All things STOCKS

[Thunder Good-Oil]

Totally understand that. I wouldn’t be in bonds either. I’m just saying that makes more sense than leaving cash in a checking account right now.

ST debt won’t crash. But checking at 0% beats 10 year at 1% or 2% that can lose market value with rate hikes. Interest rates have a long way to go before I would be buying any LT debt. Financials are different though. I’d buy many of them in a rising rate environment. I can’t think of an industry in the financial sector that I would avoid with interest rates on the rise. Maybe a trader can chime in. I would think that mortgage companies, big/small/regional banks, insurance, brokers, etc would all benefit from higher rates.

 

[walkenvol]

Totally understand that. I wouldn’t be in bonds either. I’m just saying that makes more sense than leaving cash in a checking account right now.

Unless you think we’re in a bubble that’s about to burst?

 

[Kingston Vol]

Unless you think we’re in a bubble that’s about to burst?

Just think it’s dangerous to try and time the market. I’d much rather buy and hold through it.

I’m not saying having cash on hand is bad, just that having too much of it is bad.

 

[walkenvol]

Just think it’s dangerous to try and time the market. I’d much rather buy and hold through it.

I’m not saying having cash on hand is bad, just that having too much of it is bad.

That’s fair

 

[mrorange211]

I still think the Fed takes the market down in Sept to force the passage of the budget bill.

 

[Go aeiou]

I still think the Fed takes the market down in Sept to force the passage of the budget bill.

If we have inflation the Fed might raise rates. That might cause the market to decline.
I see a longer slow decline for the market as people move from stocks to bonds. Possibly 10 years.
Not sure the Fed is interested in the Budget. They just deal with what they get.

 

[mrorange211]

Yellen and Powell and in tandem. She said she need $6 trillion. An engineered correction in Sept is just what the Dr. ordered to scare those remaining D Senators into voting Yes.

 

[Thunder Good-Oil]

VMware is on sale today.

 

[Thunder Good-Oil]

I’d like VMware a lot more if Michael Dell was distanced from the company. I don’t trust that snake to do what is best for the shareholders.

 

[Kingston Vol]

If we have inflation the Fed might raise rates. That might cause the market to decline.
I see a longer slow decline for the market as people move from stocks to bonds. Possibly 10 years.
Not sure the Fed is interested in the Budget. They just deal with what they get.

When you say “decline”, do you mean back to normal average returns?

 

[Carp]

Most of my "investments" have gone pretty poorly over the last 2 months. Probably down 10%-20% there. But my day trading has gone pretty well. Sitting on roughly 50% cash at the moment and using that to day trade. I've come out ahead in every trade this month (sometimes only 1%-2% but hey profit is profit right?) I've raised my cash holdings 16% over this time.

 

[Thunder Good-Oil]

Most of my "investments" have gone pretty poorly over the last 2 months. Probably down 10%-20% there. But my day trading has gone pretty well. Sitting on roughly 50% cash at the moment and using that to day trade. I've come out ahead in every trade this month (sometimes only 1%-2% but hey profit is profit right?) I've raised my cash holdings 16% over this time.

I’ll take 2% every month. I don’t think that Berkshire Hathaway matched that over the 20 or so years that they exploded. Tricky part is to get +2% in months when equities go into the ****ter. But 18-20% annually for a couple of decades and BOOM!

 

[Go aeiou]

When you say “decline”, do you mean back to normal average returns?

I used decline 2 times. No I do not think returns will be average normal, A reasonable, normal return for bonds will cause many people to move from the stock market to bonds, and there will be more supply than demand in the stock market.That should cause a decline.

It is also possible that the stock market is overvalued now. Many people believe it is. We have had long periods of several years in the past where the stock market has lost value or gone sideways. Look at a graph of the last 100 years of the Dow.
Look at the Dow from 65 to 83. It finally got back to 65 levels in 90,95, that's 25+ years. I recall a lot of agony in the 70s.
29 to 58, 59 was similar. That is a lot of years, and we currently have been in a long bull market.

Dow Jones - DJIA - 100 Year Historical Chart

Still there are always things that can effect the market. War is often good for the market (see WW2) while a very large decline in the human population would be devastating. Not really material, but the US has a very low birth rate. We are depending on immigration to expand our population and economy. A pandemic with an extreme number of deaths would be catastrophic to the economy.

So for me diversification means stocks, bonds, cash, and real estate. OTOH, I've seen each of those tank except for cash. Things might change from "how much can I make?" To "how little can I lose?".

I have been fortunate in my life. I started investing in Stocks in the early 80s when I was 30, and the market has basically risen ever since. The. Biggest reason I' ve made money in stocks is DUMB Luck. Right place, right time. A degree in Finance might have helped a little.

 

[Thunder Good-Oil]

I used decline 2 times. No I do not think returns will be average normal, A reasonable, normal return for bonds will cause many people to move from the stock market to bonds, and there will be more supply than demand in the stock market.That should cause a decline.

