lots of love for Cramer lol my point was that investing in stocks are a speculative affair. Listening to someone like Cramer will give you an idea of what he is looking at or what he sees that drives his speculation. Even when someone's logic turns out being wrong, it's insightful to understand their thought process.
Mint, one of my favorite Cramer blunders was when he declared
"Bear Stearns is not in trouble!" It collapsed a week later. How that moron has stayed on TV is beyond me.
What!!??!! The noise is deafening...guess I'll do what I do best....nothing.
Cramers a hack…it shocks me he is so ingrained into CNBC
I look for trends…but don’t see much actionable currently
A lot of manufacturing has gone from China to India…the ETFs I dabbled in are humming along
EV sales in the dumper but I hesitate to short EVs …or buy automakers with their high input costs, high prices, high labor
I have a decent % in oil related stuff- pipeline stuff is good but everything else is in stalemate doing nothing. If the mideast blows up- those should pop but probably not a big amount.
Trend for broad US mkt is almost always up in the first couple months then it sags toward summer- but selling gets us a taxable event.
Tech ETF’s are always good…historical outperformance…but right now these are extended. Personally I would wait a few months before adding to these.
I really got nuthin right now. Most of my $$ are in short term treasury.
I should add, be aware India etfs are not tax advantaged like typical ETFs, they can incur yearly tax liability much like a mutual fund.
Good stuff Beendare !
Myself .. I got nothin
Dan, good to hear from you my friend.
I’m not sure why I even posted…..i put a little in 2 India ETFs a month ago…but the rest is in a couple LT holdings- ETFs and a few stocks- about 30%, the-rest is in ST money mkts.
I’ve been watching…but I got nuthin.
Now if the middle east blows up- hopefully not….or China invades Taiwan -which is probably a low % but who knows….then there will be some good buys out there.
EDIT; actually there is one trend a guy might want to look at; sports betting is blowing up. These individual and parlay bets especially. draft kings was up over 100% on a yearly basis. These might follow the market trend of backing off into the summer ( though the football season earnings report will hit in a couple months, and that should be huge) Something like the ETF BETZ is probably a good LT hold -
"I’ve been watching…but I got nuthin."
I'm curious what you've been watching. I've been watching the Nasdaq climb 32.5%, the S&P climb 21.5%, and the DOW climb 14.12% all in the last year, while the vast majority of talking heads and advisors were warning of an imminent recession. I'm glad I ignored them.
Matt
Up 29% YTD
Good start. Took some profits in late Jan. Celsius did well for me last fall and is still performing. That heads up on Molson Coors was key to that 3:1 split
You honestly think Nancy has no involvement in her or her husband's stocks? She isn't the only one most of them are inside trading and its fairly obvious
I went back and looked at all the trades attributed to her. There's really nothing surprising on the list. The bulk of the transactions are related to major blue chip stocks like Disney, Microsoft, Apple, Visa, and Google. Pretty boring stuff. Plenty of the transactions attributed to her lost plenty of money as well.
“You honestly think Nancy has no involvement in her or her husband's stocks?”
That isn’t what I posted, but feel free to provide your evidence and perhaps that will change my mind.
It's not Nancy it is her husband that makes the money with the stocks. I'm guessing there is a reason why the bill forbidding Congress to use insider information for investing has never been voted on. The swamp knows how to stay in power and make money.
I don't see much in Celsius or Molson Coors.
I guess I'm not very good at reading charts though so it's likely there and I'm just not reading it right.
Dawg, maybe you need to drink more Molson before reading the charts. LOL!
GG that’s funny because the article I read showed him saying we could be looking at a big correction. Funny how the media sways it such BS.
Why should I care what some guy says on tv or writes an article? Honest question
Spike, maybe you need to find sources that actually report what people say, instead of sources that put their spin on it. Tom Lee is one of very few analysts who predicted the 2023 markets correctly. Don't bet against him for 2024.
Remember Tom Lee about 2nd qtr or so, last year, was calling 4800 for S&P at year end. In Oct, his call was looking bad, but year’s end, dude was right.
Talking about politicians, I was at Costco the other day, and a guy is coming out with a cart full of nothing but DEF. And knowing how much more is needed in newer rigs, than used to, I thought, “who would have had the foresight to load up on DEF related stocks 10 years ago”? The answer, politicians voting to pass all the clean air bills.
Talking about politicians, I was at Costco the other day, and a guy is coming out with a cart full of nothing but DEF. And knowing how much more is needed in newer rigs, than used to, I thought, “who would have had the foresight to load up on DEF related stocks 10 years ago”? The answer, politicians voting to pass all the clean air bills.
When I say nothing I’m talking going forward from today. I can’t recommend guys pile into my winners right now, markets have run up pretty hard.
I’m over guys talking about past performance and they got nothing going forward. BTW, bluedog did call this up market BEFORE it happened- good call Dan.
Personally, I’m going to DCA some of my short term treasuries into more India, BETZ and the tech ETFs but not now….. down the road.
FYI, Tom Lee predicted small caps may rise 50% in the next 12 months. His reasoning was small caps have lagged behind over the last year, and the prospect of lower interest rates will help them the most. Small caps rely on leveraging debt more than large caps, so cheaper money will benefit them. He called for the Russel 2000 to hit 3000 in 2024.
Everyone with teeth is saying small caps in 2024. Same guys who been taking profits off large caps in last few weeks. That's what lots of investments firms been doing. Heck, I have been doing it. With forecasts in some markets sectors all looking red in near future a profit is a profit. You do not have to watch a talking head to see this. Still plenty places to have your money do well for you in 2024. I think dumping some Apple @$200 was not a bad deal after a long time. Do they still do well every quarter? yes but i'm in to turn a profit.
