Is it time to get out of the market?

[Leeson 54]

46 minutes ago, NorthernVike said:

My Jones rep called me this morning and advised me to get out of my Chinese stocks.  I had Alibaba, Tencent, and Baidu.  I found it interesting that they think there will be enough backlash from the beer flu that it will effect the chink market going forward.  None of the stocks were down that much from the pandemic.  I went ahead with his recommendation.  

Did he make a recommendation on where you should park that money?

 

[peenie 1,915]

3 minutes ago, Leeson said:

Did he make a recommendation on where you should park that money?

 

Peenie's Charles Schwab!!!

Wait!! If you sell your stocks, do you have to pay taxes on those?? Is there a way to avoid having to pay a lot in taxes if you sell all of those stock?

[NorthernVike 2,086]

1 minute ago, Leeson said:

Did he make a recommendation on where you should park that money?

 

He did.  Ringcentral    RNG is the stock symbol.  I haven't had a chance to look into them yet.  They took a shot with the down turn last month bur are already back to and at one point higher than pre crash levels.  For now, I'm putting the moneys into cash as we discussed the possibilities of a second drop in the markets.  His opinion was that they would drop but not quite as low as last month, he's thinking 20,000 range.  We'll wait and see I guess.

[NorthernVike 2,086]

4 minutes ago, peenie said:

Peenie's Charles Schwab!!!

Wait!! If you sell your stocks, do you have to pay taxes on those?? Is there a way to avoid having to pay a lot in taxes if you sell all of those stock?

Yes I'd have to pay tax on the gains but I have an oil stock that shitthebed on me and I have more than enough losses to off set the gains in these stocks.  

[peenie 1,915]

1 minute ago, NorthernVike said:

Yes I'd have to pay tax on the gains but I have an oil stock that shitthebed on me and I have more than enough losses to off set the gains in these stocks.  

Oh...okay thanks!!

[Cdub100 3,907]

3 hours ago, peenie said:

Peenie's Charles Schwab!!!

Wait!! If you sell your stocks, do you have to pay taxes on those?? Is there a way to avoid having to pay a lot in taxes if you sell all of those stock?

Set up a Roth IRA.

AND BUY INDEX FUNDS

[peenie 1,915]

On ‎4‎/‎23‎/‎2020 at 2:48 PM, Patriotsfatboy1 said:

If it were me?  I would put it into QQQ or SPY right now.  Less risky.

3 SPY

They're so expensive.

[Patriotsfatboy1 1,432]

28 minutes ago, peenie said:

3 SPY

They're so expensive.

It is a marathon, not a sprint.  Your best bet is to put aside money each paycheck that you use just to invest.  If you have a 401k with match, then make sure that you are maxing out the match from your company as that is free money and it is long-term investment.  If you have money left over after taking care of your high percentage debt, then squirrel that away each pay period and then buy index funds that you will hang onto long term.

[Leeson 54]

32 minutes ago, peenie said:

3 SPY

They're so expensive.

Also think of that money as being gone. Not that it went to zero, but you don't touch it unless you are retired or are in financial distress. 

Piggybacking on what Patriots said. I tell my kids that it doesn't matter whether the price goes up or down. With an index fund, the odds of it going to zero are nearly impossible. What you want is to own is shares. And as many shares as possible. In order to accumulate shares over your lifetime you want to buy at a discount. That could mean putting money saved into the market during downturns (like we had in mid March. Or, funding a 401k with pretax dollars. 

Once you're 7-10 years of retirement, you can start to formulate a plan on how/when to balance risk. That's when price of shares becomes just as important as the number of shares.

 

[peenie 1,915]

Okay, thank you!! I'll follow your advice.

[Strike 5,538]

1 minute ago, peenie said:

Okay, thank you!! I'll follow your advice.

As I keep telling you, read a book.  The one I recommended does a good job of explaining why you invest in index funds and then take hands off, as well as helping you understand diversification and risk tolerance, two other important concepts to long term investing.

[Mookz 1,346]

Peenor, do you still have your Zoom?  

[peenie 1,915]

16 minutes ago, Strike said:

As I keep telling you, read a book.  The one I recommended does a good job of explaining why you invest in index funds and then take hands off, as well as helping you understand diversification and risk tolerance, two other important concepts to long term investing.