It is also possible that the stock market is overvalued now. Many people believe it is. We have had long periods of several years in the past where the stock market has lost value or gone sideways. Look at a graph of the last 100 years of the Dow.
Look at the Dow from 65 to 83. It finally got back to 65 levels in 90,95, that's 25+ years. I recall a lot of agony in the 70s.
29 to 58, 59 was similar. That is a lot of years, and we currently have been in a long bull market.

Dow Jones - DJIA - 100 Year Historical Chart

Still there are always things that can effect the market. War is often good for the market (see WW2) while a very large decline in the human population would be devastating. Not really material, but the US has a very low birth rate. We are depending on immigration to expand our population and economy. A pandemic with an extreme number of deaths would be catastrophic to the economy.

So for me diversification means stocks, bonds, cash, and real estate. OTOH, I've seen each of those tank except for cash. Things might change from "how much can I make?" To "how little can I lose?".

I have been fortunate in my life. I started investing in Stocks in the early 80s when I was 30, and the market has basically risen ever since. The. Biggest reason I' ve made money in stocks is DUMB Luck. Right place, right time. A degree in Finance might have helped a little.

I don’t put a lot of credence in stock market valuations before the 1990s when comparing to the more recent valuations. Trading was much lighter and non-transparent. Today volumes are enormous, participation by individuals is much more prevalent, and information is far more robust and distributed.

Today, price anomalies are widely reported and quickly acted upon. It was a much sleepier system pre-internet. Transaction fees were large instead of non-existent. Mutual funds were a novelty and ETFs and similar investment vehicles were in early stages of development.

The daily, and other short term valuations, are what really diverge in the two time frames. Ultimately prices normalize after historical earnings, revenue, debt, and other measures are published. But the time frame for distribution of that information is vastly different. Bargains (suppressed equity prices) were more prevalent and regressions to the norm were considerably slower.

 

[Kingston Vol]

I used decline 2 times. No I do not think returns will be average normal, A reasonable, normal return for bonds will cause many people to move from the stock market to bonds, and there will be more supply than demand in the stock market.That should cause a decline.

It is also possible that the stock market is overvalued now. Many people believe it is. We have had long periods of several years in the past where the stock market has lost value or gone sideways. Look at a graph of the last 100 years of the Dow.
Look at the Dow from 65 to 83. It finally got back to 65 levels in 90,95, that's 25+ years. I recall a lot of agony in the 70s.
29 to 58, 59 was similar. That is a lot of years, and we currently have been in a long bull market.

Dow Jones - DJIA - 100 Year Historical Chart

Still there are always things that can effect the market. War is often good for the market (see WW2) while a very large decline in the human population would be devastating. Not really material, but the US has a very low birth rate. We are depending on immigration to expand our population and economy. A pandemic with an extreme number of deaths would be catastrophic to the economy.

So for me diversification means stocks, bonds, cash, and real estate. OTOH, I've seen each of those tank except for cash. Things might change from "how much can I make?" To "how little can I lose?".

I have been fortunate in my life. I started investing in Stocks in the early 80s when I was 30, and the market has basically risen ever since. The. Biggest reason I' ve made money in stocks is DUMB Luck. Right place, right time. A degree in Finance might have helped a little.

Understood. I think we’re definitely ripe for a correction. Could even last a few years. But the correction will correct itself over time.

I guess all that really matters in this context is where you are on your investment horizon. I haven’t hit 30 yet, so my money is better served in the market no matter any short term pain. But I could see someone with a huge number in their brokerage account (which I don’t have yet) getting spooked and starting to transition out.

I don’t know. I have yet to see or anticipate anything that makes me think it’s still not most beneficial to invest in American companies. That could certainly change.

 

[Go aeiou]

Understood. I think we’re definitely ripe for a correction. Could even last a few years. But the correction will correct itself over time.

I guess all that really matters in this context is where you are on your investment horizon. I haven’t hit 30 yet, so my money is better served in the market no matter any short term pain. But I could see someone with a huge number in their brokerage account (which I don’t have yet) getting spooked and starting to transition out.

I don’t know. I have yet to see or anticipate anything that makes me think it’s still not most beneficial to invest in American companies. That could certainly change.

That was my attitude In The early 80s (born in 52). I Put about 40% of my money in Vanguard S&P fund. Not sure of the Name. The rest in individual stocks.
As you say "investment horizon".
I'm still 85+% American , but have worldwide fund, Europe fund, Pacific fund and emerging markets fund. Mainly for diversification.
Buy and hold is extremely difficult for most investors. It should be buy and buy more during deep downturns. People tend to panic, and sell.

 

[Thunder Good-Oil]

Understood. I think we’re definitely ripe for a correction. Could even last a few years. But the correction will correct itself over time.

I guess all that really matters in this context is where you are on your investment horizon. I haven’t hit 30 yet, so my money is better served in the market no matter any short term pain. But I could see someone with a huge number in their brokerage account (which I don’t have yet) getting spooked and starting to transition out.