FYI, Tom Lee predicted small caps may rise 50% in the next 12 months. His reasoning was small caps have lagged behind over the last year
I think this makes a lot of sense, Matt. I think part of the reason blue chips have done so well is they have been more resilient to the higher interest rate environment. With rate hikes paused and the prospect of cuts on the horizon, I think small caps might be a strong play this year.
Bigeasy look at some of the trades old Paul has made and then look at some announcements congress has made a few days later. It's pretty obvious what the dinner conversations were about.
Which trades?
Oh you mean Tom Lee said what I said earlier about stocks being way down and the market propped up by the few performing large caps? Oh good to know
Spike, that's not at all what he's saying. Lagging does not mean "being way down." Not shocking though coming from a person that thinks Pelosi is betting on Nvidia to $120 based on the option action.
https://greenwald.substack.com/p/nancy-and-paul-pelosi-making-millions
Altitude Sickness 's Link
spike...it's clear you've studied and researched the Market a lot.. much more than most
Always interested in your views and insights. Thanks
Paul Pelosi in March exercised $1.95 million worth of Microsoft call options less than two weeks before the tech stalwart secured a $22 billion contract to supply U.S. Army combat troops with augmented reality headsets.
In January, he purchased up to $1 million of Tesla calls before the Biden administration delivered its plans to provide incentives to promote the shift away from traditional automobiles and toward electric vehicle
Let me translate all that for you, Altitude. The Pelosis have made money by making long term bets on some of the most heavily traded, large cap stocks in the USA (they've also lost a bunch of money on some of these trades).
Again, my takeaway is just how boring their trading history is after looking at the disclosed trades. Even these "allegedly" scandalous trades are not so much so when you look at the details. Like this one...
Paul Pelosi in March exercised $1.95 million worth of Microsoft call options less than two weeks before the tech stalwart secured a $22 billion contract to supply U.S. Army combat troops with augmented reality headsets.
He exercised those options when they expired. The options themselves were purchased a year ahead of this date.
The issue is. They should either not be trading period. While in office. Which is not necessarily reasonable, but if they were not Career politicians wouldn’t be harmful.
Or they should not be involved in any legislation being remotely close to what investments they hold.
We pions in the free market have ethical rules at our companies that clearly stipulate conflict of interests and ethics. If it has a faint smell. You don’t do it.
If for example I am involved in letting contracts out. And I am holding 1-1 meetings with any companies hoping to gain a contract. And then that company receives a contract. It does not matter to the other companies bidding if I did or did not actually do something unethical. It looks shady
An ethical person knows this and does not put themselves in that position. Most businesses do not tolerate the hint of ethics violations. Only in politics are the grey areas seen as a way to pay to keep people interested in politics.
I bought a ton of Apple at $14/share. Very happy with that purchase.
I bought a ton of Apple at $14/share. Also, bought 50,000 shares of American Airlines for 40 cents a share when they went bankrupt. Very happy with those purchases.
I don't necessarily disagree, Altitude.
My only point is there's nothing that seems "pretty obviously" shady as some people have claimed, despite what the article you posted insinuates. For example, claiming they bought Microsoft two weeks before a government contract was announced falls flat on its face when you realize that for all intents and purposes that transaction actually took place a year before.
Again, happy to hear more about the "pretty obvious" examples.
If I was involved in top level discussions on key policies and bills that were likely to make it through
I would be happy to invest a year in advance
because it would take that long to get out in the market and actually make money
so one year is nothing in political time or in the free markets There should be like a five year window, not one year
"Oh you mean Tom Lee said what I said earlier about stocks being way down and the market propped up by the few performing large caps?"
Not even close, Spike. This is what you said earlier:
"Most stocks are down 80-90 percent from 2021 highs.
That's a ridiculously false statement. The entire Russel 2000, which is the smallest 2000 publicly traded companies, was up 15% in 2023, and the index is only down 19% from the 2021 highs.
Yes, the magnificent 7 had disproportionately large gains in 2023, but the other 493 companies in the S&P 500 had gains of 17% collectively. So, once again, your claim above was dead wrong.
Matt
SMH breaking $200 today. Thanks Nvidia. :)
Bigeasy you don't think any politician has inside info and uses it to their advantage in the market?
You're changing the subject. I never said that. Plenty of people - politicians and otherwise - have used insider information to gain a market advantage. Where laws are broken, people should be held accountable.
I asked you a very straightforward, specific question. You said based on the timing of some of the Pelosi trades it was "fairly obvious" there was something shady going on. I asked which trades.
That’s hilarious as neither of those articles have anything to do with what you are talking about. One related to Paul Pelosi buying stock before an insider trading ban was to be proposed, and the other relates to him selling a position at a loss. Funny stuff, just keep believing whatever the talking heads tell you that you should believe.
Bigeasy here is a couple that seem to have impeccable timing
From the October 2022 Business Insider article:
Speaker of the House Nancy Pelosi's husband, Paul Pelosi, exercised seven-figures worth of Alphabet stock call options days before House leadership unveiled a bill that would ban members of Congress and their spouses from trading individual stocks.
The value of the stock purchase was between $1 million and $5 million, according to a certified congressional disclosure made by Nancy Pelosi on October 14. Members of Congress are only required to report the values of such trades in broad ranges.
Paul Pelosi exercised the Alphabet call options, which he purchased in December 2021, on September 16 — the day they were set to expire. (Alphabet is the parent company of Google.)
From the July 2022 Forbes article:
Paul Pelosi sold 25,000 shares of Nvidia at $165.05 on Tuesday, worth $4.1 million, according to the filing.
Pelosi lost $341,365 in the transaction, according to the filing.