The book is in my Amazon cart. I am buying it. I will read it.

[peenie 1,915]

14 minutes ago, Mookz said:

Peenor, do you still have your Zoom?  

I had 6 but I sold 3 last week. Then the price dropped drastically (due to Facebook announcement), so I'm holding until it goes up a little. Then I'll sell my other 3.

Any advice?

I don't have lots of money like you guys, so I only have a little of this and a little of that.

[Strike 5,538]

3 minutes ago, peenie said:

I don't have lots of money like you guys, so I only have a little of this and a little of that.

This is the reason you don't buy individual stocks like zoom.  That's like playing the lottery.  Your base should be a diversified portfolio of index funds, possibly mixed in with some bond funds.  Even the guys here who talk about buying stocks like cdub, pfb, etc, will tell you that they do that with "play money", not their savings.  They set aside money AFTER funding their 401k and/or index funds to have fun with on individual stocks.  It shouldn't be the first thing you fund, especially if you don't have that much money for investing.

[Leeson 54]

Some experts believe in a 3 fund portfolio. The problem is they don't agree necessarily which 3 funds and how much you should hold in each. (there is also some that think a 4 fund portfolio is a better option). The idea is that you put money into a 3 different funds. Set it and forget it. You add to it and re-balance periodically. But, you don't carry any individual stocks. 

I put together a list of some possible 3 fund portfolios awhile back. These are just some. I think I was looking at what was available to me via my current accounts. There may be others based on your investment firm. 

The one caveat is the TSP. Some believe you should split your stock investment between the C and S funds. But, count them as one group exposure to stocks. 

3 Fund Portfolio

Vanguard ETF

VTI

VXUS

BND

Vanguard Mutual

VTSAX

VTIAX

VBTLX

TSP

C Fund

I Fund

F Fund

S Fund

Other

T Rowe Price (mutual)

POMIX

PIEQX

PBDIX

Schwab (mutual)

SWTSX

SWISX

SWAGX

Schwab (ETF)

SCHB

SCHF

SCHZ

Blackrock (ETF)

ITOT

IXUS

AGG

[Alias Detective 1,400]

3 minutes ago, Leeson said:

Some experts believe in a 3 fund portfolio. The problem is they don't agree necessarily which 3 funds and how much you should hold in each. (there is also some that think a 4 fund portfolio is a better option). The idea is that you put money into a 3 different funds. Set it and forget it. You add to it and re-balance periodically. But, you don't carry any individual stocks. 

I put together a list of some possible 3 fund portfolios awhile back. These are just some. I think I was looking at what was available to me via my current accounts. There may be others based on your investment firm. 

The one caveat is the TSP. Some believe you should split your stock investment between the C and S funds. But, count them as one group exposure to stocks. 

 

3 Fund Portfolio

Vanguard ETF

VTI

VXUS

BND

Vanguard Mutual

VTSAX

VTIAX

VBTLX

TSP

C Fund

I Fund

F Fund

S Fund

Other

T Rowe Price (mutual)

POMIX

PIEQX

PBDIX

Schwab (mutual)

SWTSX

SWISX

SWAGX

Schwab (ETF)

SCHB

SCHF

SCHZ

Blackrock (ETF)

ITOT

IXUS

AGG

So you took total equity, international equity and bonds and created a 3 piece portfolio.  Sound like diversification to me.  

[Leeson 54]

30 minutes ago, Alias Detective said:

So you took total equity, international equity and bonds and created a 3 piece portfolio.  Sound like diversification to me.  

I didn't. These are just a compilation of 3 fund portfolios (available to me) that I found while researching. There are a lot of combinations. But, the principle is pretty much the same. Keep it simple. 

[Leeson 54]

I did some quick research on SP500 returns. Hopefully this makes sense to people that are wondering where to invest. I took the yearly returns for the SP500 dating back to 1928. Some places said the SP500 started in 1957, but I they had data back to 1928.  I then looked at the average 10 year return for by year. The 1930's were a biotch. And those subsequently skewed the late 1930's. early 1940's ten year average. But after that, you can see why it makes sense to put money in an index fund (SP500 fund) and leave it alone. 

