Stocks and the marketplace

[+ azdr0710]

Way back in the 1950s, my then-early 20s mother was just starting a career/job as a stewardess......she asked a prosperous-looking first-class passenger if he had any stock tips......he recommended a small company in St. Paul called Minnesota Mining and Manufacturing.......unfortunately, she didn't take the advice.....

[DallasClient]

I am not good at the market, if you have enough in Fidelity, they have a great private wealth management service where they actively buy and sell for you. It's done very well for me.

[Guest]

I am not good at the market, if you have enough in Fidelity, they have a great private wealth management service where they actively buy and sell for you. It's done very well for me.

I would counsel against a lot of buying and selling, unless you're quite sure you aren't being charged, and even then, almost no one outperforms the market. Most good books on investing will tell you to buy broad-based low-fee mutual funds/ETF's, and hold. Don't invest any money in the market you feel you might need in the next 10 years, because it can take many years to make up for a crash, and you do not ever want to sell in a bear market.

[Guest]

Here’s an illustration that if you missed the 10 best days in the market by trying to time, then you cut your return in half vs “buy and hold”

 

https://www.putnam.com/literature/pdf/II508-85e97e7dc6cd90e0c0cc2e1eeccdf00d.pdf

 

Timing only works if you have a crystal ball...

[roberysmit]

Stocks and bonds are excellent investment methods! Because this is a time-tested way to make money on your existing funds. And yes, the pharmaceutical industry is very relevant now, given that the prices of medicines and medical equipment are growing every year. I am not an expert in this matter yet, and I am just going through training on the forex. Still, I already understand that pharmacology is one of the most successful types of business, which means that investments in pharmacology will be very profitable.

Edited February 15, 2022 by roberysmit

[+ Cash4Trash]

On 1/6/2021 at 12:48 PM, azdr0710 said:

Way back in the 1950s, my then-early 20s mother was just starting a career/job as a stewardess......she asked a prosperous-looking first-class passenger if he had any stock tips......he recommended a small company in St. Paul called Minnesota Mining and Manufacturing.......unfortunately, she didn't take the advice.....

Knew Bobby Short the entertainer a bit and he once mentioned that when he first arrived in New York and started making money a friend suggested he buy stock in a very new company, IBM. He took the advice.

[+ Charlie]

I don't believe in playing with things that I don't really understand and could make costly mistakes. I don't service my own car, and I don't invest my own money. I was lucky that when I started working at 23, one of the contractual requirements my employer made was that employees join a TIAA-CREF retirement plan, in which we had to invest a set percentage of our paycheck, and the employer would match it. I left everything in their hands, and I retired at 59 with a very comfortable income which has remained steady through all kinds of economic ups and downs.

When my spouse got a jump in salary thirty-five years ago, he decided he needed a financial advisor, and he found one through a recommendation from a friend. Several years later, he unexpectedly inherited a substantial sum, and he turned that over to the advisor as well. Nick kept the investments growing, not dramatically but steadily, and we left everything in his hands. He was an independent advisor, but he worked through Schwab. When Nick announced last year that he was retiring at 82, I panicked for a moment, but he recommended that we move everything to an independent advisor whom he had known for years and trusted absolutely. Rather than try to find someone on my own, or--heaven forbid!--try to manage it myself, we moved it all to the new guy. So far, so good, but he does seem to want us to be more involved in investment decisions than we were with Nick, and I am really not too comfortable with that.

BTW, because I am an old-fashioned type who was raised by working class parents, I think all those brokerage numbers on paper are nice to look at, but I never think of them as REAL money, so I always keep a stash of cash in traditional bank accounts, which would probably horrify an advisor.

[+ Charlie]

On 1/6/2021 at 9:48 AM, azdr0710 said:

Way back in the 1950s, my then-early 20s mother was just starting a career/job as a stewardess......she asked a prosperous-looking first-class passenger if he had any stock tips......he recommended a small company in St. Paul called Minnesota Mining and Manufacturing.......unfortunately, she didn't take the advice.....

Years ago, a friend of mine had a relation who worked for a pharmaceutical company. He told her she should invest some money in the company, because it was working on a new drug that would be a big seller. She was reluctant to take a chance, so she didn't do it. She told me, "I think he's wrong about it selling well, because I don't like the sound of the name--it's called Viagra."