Pelosi missed out on a sizable payday, as Nvidia shares have since jumped 7.8% to $177.90.
I'd hardly call that impeccable. Nonetheless, his trading strategies seem pretty straight forward. He bought these options well before he exercised them (the Nvidia options that were exercised and sold in the Forbes article were purchased in July 2021) He exercised the options on their expiration date. He more or less seems to sell the stock he purchased not long after they're acquired.
Again, if he timed these purchases based on this so called insider information, he would have had to know these events were taking place many months to over a year ahead of them actually occurring.
I get the sense you don't understand how option trading works, Orion.
GG I know most of you probably use advisors but I look up charts daily and most stocks I look at are way down from 2021 highs. I don’t research top stocks I’m looking for stocks that could rise a good amount. I could care less about making $300 investing in the magnificent 7. One stock I bought a bunch of is Redfin cuz logic would tell me that when interest rates are lowered I’m looking at probably a 100% gain. I don’t feed off of people like Tom Lee in fact people like that have steered me wrong. For example I’m still waiting for my Silver to crank with high inflation but that turned out to be bullshit just like this fake market is. I’m calling Redfin at 100% gain around June or July we will see.
I could care less about making $300 investing in the magnificent 7
Maybe you should invest more than $1,000 then, spike.
Seriously, your return is based on when you get in, when you get out, and how much you invest. I didn't know they were called the Magnificent 7, but I moved some money into more or less all those stocks at the end of 2021. My return has been ~30% since then.
I'm not a financial advisor, but I would encourage you to stop trying to pick winners and invest in a diversified index fund that attempts to replicate the broader US equity market. If all you're seeing is stocks that are down you're definitely looking in the wrong spot.
I’m calling Redfin at 100% gain around June or July we will see.
Redfin Corp? Seriously? Perhaps you should seek an advisor, Spike.
I think you don’t know the difference between a gain and a loss.
spike... you say you "bought a bunch" of Redfin.. what percentage of your portfolio did you invest in it? If it in fact doubles will you sell? If it loses 50% will you sell or hang tough? How's the Market treated you the last year?
I think you don’t know the difference between a gain and a loss.
lol
The cognitive impairment political thread got me wondering...is there an age where people should no longer make trades in the market? Do younger people have too large of an advantage for them to compete? Can they even hope to come close to others as they age.. Let's say over 75?
So like every member of congress?
Looks like the S&P should break 5000 today and NASDAQ is closing in on a record close as well.
Looks like the S&P should break 5000 today and NASDAQ is closing in on a record close as well.
Yup, looks like each are up ~13% since this thread started. I'm curious if everyone that got out got back in?
I also find these charts interesting, for those that like to try and pick winners (posted one earlier, here's how each sector has historically performed).
This version has the description of the sectors (though it's missing 2022).
BEG...think I just got vertigo..
Bluedog, Redfin is around 50% and will I sell when it doubles hard to say? It depends on where the market is at but GG can laugh all he wants but we will revisit this in the summertime when rates go down. Barring them from going Bankrupt if they do go down it shouldn’t be much so I’m not worried at all. To your last question I win some and lose some in the market. I sometimes make great calls but play it wrong like second guessing myself and selling only to have it crank a month later like my oil stock plays when barrels were in the negative. I’m still kicking myself over that!
You have 50% of your investment portfolio tied up in one stock?
BEG in my stocks yes but I also have silver, gold, crypto, and a real estate reit. I have a 401k but the rest are all my plays. I started buying stocks and bonds back in my late teens. The first two stocks I bought were WEF back at its IPO and Vanguard mutual fund. I’m far from a newcomer. I was buying government Ibonds weekly back when they were 6-6.5% when I was maybe 20 years old. I’m the type that does everything on my own whether I fail or not. The only thing I want now is land which sadly I kind of feel like I missed the boat on years ago.
And to really answer your question Redfin 50% yes why? Because I’m that damn positive it will go 100% minimum. Most likely $21 if the market does well but since Covid everything is hard to judge. You want a nice fairly cheap pick? Sound hound AI a little over $2 today. I have confidence in my picks.
Spike, I'm curious how high in percentage your gains were last couple years? I have a feeling you're creaming those elites and the S & P..
Just for you spike! Let’s stick it to the elites!
If rates only come down 25-50 bps in 2024, no way Redfin moves up much. No way it is doubling based on that fundamental alone.
Rate hikes are already priced in in my opinion and I don’t expect the stock to move much, Matt.
I've learned never to say never in the Market. Stuff happens from time to time. That said I consider money management to be 90% of the game. (not original, think Paul Tudor Jones said that in a book I read)
I strive to deal in risk and probability.. I'll just say I wouldn't touch a stock like Redfern.. or Sound Dog.. but then I've never been a bottom feeder. I also don't make predictions, again just probability. I don't do hunches and I don't do luck. I lean toward big cap stocks and am far more into using technical factors than fundamentals
I wish spike all the luck.
Did some profit taking. Grabbed some T bonds on cyclic and will continue and see when Joe and Yellen's BS takes us. This way I know im not going into the red under the dying days of Joe's term. You can be sure they will start QE for him soon. Lets see what that does to the markets. May hep it but on the street the $ gonna be worth little.
BEG now just press the button and actually buy! Is that Ally financial? Bluedog I have some stock picks to try and make a quick return this is all side bets my lame 401k is “safer”. BEG I disagree as the real estate stocks have been hammered. Poor boys like me need to buy hammered stocks to make some money. Sure I can buy Apple but for what? Make $50 end of year meh?
spike, a quick glance tells me if you'd bought $10,000 of Apple one year ago you'd have $12600 now.