There were 4 years where the ten year average was a negative return (red). The worst was negative 1%.

There were 14 years where the ten year average was between .01 and 3.99% (lightest green)

There were 17 years where the ten year average was between 4 and 6.99% (medium green)

There were 48 years where the ten year average was between 7 and 16.9% (dark green)

Arguably some of the lowest ten year averages were in the late 30's and still being weighed down by the depression era numbers.

Year	Annual % Change	Avg 10 year
2019	28.88%	11.81%
2018	-6.24%	11.26%
2017	19.42%	8.04%
2016	9.54%	6.45%
2015	-0.73%	6.86%
2014	11.39%	7.23%
2013	29.60%	6.99%
2012	13.41%	6.67%
2011	0.00%	2.99%
2010	12.78%	1.69%
2009	23.45%	-0.61%
2008	-38.49%	-1.00%
2007	3.53%	5.52%
2006	13.62%	8.27%
2005	3.00%	8.93%
2004	8.99%	12.04%
2003	26.38%	10.99%
2002	-23.37%	9.06%
2001	-13.04%	11.84%
2000	-10.14%	15.77%
1999	19.53%	16.13%
1998	26.67%	16.90%
1997	31.01%	15.48%
1996	20.26%	12.58%
1995	34.11%	12.01%
1994	-1.54%	11.24%
1993	7.06%	11.53%
1992	4.46%	12.55%
1991	26.31%	13.58%
1990	-6.56%	9.98%
1989	27.25%	13.21%
1988	12.40%	11.72%
1987	2.03%	10.58%
1986	14.62%	9.23%
1985	26.33%	9.68%
1984	1.40%	10.20%
1983	17.27%	7.09%
1982	14.76%	3.63%
1981	-9.73%	3.72%
1980	25.77%	5.77%
1979	12.31%	3.20%
1978	1.06%	0.83%
1977	-11.50%	1.49%
1976	19.15%	4.65%
1975	31.55%	1.43%
1974	-29.72%	-0.82%
1973	-17.37%	3.45%
1972	15.63%	7.07%
1971	10.79%	4.33%
1970	0.10%	5.56%
1969	-11.36%	5.26%
1968	7.66%	7.24%
1967	20.09%	10.28%
1966	-13.09%	6.84%
1965	9.06%	8.41%
1964	12.97%	10.15%
1963	18.89%	13.35%
1962	-11.81%	10.80%
1961	23.13%	13.16%
1960	-2.97%	12.49%
1959	8.48%	14.97%
1958	38.06%	15.15%
1957	-14.31%	11.27%
1956	2.62%	12.71%
1955	26.40%	11.26%
1954	45.02%	11.69%
1953	-6.62%	8.57%
1952	11.78%	11.17%
1951	16.46%	11.24%
1950	21.78%	7.81%
1949	10.26%	4.10%
1948	-0.65%	2.53%
1947	0.00%	5.11%
1946	-11.87%	1.26%
1945	30.72%	5.23%
1944	13.80%	6.30%
1943	19.45%	4.33%
1942	12.43%	7.04%
1941	-17.86%	4.28%
1940	-15.29%	1.36%
1939	-5.45%	0.04%
1938	25.21%	-0.61%
1937	-38.59%	0.66%
1936	27.92%
1935	41.37%
1934	-5.94%
1933	46.59%
1932	-15.15%
1931	-47.07%
1930	-28.48%
1929	-11.91%
1928	37.88%

[bandrus1 413]

I hope some of you were not chicken like me and loaded up on AMC under 2.50 

[peenie 1,915]

Can anyone explain in simple easy terms what the following are exactly?

NASDAQ

NYSE

DOW

S&P 500

(I know I can Google it, but some of you will give a clearer, shorter answer)

[bandrus1 413]

They are groups of stocks that qualify to be included basically based on their quality. The Dow price is the price of 1 share of all included.

 

NASDAQ tend to be tech based generally

 

That's a very basic

[Cdub100 3,907]

 

 

 

30 minutes ago, peenie said:

Can anyone explain in simple easy terms what the following are exactly?

NASDAQ

NYSE

DOW

S&P 500

(I know I can Google it, but some of you will give a clearer, shorter answer)

NASDAQ - A computer system where stocks are traded. It's also an index fund.