[+ WilliamM]

19 minutes ago, Charlie said:

Years ago, a friend of mine had a relation who worked for a pharmaceutical company. He told her she should invest some money in the company, because it was working on a new drug that would be a big seller. She was reluctant to take a chance, so she didn't do it. She told me, "I think he's wrong about it selling well, because I don't like the sound of the name--it's called Viagra."

Years ago, like 1950?

[Rudynate]

I think I could make a lot of money managing my own investments if I studied the topic a little bit.  I don't feel like doing that so I have a professional managing my investments for me.   He does a good job.  We definitely will not be eating cat food when I retire. Maybe when I retire, I will take over management of my portfolio. 

 

Smartest thing I ever did was going to all cash about two weeks before the market crash in 2008.  I had been trading actively earlier in the year and was doing well.  As the market became more volatile, it became harder to make any money - the market just moved too fast.   I read an article somewhere that said even professional fund managers taking a break  because even they couldn't handle that kind of volatility.  I asked myself, "if professional fund managers cant handle this market, what am I doing in it?"  I sold everything.  The market crashed a couple weeks later.

[+ Charlie]

2 hours ago, WilliamM said:

Years ago, like 1950?

No, about 30 years ago.

[+ bashful]

1 hour ago, Charlie said:

No, about 30 years ago.

Curious, was that when it was still being developed as a blood pressure med, or it’s current use?

[+ FrankR]

7 hours ago, Charlie said:

I don't believe in playing with things that I don't really understand and could make costly mistakes. I don't service my own car, and I don't invest my own money. I was lucky that when I started working at 23, one of the contractual requirements my employer made was that employees join a TIAA-CREF retirement plan, in which we had to invest a set percentage of our paycheck, and the employer would match it. I left everything in their hands, and I retired at 59 with a very comfortable income which has remained steady through all kinds of economic ups and downs.

When my spouse got a jump in salary thirty-five years ago, he decided he needed a financial advisor, and he found one through a recommendation from a friend. Several years later, he unexpectedly inherited a substantial sum, and he turned that over to the advisor as well. Nick kept the investments growing, not dramatically but steadily, and we left everything in his hands. He was an independent advisor, but he worked through Schwab. When Nick announced last year that he was retiring at 82, I panicked for a moment, but he recommended that we move everything to an independent advisor whom he had known for years and trusted absolutely. Rather than try to find someone on my own, or--heaven forbid!--try to manage it myself, we moved it all to the new guy. So far, so good, but he does seem to want us to be more involved in investment decisions than we were with Nick, and I am really not too comfortable with that.

BTW, because I am an old-fashioned type who was raised by working class parents, I think all those brokerage numbers on paper are nice to look at, but I never think of them as REAL money, so I always keep a stash of cash in traditional bank accounts, which would probably horrify an advisor.

There is certainly a lot of wisdom in "start early" - so I encourage all my younger friends to start investing as soon as they get that first steady job.  And regardless of age, there is also wisdom in keeping a good chunk of cash around - even if it just makes you sleep better, it is worth it.

If you are not comfortable taking the reins yourself, it certainly makes a lot of sense to hire a profession...as long as you are comfortable that the advisor is a fiduciary who agrees and demonstrates the will to put your interests first.  There are a number of education opportunities for those that do feel like they want to learn more - ultimately nobody will care about your money as much as you will, so getting a baseline knowledge built isn't a bad idea.  🙂

[+ Charlie]

24 minutes ago, bashful said:

Curious, was that when it was still being developed as a blood pressure med, or it’s current use?

They had realized that its effects had other possibilities, but it had not yet been approved for erectile dysfunction.

[+ bashful]

1 minute ago, Charlie said:

They had realized that its effects had other possibilities, but it had not yet been approved for erectile dysfunction.

Should have jumped on it….hehehe

[Kevin Slater]

34 minutes ago, FrankR said:

There is certainly a lot of wisdom in "start early" - so I encourage all my younger friends to start investing as soon as they get that first steady job.  And regardless of age, there is also wisdom in keeping a good chunk of cash around - even if it just makes you sleep better, it is worth it.