If you'd bought $10,000 of Redfern one year ago you'd have $9638.
Apple 1 year gain +26%
Redfern one year gain - 3.62%
That is fact
If rates only come down 25-50 bps in 2024, no way Redfin moves up much. No way it is doubling based on that fundamental alone.
Matt, that may very well be but you know what I’m sure you guys will remind me if I’m wrong and I’m fine with it and look forward to the outcome.
"If rates only come down 25-50 bps in 2024, no way Redfin moves up much."
Read an article this AM making a case for one more increase in the Fed funds rate in 2024 given the reversal in some key metrics (e.g. recent lower-than-projected unemployment, strong stock market). I don't think another raise is likely, but I think the Fed funds rate will come down more slowly than most believe given how stubborn the US economy has been in responding to the Fed's efforts to cool things off.
I think 2-3 hikes are already priced in.
And don’t worry spike, I hit buy, just for you. If you’re right I get a new bow.
Just a thought regarding AAPL... it's not one I normally follow but looked at it a tad. It's shaping up forming a buy point. If I was buying I'd wait until it hits about $190... Then it'd be a go for me. I don't plan trading it, I'm 100% full currently (Feel free to watch its performance.. it looks promising )
If rates only come down 25-50 bps in 2024, no way Redfin moves up much. No way it is doubling based on that fundamental alone.
Matt, that may very well be but you know what I’m sure you guys will remind me if I’m wrong and I’m fine with it and look forward to the outcome.
spike, what's your percentage being right vs wrong? Guess if you're hitting doubles you don't have to be right too often?
bluedog, I was not right quite a bit during the pandemic I was on the stock market crash side and pretty much stayed out only placing a few bets. I watched the market crank while small businesses were shutting down. Little did anyone guess that the millennials on Robinhood with their Biden bucks would run stocks to the moon I sure as hell didn’t. For people with the just keep buying in mentality you did very well but imo logic and reason went out the window. Logic also said inflation causes gold and silver to rise well that wasn’t too spectacular either. Bitcoin was forecasted to go to 90-100k but stopped at 69k. It was an odd and hard time to predict anything. Now this year we have inflation, high interest rates, wars, an election, layoffs, political bullshit. So I’m guessing this year will be all a huge gamble as well. I can lie and say I did wonderful but everything is sideways now. To give a great example is GameStop stock wtf.
I freely confess not having a handle on Bitcoin... it looks like pixie dust, maybe it isn't? I just haven't grasped it. So I mostly leave it alone. Think there is always a "wall of worry" during any Bull market? Those Robinhood players you refer to, perhaps they caused wild swings in a few select stocks but don't think they have much influence over market itself.. Some big institutions with a lot more money I think.
Individual retail investors account for less than 20% of the total US stock trading volume. The Robinhood crowd who played the Gamestop fiasco had next to nothing to do with the overall markets recovering from the covid crash.
“I think 2-3 hikes are already priced in.”
Where are you seeing that? From what I have read a decrease is unlikely in March but the market is ascribing a ~60% likelihood of a rate reduction in May.
GG are you nuts? The Reddit/Robinhood traders cranked silver and whiped out the shorts. Go ahead and look at any chart minus the S&P 500 in 2021 and the highs are insane. Take Redfin for example that went to $100. I doubt 80% of these stocks will ever hit their 2021 highs again.
I have read every post. Sorry most have no idea of what they are talking about.
Been in the market for 50 years. Started at 25 and retired comfortably at 56, and came from no money.
Worst thing I have read here is from Spike, pure BS.....
Carry on. For you young men, here is my advice. Live Cheap. Buy land. Buy property. No matter, work extra jobs to pay for fun. Work your ass off from 25 to 45. Buy Treasury notes, Municipal bonds, CDs, and diversify in the Market. The President does not affect the Market Repeat that to yourself twice a day. The opportunity to make good long term money has been firm all of my life. I survived 2000, 2008, and 2020, there will always be hiccups. You can not make solid money quick, unless you get lucky. I came from nothing, to listen to Spike, is just sad. Think for Yourselves. Wish I was 25 again. Great world out there. Good luck
I liked your post Groundhunter, main thing is you accept personal accountability. Don't waste energy wishing for the right President, the right political party, to save you and make your life better. That thought process is akin to a slave wishing for a good Master.
In the end it's on you...and no one else.
Ground hunter sorry but I disagree. You have been around a long time but now houses are not 25k anymore, land is through the roof, rent is through the roof, commercial store fronts are closing down, bank interest rates are garbage now, bonds I owned were 6-6.5% went to 3% when inflation was high. Live cheap you say? How with todays prices here in MA lunch now costs me $15 minimum for a damn sandwich. Work multiple jobs? Yup sounds great. But what I say is stupid?? Sorry bud but I guess I’m living in todays world. And please tell me any of my points are incorrect.
Ground hunter, I had similar experience, started investing in stocks, bonds and mutual funds in my early 30s. Retired very comfortably on my 61st birthday. I did not come from money. I’m 73 now. I bought hunting land when I was in my late 50s. It adjoins some land my father bought many years ago. I paid about 4x per acre what he paid. I have an offer in for the land that adjoins my current property . Land prices have trended up for many decades, but not every individual year though. Land is expensive today, but today’s prices might be cheap in the future.
Well spike I respect you. However we just disagree. A young man has so much more opportunity in this day of age. Interest rates are cheap. I have friends sons, who are in union trades, making a ton of money... they adjust their life styles. I started in a world of 12 percent rates on loans. We just disagree, but we both love to hunt. Stay well.