I don’t know. I have yet to see or anticipate anything that makes me think it’s still not most beneficial to invest in American companies. That could certainly change.

Those with equity investments might be getting spooked, but without alternatives I’m not expecting a mass exodus from those equity positions into other options. 0% in money market securities loses value in an inflationary environment. Private equity, hedge funds, and other alternatives should be popular which is why I will maintain positions in BlackRock, BlackStone, and Morgan-Stanley and will be considering adding other sticks of companies that profit from those products.

 

[walkenvol]

Understood. I think we’re definitely ripe for a correction. Could even last a few years. But the correction will correct itself over time.

I guess all that really matters in this context is where you are on your investment horizon. I haven’t hit 30 yet, so my money is better served in the market no matter any short term pain. But I could see someone with a huge number in their brokerage account (which I don’t have yet) getting spooked and starting to transition out.

I don’t know. I have yet to see or anticipate anything that makes me think it’s still not most beneficial to invest in American companies. That could certainly change.

I think you’ve got the right idea. I started investing 37 years back and have now quit working for a paycheck. Looking back I’ve tried different approaches, but the key was to keep buying whether it was up or down. The compound growth is what wins long term. I’m to the point where there’s plenty to live on, but not if we give 50%+ back so I’m trying to figure out the best approach in this new stage of investing life. Stay your course - your on the right track!

 

[Thunder Good-Oil]

I think you’ve got the right idea. I started investing 37 years back and have now quit working for a paycheck. Looking back I’ve tried different approaches, but the key was to keep buying whether it was up or down. The compound growth is what wins long term. I’m to the point where there’s plenty to live on, but not if we give 50%+ back so I’m trying to figure out the best approach in this new stage of investing life. Stay your course - your on the right track!

Before ETFs, I had a finance professor say that you should own 15-20 different stocks. I didn’t follow that philosophy and have had just a handful of really good picks that have done well for me. I have more like 75-100 individual stocks. Overall, the index based funds I own have done as well or better than 80% of my LT stock buys. But it is difficult to evaluate with the various dividends, cap gains distributions, and reorganizations (I have stuff that I avoid selling just because I dread doing the research to figure out my cost basis).

 

[walkenvol]

Before ETFs, I had a finance professor say that you should own 15-20 different stocks. I didn’t follow that philosophy and have had just a handful of really good picks that have done well for me. I have more like 75-100 individual stocks. Overall, the index based funds I own have done as well or better than 80% of my LT stock buys. But it is difficult to evaluate with the various dividends, cap gains distributions, and reorganizations (I have stuff that I avoid selling just because I dread doing the research to figure out my cost basis).

I have a coupe of 30 year holdings that I’ve had on dividend reinvestment (HD KO). Initially were 20 shares of each and now are a few hundred. No idea how to go about figuring a cost basis so I’ve started gifting shares of KO when I want to make a donation somewhere.

 

[Go aeiou]

I think you’ve got the right idea. I started investing 37 years back and have now quit working for a paycheck. Looking back I’ve tried different approaches, but the key was to keep buying whether it was up or down. The compound growth is what wins long term. I’m to the point where there’s plenty to live on, but not if we give 50%+ back so I’m trying to figure out the best approach in this new stage of investing life. Stay your course - your on the right track!

Does a Conversion to a Roth work for you?

 

[TheColdVolTruth]

AFRM up 40% pm on the AMZN news. This would give them a market cap near $25B. I remember SQ acquiring one of these buy now/pay later companies a few months ago, and I think PYPL offers a similar service. I don't really see the appeal of the business, but that's quite a move. It seems like something the legacy banks/credit card companies could easily move into. Maybe they partner with CMG next to let people pay for their burrito with four easy installments.

 

[walkenvol]

Does a Conversion to a Roth work for you?

I’ve started this year but at this point am only converting up to the cap of the 12% tax bracket. I think we’ve had this discussion before in trying to determine if it’s prudent to expand into the 22% and higher brackets. Barring an awful decade plus market run I’ll never get everything into a ROTH without paying the higher taxes before RMD’s start in 13 years. I’ve read and researched tons and still don’t know the best choice there. Giving up potential growth on 1/4th of your money for 10-35 years has to be very compelling to make that leap

 

[walkenvol]

Why the Fed is about to stop the party on Wall Street (and what it means for you) — CNN Business

TIFWIW

 

[Go aeiou]

I’ve started this year but at this point am only converting up to the cap of the 12% tax bracket. I think we’ve had this discussion before in trying to determine if it’s prudent to expand into the 22% and higher brackets. Barring an awful decade plus market run I’ll never get everything into a ROTH without paying the higher taxes before RMD’s start in 13 years. I’ve read and researched tons and still don’t know the best choice there. Giving up potential growth on 1/4th of your money for 10-35 years has to be very compelling to make that leap

Ha, yes we have. My memory sucks.
I'm going to 22% with my conversion this year, but not too much so it doesn't effect my Medicare premiums.