NYSE - The other system where stocks are traded. 

*Your broker uses both*

DOW - This is an index fund made up of the 30 largest companies in the US

S&P 500 - Same as the dow but made up of 500 companies

[vuduchile 1,945]

Trolls earned $100M by releasing straight to on demand.  AMC refuses to buy from Universal.  
 

How are the AMC investors feeling about this?

https://www.yahoo.com/entertainment/amc-refuses-play-universal-films-015726351.html

[Patriotsfatboy1 1,432]

@peenie - are you seeing about market volatility with certain stocks?  ZM is all over the place, where you will get much smaller swings with index funds like SPY and QQQ.  

[bandrus1 413]

7 minutes ago, vuduchile said:

Trolls earned $100M by releasing straight to on demand.  AMC refuses to buy from Universal.  
 

How are the AMC investors feeling about this?

https://www.yahoo.com/entertainment/amc-refuses-play-universal-films-015726351.html

Trolls him the market perfect there is limited entertainment options and kids stuck home

 

I find it had to believe universal does not want their 4 future Harry Potter based movies in theater 

[Hardcore troubadour 15,424]

We watched the new Trolls when it came out. 20 Bucks, around 5  bucks for treats. Worked out great. We now schedule movie night every  Saturday. Gives the kids something to look forward to. 

[NorthernVike 2,086]

As we approach 25,000 on the DOW again, I am seriously considering reducing my position on all of my positive stocks if not selling them all.  I am thinking of holding onto my oil stocks that are already in the shitter.  

 

Bad news will be the norm for businesses over the next year and I think we'll test the March lows.  

 

Convince me otherwise.  

[peenie 1,915]

1 hour ago, Patriotsfatboy1 said:

@peenie - are you seeing about market volatility with certain stocks?  ZM is all over the place, where you will get much smaller swings with index funds like SPY and QQQ.  

Oh no...it's going so down.....

Bless you for telling me to sell some the other day! I should've sold all of them. I'll watch and sell soon and buy more SPY QQQ, thank you so much for looking out!!!!

Sold ZM bought 3 QQQ

[Leeson 54]

1 hour ago, NorthernVike said:

As we approach 25,000 on the DOW again, I am seriously considering reducing my position on all of my positive stocks if not selling them all.  I am thinking of holding onto my oil stocks that are already in the shitter.  

 

Bad news will be the norm for businesses over the next year and I think we'll test the March lows.  

 

Convince me otherwise.  

I can't. I think you're correct that we will continue to see negative quarterly numbers.

The only positive, if you can call it that, is that Trump will not allow the economy, or more specifically, the stock market remain down. The government will continue to pump money into the market and prop up struggling companies. The issue is the second wave of the virus could come in the fall. It could have negative impact on Trumps ability to get elected. If there is no vaccine and the Dems are in the White House in January, there will be a shift from protecting businesses to protecting everyone else. More money will be spent and the economy will still sputter. 

We haven't even seen the full impact of this virus on the economy, yet the market continues to climb. At this rate, it will be back to (or above) the highs we were seeing in January. It defies logic. If I was to put on my tinfoil hat, I'd say that the 1% is manipulating the stock market with the assistance of the government. It's the largest pump and dump before the big crash that finally hits us all on the head with a shovel and puts us out of our misery.

[Cdub100 3,907]

 

 

 

2 hours ago, NorthernVike said:

As we approach 25,000 on the DOW again, I am seriously considering reducing my position on all of my positive stocks if not selling them all.  I am thinking of holding onto my oil stocks that are already in the shitter.  

 

Bad news will be the norm for businesses over the next year and I think we'll test the March lows.  

 

Convince me otherwise.  

This is all you need to know.

https://brrr.money/open-graph.png

[NorthernVike 2,086]

18 minutes ago, Cdub100 said:

This is all you need to know.

https://brrr.money/open-graph.png

I'm not sold on the assumption that the FED can print us out of the troubles ahead.  Yes the government will keep printing money but when sentiment turns, it will get ugly no matter what.