Groundhunter tough to say but hopefully we both can agree that times are changing and probably for the worse. I know many people that can’t even afford to invest and they make over 50k a year. I remember my father made $20 an hour and we lived good and went on vacation every year and he always had a nice car. Today $20 won’t do anything especially in my home state. Now you mention 12% loans but you also had way cheaper cars and houses in that time frame. Here in MA an average home is over 350k with a 7% loan vs a 100k home at 12% back then and let’s not forget property tax then and now. Alright rant done time to read about something else be well.
Great post, Groundhunter.
spike78's Link
These guys are predicting a down turn in the market this year. Who knows what will happen with elections coming.
great advice groundhunter…
1. spend less than you make.
2. invest the difference in proven long term investments.
do that and you’ll retire well.
It’s really that simple…
What!!??!!…… Jackhamma running,boiled okra eating mathbeauticians dun clogged up this thread and I’m trying to hunt and peck with gone sleep hands from sitting on them this whole time
Grey Ghost's Link
Spike, Jeremy Grantham has been predicting an epic market crash for almost a decade. I guess if he sticks with the same prediction long enough he'll eventually get it right.
The probability is the market will be up end of the year. Doesn't have to happen though.
The best investment style for the normal person is to do regular buying in a S&P 500 index fund. This style will reward you well at retirement time. Whether the market is up or down this year doesn't matter at all.
If you're a active competent stock trader .... whether the market is up or down in a year doesn't matter to you either. You trade the direction of the tide.
If you fit neither of these types... good luck, you may do ok .. perhaps.
GG he doesn’t hold a candle to Robert Kyosakis predictions lol
The only good advice Jim Cramer has ever offered is;
“There is always a bull market somewhere”
And its true….thats why trends are important.
Nice to see small caps finally joining the party.
Going to see some profit taking at bell today. CPI and InFl #'s looking tough. Only way the market gets a rate cut this year is if its done for a political purpose. Those TBonds are looking better and better now. Hope I can get more off the last auction on cycle.
The fake news can only go on for so long. Example is unemployment numbers, amazing I see more people out on the road and shopping then ever before but yet nobody is unemployed? Bullshit
Builder, what do you like about the T bonds vs I bonds?
T Bills to be exact. Short term took some $ out market rolled into TBills have been and will every 90 days if rate at auction stays the same or gets better. Why get smashed in a downturn. We know it was coming, January was great. Beginning Feb I sold and moved some assets to safer turf. Not that 2024 has not been very good so far.
I agree, was just wondering why you chose those over I bonds? Asking because I’m debating here.
Altitude Sickness 's Link
The market is down today based on higher than anticipated inflation. This could push out an hope of a rate cut by the Fed.
If the feds won’t budge on the interest rates I may have to bump my Redfin bet up a couple months lol
A buddy over to watch the game has many large condo/ apartment projects (150-250 units per) going across the US in the cities people are migrating to. He says money for those projects have dried up.
Trend for sure…but probably not actionable in this discussion. Maybe good for existing REITs?
Has anyone been following Puts on banks or the broad market? Feels toppy right now.
Yes, housing sector getting clubbed. Think it is setting in that rates below 5% are a dream in near term. Very glad i made some moves and sales end of Jan. Rate cuts now really kill the dollar and raise inflation. Markets would not mind but my pocket will.
Spike 78.......There is no state income tax on your interest income from the sale of Tbills. The interest income from your I bond when it is redeemed is subject to state income tax.
Buckhammer no I bonds are exempt from state taxes.
There is a small on my tBills as i have someone buying them at auction for me.
Private Equity is the key now. Rules have changed, and you can get in on that. Not tied to the market. Just a thought.
Great pick on Sound Hound (SOUN) on Feb 9 Spike.. Well done, hope you followed through and bought some.
Up +45% after hours
Bluedog I bought that awhile ago only wish I had bought more!
Just checked bought at 1.96 not too shabby. Being an AI stock with a market cap of 500 million that stock should soar depending on the market of course. I never envisioned Nvidia owning it though that’s a home run.
spike78's Link
Thought this was funny for y’all
Another record breaking day in the markets.
Yup the entire worlds economy and markets are hurting but ours is miraculously at all time highs. And Nvidia keeps climbing non stop. Only in America!
I'm enjoying the market action right now. Glad I didn't listen to the Chicken Littles who warned of an imminent crash and recession for over a year, while equities soared.
“Yup the entire world’s economy and markets are hurting but ours is miraculously at all time highs. And Nvidia keeps climbing non stop. Only in America!”
Not true. China is hurting and parts of Europe, but much of the rest of the world is doing great and so are their markets. Look at Japan, India, Germany, Brazil, Mexico, Vietnam..
Of course I am liking the recent markets but I like much better, the 3,5,10 year trajectory that the market has taken.
I'm worried about the debt bomb we have right now and how that is going to be dealt with when we continue to spend like it's no tomorrow. Biden acting like Santa is only making matters worse. Taking inflation into account the market returns have helped but know where like the past gains when inflation was 1.7% per year.
Builder07's Link
Took a chance on these folks couple years ago. 5000 shares was doing research about fatboy drugs. Its has really gone well.
Some folks getting whacked hard with taxes pulling out of 401's and IRA's. Sad really, still some really great opportunity's out there for sure. 2023 was not a super year but it was OK.
I just sold a bunch of stuff except for a couple key large holdings like GOOG.
I'm doing it a little bit due to market timing at a high point...but more so we can buy another home without a huge note.
I swear, if I had a do over 40 years ago I would have bought more ETF's- High tech and broad market- in my accounts that are subject to cap gains Tax instead of annuities and IRA's that tack the distribution right onto your regular income.
Biden who has already raised taxes to us...and to Corporations which is just a pass through expense that gets passed down to us- a double whammy....and is floating the idea of 44% cap gains tax- which would kill capital investment.
Funny how most of the companies with good earnings had their stock drop and here we have the top S&P companies working their way back up. I haven’t ever seen this market as stupid as it’s been lately. All a manipulation game.
I've not noticed any unusual behavior in market movement .
Been thru it all. Presidents don't make the Market.... invested after college, in 1974. Rough and good times. Retired at 57. Lived within my means. No credit card debt. No car payments etc. Bought small houses and flipped them.... lots of part time jobs to go on hunts. Retirement money all in annuties..... extra, I buy stocks and do some trading. Can do that, with security behind it. American Stock Market has not let me down. Steady and slow..... Social Security, at 62, all stock invested, have doubled its worth. At 74 believe I beat the system. 90 percent of hunting equipment bought used or on really good deals. Started out with squat, not rich, but no worries... Never retire with any debt.....
My portfolio is doing well. Can’t complain.
Serious here.... I've noticed stocks do 3 things. They go up, they go down and sometimes they just go sideways . Why is this market manipulation spike?
Give me an example to help me understand if you would. Thanks.....
Yeah, enlighten us, spike. I think the market has behaved pretty predictably (with the exception of the meme stocks like GameStop) based on how the broader economy is trending and how companies have been performing.
Yep... of course I don't do meme stocks. Also nothing less than $5 ever and very very seldom anything under $10. Sometimes do stocks priced in $800 to $1500 range though.
Always eager to learn ... hoping spike will share his thoughts.
The last year has been good, and the previous one was also.
My really boring total market index that I dollar cost average into at least 1 time per month seems to keep performing good enuff for me.
I put in a good chunk every month, and add extra each time there’s any 2-3 percent dips.
Real nice bowhunt.... You're going great IMO.
These last couple years I'm a trader not a investor. Maybe to fight dementia, maybe boredom... more likely because i enjoy it immensely. Always things to learn. Not a day trader, 3 days to 6 weeks is typical hold. If I checked bet 2 to 3 weeks most common. For me it's stimulating..
Well, the major indexes closed at all time highs today. Glad that I’ve invested as much as I could, since the mid 1980s. Not every day, month, year have been great. But the trend has been.
This stock market proponent is feeling pretty good about things.
Think somebody maybe should start a "stock market proponents 2" .... this sucker is getting kinda long and bulky. What you guys think?
Checked out our accounts this week and we are on target. Nothing is guaranteed but I have to say that I’m happy.
Well, while my Mutual Funds might have taken a hit, my land investment has held steady, maintaining its value through the market turmoil.
What mutual funds are you in that have taken a hit??
Must be a Cathy Wood mutual fund?
Frickin bots. I don't get it.
I focus on the S&P, rolling along just fine.
The Dow and S&P 500 closed at record highs 3 days ago.
"The Dow and S&P 500 closed at record highs 3 days ago."
Yup, then our 2 idiot candidates starting flapping their gums about who is going to toughest on China and Taiwan, and look what happened to the tech sector the last few days.
GG that’s how they help out their donors and trade from the inside. But in reality these markets are set to dump they are so run up and skewed to one side.
If you get worried when the market drops for a day, week, or months, you probably should invest elsewhere.
Get your dry powder ready boys it’s gonna be bumpy. The R bells are ringing and shits getting deep.
Get your dry powder ready boys it’s gonna be bumpy. The R bells are ringing and shits getting deep.
Spike,Don't suppose you'd care to translate that for me?
Get your dry powder ready boys it’s gonna be bumpy. The R bells are ringing and shits getting deep.
Well... I can't argue with you LOL
It means Recession is coming and there will be some great deals to be had between the craziness going on in the world and the incoming recession a double whammy.
Thanks spike ;) Hope you do well.
Let us know when its safe to buy again…..
I have had the pedal to the metal with my investments since 1987.... 63 yo now....finally put 22-25% .in some safe(r) investments... I did well over the years ....never ..(and I mean never) got nervous when there was a market correction.... Never bought (predicted) high flyers....chugged along with my value stocks....(Low PE)....I did good.
Norseman yup the 7 actually 5 or 6 were the ONLY stocks to do well and the hammered down companies are getting even more hammered down. It’s almost like that money was purposely going to the titans of the world that saw record profits.
“It’s almost like that money was purposely going to the titans of the world that saw record profits.”
Yes. This is literally how investing works. I know I purposely put a fair chunk of my portfolio in those companies. And no, despite you parroting that line, they weren’t the only companies to do well.
Only fools haven't been invested in the Mag 7 over the last 2 years, if they had the chance. That said, there are plenty of other companies that have done very well, too.
Even small cap rally will dry up soon when they realize the fed wont be able to drop rates.
Norseman, what makes you think the feds won’t lower rates?
Nope the feds will drop rates they have no choice and there won’t be a soft landing.
Why do you think that, Spike?
I dont think we have been given the real numbers of the economy/recession we are in. They will wait until after the election for sure. December???. We are still on the downslide. If they lower rates it will just be for show and prolonged recession and keep the dollar down. My info on commercial and residential development is down a 1/3 since last year. Most likely will wait until Q3 earnings are in.
If True mp gets in all be in cash with interest by end of March. They’ve printed fake money for the last 3.5 years. I’ve taken advantage of these idiots at the expense of struggling Americans trying to get by on this inflation. The markets in my opinion have been propped up since this idiot got in office. I personally think the biggest market correction is coming within a year from now if Trump takes over. So I’m claiming in the next 6 months its buyer beware. I’ve already dumped all my oil stocks that I’ve gotten rich on. Micro chip and AI stocks are what I trade now.
Shane
So Norseman, you are another conspiracy nut, like Spike. Got it. Thanks.