 

[vuduchile 1,945]

3 hours ago, bandrus1 said:

Trolls him the market perfect there is limited entertainment options and kids stuck home

 

I find it had to believe universal does not want their 4 future Harry Potter based movies in theater 

 

3 hours ago, Hardcore troubadour said:

We watched the new Trolls when it came out. 20 Bucks, around 5  bucks for treats. Worked out great. We now schedule movie night every  Saturday. Gives the kids something to look forward to. 

I still think HT's way will increasingly become the new normal.  Until there's a drug that can zap this thing, many people won't feel comfortable in any size crowd.  

[Cdub100 3,907]

12 minutes ago, NorthernVike said:

I'm not sold on the assumption that the FED can print us out of the troubles ahead.  Yes the government will keep printing money but when sentiment turns, it will get ugly no matter what.

 

I think people believe the economy will come roaring back. You can see that anytime the littlest good news is posted.

[Strike 5,538]

2 minutes ago, Cdub100 said:

I think people believe the economy will come roaring back. You can see that anytime the littlest good news is posted.

I do.  If we ever get things opened up again. 

[NorthernVike 2,086]

34 minutes ago, Cdub100 said:

I think people believe the economy will come roaring back. You can see that anytime the littlest good news is posted.

I don't know.  Many will be behind on bills, jobs will be lost not just laid off.  I hope I'm wrong but I see the recovery taking 2 to 3 years at the earliest.  

[Leeson 54]

28 minutes ago, Strike said:

I do.  If we ever get things opened up again. 

I don't. I think everyone is off on their math.

If company A was worth $10 in January, and the economy shut down from March, April, May, that company would be worth roughly $7.50. As it stands, everyone is buying stocks as if it's worth $11 now and will be worth $15 on June 1st. 

You can't shut off the greatest single factor that makes up a companies value, and then not adjust the valuation of the stock. 

Looking at stocks like AAPL, they already stated that sales were going to be down until late 3rd or 4th quarter. Yet they went up over 3% today. It makes no sense. I have a feeling everyone is buying on speculation. Best case scenario, the virus remains under control as states open up and stocks are over valuated. Worst case scenario, we see a second wave that piles on losses in quarters 3 and 4, and we see a pull back much deeper than mid March.

[bandrus1 413]

2 minutes ago, NorthernVike said:

I don't know.  Many will be behind on bills, jobs will be lost not just laid off.  I hope I'm wrong but I see the recovery taking 2 to 3 years at the earliest.  

I think it will take years for average people but for big publicly traded companies this will be great. 

[Cdub100 3,907]

2 minutes ago, NorthernVike said:

I don't know.  Many will be behind on bills, jobs will be lost not just laid off.  I hope I'm wrong but I see the recovery taking 2 to 3 years at the earliest.  

Maybe, and I think the market built that in. I'm bullish in this market right now.

[Cdub100 3,907]

2 minutes ago, Leeson said:

I don't. I think everyone is off on their math.

If company A was worth $10 in January, and the economy shut down from March, April, May, that company would be worth roughly $7.50. As it stands, everyone is buying stocks as if it's worth $11 now and will be worth $15 on June 1st. 

You can't shut off the greatest single factor that makes up a companies value, and then not adjust the valuation of the stock. 

Looking at stocks like AAPL, they already stated that sales were going to be down until late 3rd or 4th quarter. Yet they went up over 3% today. It makes no sense. I have a feeling everyone is buying on speculation. Best case scenario, the virus remains under control as states open up and stocks are over valuated. Worst case scenario, we see a second wave that piles on losses in quarters 3 and 4, and we see a pull back much deeper than mid March.

I'm an idiot investor so here is the perspective of an idiot dividend investor.

When I look at a stock like 3M $MMM I see in January they were worth $240+. I bought three tranches in late March and early April at $118, $133, & 148. Currently, it's at $156. Now if 3M was worth 240+ in January why shouldn't I expect them to get back there? 

You can do that with lots of stocks. Everyone wanted a sale and when it happened they tried to time the recovery. Hell, I was doing the same thing. Go look at how many times in the last 30 days I said I wanted to get out of the market. The only regret I have was selling my CCL and RCL positions.

Bottom line everyone knows the recovery will take a while. So I consider that priced in. We also know the Fed makes the money machine go brrrr. To me when that stops or slows we will see a drop, but not until then.