You really know how to make friends GG. You remind me of a movie character….
If it happens it will be a small rate drop, with inverted curve short term rates lower than long term. Be careful its going to be volatile
An inverted yield curve occurs when short-term rates are higher than long-term rates. It gives me a chuckle to read analysis from people in the finance industry and then come here to read just the opposite.
spike78's Link
Well Matt did you know that their was only one time where an inverted yield curve didn’t result in a recession?
Free advice.... unless you know a trader has performed well for at least a couple years, take anything he says with a grain of salt. Ideally he's performed better than you have.... at least beat the indexes. Otherwise why in the world would you pay much attention?
still comes down to time in the market outperforms timing the market. Stay in and keep investing through the ups and downs.
The hold and hope strategy is certainly one way to do it. But it doesn't "outperform" all other strategies. I think bluedog would agree.
On another note, the US economy continues to defy Spike's expert analysis. The GDP grew a higher than expected 2.8% in the second quarter this year. Of course, some will claim that number is fake because it doesn't fit their political narrative.
Yes and no GG... for a younger person that has no burning desire to spend the time or the interest required to learn trading I consider monthly investing in a blend of SPY and QQQ to be an excellent plan. (If you're investing a lump sum however, better be sure you don't invest it all at once in a "high" cycle..that could take a long time to recover from)
JMO I know little about financial things compared to many I expect
Ford lost big time,,,44000.00 on each electrical vehicle built , sold and unsold. Stock is in the toilet, Kamala will be a disaster for them. If the left wins the house, and the White House. Could easily happen. Many lefties on this site will vote for her. never understanding her agenda
EVs are less than 4% of Ford's production. They have bigger problems than EVs .. Truck sales declined more than 6% as one example.
GG but what you fail to understand is that GDP is quantity x price. Wow amazing how well GDP and company revenues are doing when you inflate the prices 30%. In reality if you look at some companies like Starbucks for example their revenue should way higher since they raised prices. All smoke and mirrors but nice try.
Oh and by the way my short QQQ is up 23%. Just wish I put more in.
Ford also continues to have a problem with excessively high warranty repair expenses dating back for several years. I think they spent nearly $5 billion fixing customer's cars last year. That's almost as much as their expected earnings this year.
Ford is the biggest piece of crap automaker out there. All my work trucks were garbage. I’d only take a Ford for free wouldn’t pay a dime for them.
“Wow amazing how well GDP and company revenues are doing when you inflate the prices 30%.”
Spike, google “real GDP vs. nominal GDP” and get back to us.
"GG but what you fail to understand is that GDP is quantity x price."
LOL! It's a little more complicated than that, Spike. Keep studying.
Who's measuring GDP right now? Ha ha..... And if you think that lower productivity numbers are good ...they are not.
Time in the market may give a guy a decent nest egg. This is not the way things are done anymore unless you want to work until you’re 65. There are so many things you can read and tools to use nowadays it’s easy to make money. I started putting into a 401k 20 years ago and will retire in 3 yrs at 55 a wealthy man as in millionaire for just being aggressive since I started. I started with zero dollars also. If Covid wouldn’t have stomped me I’d be retired in a year. It’s available for the taking if you’re willing to work at it. I’m no guru by any means. Just common sense investing.
Shane
spike78's Link
GDP looks flat to me but whatever you Bowsite know it all geniuses say must be right!
So basically the report said that the economy is not as shitty as we thought but shitty none the less.
"So basically the report said that the economy is not as shitty as we thought but shitty none the less."
Not sure how you came to that conclusion, Spike. The GDP report you posted shows an economy growing at a decent clip. Do you understand what "Percentage change from preceding quarter" means?
I told my grandsons, never sell the stocks I have given you, I became a.millionare 3 times, by living cheap, and investing and retired at 57..... Now 75, I have enough money for life. I do donate to charities, but I made my grandsons pay for 25 percent of each stock, so they had skin in th3 game. My daughters got 2 years. That's it of paid tuition, and today make alot of money. Give your kids a free ride, your not helping them.
KB's Link
“If you're investing a lump sum however, better be sure you don't invest it all at once in a "high" cycle..that could take a long time to recover from.”
Good read here bluedog. First-of-the-year lump sum program wins almost 70% of the time against cost averaging. I suppose if we’re talking some sort of windfall or real estate sale, etc I’d agree. But yearly contributions do better in the market vs trickled in on average. I’m a lump sum guy and ‘22 stung a little, though I offset it pretty well with some oil picks. If you want to let me know when the next Jan/Feb high cycle is going to be that would be much appreciated!! :)
“So basically the report said that the economy is not as shitty as we thought but shitty none the less.”
2.8% annual growth is hardly “shitty.” For context, GDP growth rate only exceeded 2.8% one time while Trump was in office (2018 when it hit exactly 3%).
Interesting KB, good article.
However that's the devious part of statistics IMO. 70% of the time lump sum wins.. If you happen to be in the sad 30% it's a different story. Too lazy to look it up but if you lump sum at a top of a market high you can really take a beating. Averaging in can be seen as a form of insurance against those 30% times.
Disclaimer... I haven't practiced either style, I trade the market shorter term. I research enough though to drive most crazy I imagine.. (I don't do fundamentals any more than checking Market cap, earnings date, market sector, about it.. mostly a technical chart guy. ) I never claim I'm doing it the right way , others may well do better.
I’m going to retract my words never mind we are doing just fine ;)
Biden bragging about creating jobs and how robust the stock market and economy is. Is like strangling somebody for five minutes, and then measuring their air intake after you release the chokehold.
Then taking credit for their increased uptake of O2
Unless something happens pretty major between now and January I am planning on a large to me move of money into the SPY and QQQ, 50-50 split. I was planning on metering it in over a year but can't. It has to be a one time move. It's not a big deal I don't think since the money is already in the market. Just crappy things.
KS you mean major like war with Iran and an election and maybe another attempt on Trump? Yeah I may have to take that bet.
Productivity is not growing... That's not good....if the raises given out are because inflation is going great...that's not good... It is increased productivity that is supposed to go hand and with pay raises.
Grey Ghost's Link
"Productivity is not growing..."
Again, not sure where you are getting that info. Over the last 4 quarters, non-farm productivity has risen 2.9%. The largest rise since 2021. Labor costs have risen 0.9% over the last 4 quarters.
Not sure what you’re seeing in that link GG but that looks awful. I could have sworn I read less productivity with more hours worked? Also compare it to a year ago.
What are trying to gauge anyway?
Here’s a good question if boomers are all retiring then the money would be cashed out of the market and being spent correct?
Rusty, like your style, but check out VOO and QQQM. Essentially the same, but lower fees and slightly higher dividend yields.
"Not sure what you’re seeing in that link GG but that looks awful."
Exactly what is awful about a 2.9% rise in productivity in a year with only a 0.9% rise in labor costs? If you were a business owner, wouldn't you be thrilled with that?
Alright you guys ready for my next big stock market bet? Oil. Let the flaming begin
Spike, what's your plan for investing in oil? Are you talking oil futures, exploration, production, refining, or transportation? And what's the basis for your decision to invest in oil?
Long or short oil, spike?
Thanks KB! I appreciate it
Alright you guys ready for my next big stock market bet? Oil. Let the flaming begin
Well did some research and it seems some wealthy people know something may happen and 35 million Exxon shares bought. Hmm my intuition is telling me something. I may take a gamble and go BP due to lower P/E and it has some good news. Also the lower price helps. I’m going to bet on this for end of year. The writing is on the wall.
Hey bluedog, I sent you a private message.
My only debate is so I wait until after earnings that are coming up or buy half now and half after and take a gamble.
I think there are headwinds to oil, particularly if Trump gets elected.
Well did some research and it seems some wealthy people know something may happen and 35 million Exxon shares bought. Hmm my intuition is telling me something. I may take a gamble and go BP due to lower P/E and it has some good news. Also the lower price helps. I’m going to bet on this for end of year. The writing is on the wall.
Damn double posts. Normally I’d say you are right on that BEG but I think they want oil stocks to tank then buy them up. If Trump wins and we go to war with Iran that would normally sound odd but remember that they started the narrative that Trump was on the hit list. I think it’s all bullshit but with the Israeli PM visiting and the news I’d say it’s a done deal.
Where are you getting this 35 million XOM shares bought information? Who bought the shares?
Exxon's total average daily volume is 13 million, so it's highly unlikely someone bought 35 million shares.
Fisher Asset and Exxon and Chevron are now their number 2 and 3 holdings more then all Mag 7 except Nvidia number 1. That is quite odd in my opinion but I’m waiting for you guys to spin it.
Say what you want but oil stocks suck and are rarely moving enough to get excited about except for maybe a war in the Middle East. This fund manager has a minimum of 500k to enter a portfolio and I’m doubtful the elites are excited about oil at the moment unless. But hey it maybe just another conspiracy :)
Spike, why would you bet against the "elites"?
bigeasygator's Link
Not sure if this is behind any kind of paywall or anything, but this Economist article about the state of the oil industry pretty much sums up why Trump’s “Drill baby, Drill” mantra is a fantasy.
BEG, your link pulls up Apple News on my computer. I don't see any article about the oil industry.
GG I’m betting with the elites. I just find it odd that 35,000,000 shares bought of Exxon at 100+ a share wowza. Just looks to me like they are betting on something big to happen. Just sayin take it for what it’s worth.
Yeah, should be an Economist article on Apple News, GG. Here’s the headline…
"GG I’m betting with the elites. I just find it odd that 35,000,000 shares bought of Exxon at 100+ a share wowza."
Again, where are you getting this misinformation? No one bought 35M shares of XOM. The company has roughly a total of 4M shares outstanding. Where did the extra 31M shares come from? Use your brain, Spike.
Spike post the article where you are getting your info on 35 m shares of Exxon being purchased
"The company has roughly a total of 4M shares outstanding."
Have to correct you, XOM has 4.486 B shares outstanding, by my research. You're correct in stating 35M shares is 3 days volume of trades.
There was a volume of 52m on Jun 21, but share price went down. Biggest purchase I can find is a new exec bought $2m worth on Jun 17.
bluedog, you are correct. I forgot 3 decimal places in my calculation. Thanks for the correction.
spike78's Link
Here’s their site and holdings.
spike78's Link
And another and this one shows 26 million shares and also Chevron with millions of shares
This shows there are a lot of different methods in trading. For me this kind of information is only of passing interest, like reading the side of a cereal box. ;)
But whatever works for you is great.
Spike, those are the total holdings of Exxon that Fisher has in their portfolio. They don't represent a one-time recent buy as you stated. Also, note that Exxon represents only 1.4% of the company's portfolio. That said, it is interesting that Exxon and Chevron were their #2 and #3 most increased holdings in the quarter. It appears they basically doubled the size of each during the quarter. Good catch.
Mark this day on your calendar gents!
They doubled their position back in Q1, but they are not their 2nd and 3rd largest holdings. Still don’t see where they bought 35 million shares…
BEG is correct. They doubled their positions in XOM and CVX in Q1, which made those 2 companies the #2 and #3 most increased positions, but they are down the list of the largest holdings Fisher has. MSFT, AAPL, and NVDA occupy the top 3.