If you are not comfortable taking the reins yourself, it certainly makes a lot of sense to hire a profession...as long as you are comfortable that the advisor is a fiduciary who agrees and demonstrates the will to put your interests first.  There are a number of education opportunities for those that do feel like they want to learn more - ultimately nobody will care about your money as much as you will, so getting a baseline knowledge built isn't a bad idea.  🙂

Keep in mind that 90% of money managers underperform the market (and charge for the privilege).  A broad-based low fee mutual fund is your best friend. 

Kevin Slater

[+ bigjoey]

18 minutes ago, Kevin Slater said:

Keep in mind that 90% of money managers underperform the market (and charge for the privilege).  A broad-based low fee mutual fund is your best friend. 

Kevin Slater

Specifically, an index fund.

[BeamerBikes]

Semi-related.... anyone parking some coin in US Gov I-Bonds?  7% return semi annual isn't a bad option to park the near line emergency funds. 

Cons

Limited to 10k/year

Gotta hold for 1 year

1 year - 5 year you have a 3 month interest penalty to cash out. 

[Kevin Slater]

8 hours ago, BeamerBikes said:

Semi-related.... anyone parking some coin in US Gov I-Bonds?  7% return semi annual isn't a bad option to park the near line emergency funds. 

Cons

Limited to 10k/year

Gotta hold for 1 year

1 year - 5 year you have a 3 month interest penalty to cash out. 

Another con:  that 7.12% isn't fixed.  It adjusts every six months, and the current offerings have a base-rate of 0% (the 7.12% is all dependent on inflation, as opposed to some earlier issues I hold which have a base-rate of 1.4%-- thus currently earning 8.57%). 

You can bump that to $15k per year if you choose to have $5k of a tax refund sent in the form of paper I-bond.

Now that it's back on my radar, I may max out again this year.

Kevin Slater

[+ bigjoey]

36 minutes ago, Kevin Slater said:

Another con:  that 7.12% isn't fixed.  It adjusts every six months, and the current offerings have a base-rate of 0% (the 7.12% is all dependent on inflation, as opposed to some earlier issues I hold which have a base-rate of 1.4%-- thus currently earning 8.57%). 

You can bump that to $15k per year if you choose to have $5k of a tax refund sent in the form of paper I-bond.

Now that it's back on my radar, I may max out again this year.

Kevin Slater

If you hold a high dividend yielding stock in an IRA, tax free account, you can get a high yield that compounds over time. Eventually, you MAY have to pay taxes on those dividends but in the meantime, it compounds and builds up tax free.

There are stocks that yield over 5%👍.  While the principle will go up and down over time (as will a bond), if the company is a good one, the principle invested will grow as well.

I suggest this if:

1-you can tolerate risk (but unless you hold bonds to maturity, you can lose principle as well)

2-you can take a long term view and hold the stocks over a long time.  Do NOT put your “lunch money” in the stock market (or long term bonds),

3-see market drops as “buying opportunities”.  This takes courage to buy when others are selling.  Often market drops have nothing to do with a particular company’s future but just generally selling on bad news like the possibility that Russia will invade Ukraine.

There are “Dividend Aristocrat” that deserve a good look when markets drop and yields go up. In figuring the yield,  if these are in a tax free IRA, it is important to figure your net, after tax yield when making investment comparisons.  Google “Divided Aristocrats”.

Some general thoughts: https://www.nerdwallet.com/article/investing/how-to-invest-dividend-stocks
 

 

[OCClient]

Diversify.  People have lost most/all of their retirement funds by failing to do so.  Remember Enron?

Guaranteed income investments can be disastrous if the underlying asset/company becomes insolvent.  Be aware of your risk/protection.  See "Executive Life".

 

Edited February 16, 2022 by OCClient

[SimonClark]

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Edited March 8, 2022 by SimonClark

[Kevin Slater]

On 2/15/2022 at 6:27 AM, Kevin Slater said:

Another con:  that 7.12% isn't fixed.  It adjusts every six months, and the current offerings have a base-rate of 0% (the 7.12% is all dependent on inflation, as opposed to some earlier issues I hold which have a base-rate of 1.4%-- thus currently earning 8.57%). 

You can bump that to $15k per year if you choose to have $5k of a tax refund sent in the form of paper I-bond.

Now that it's back on my radar, I may max out again this year.

Kevin Slater

In mid-April they'll announce the new I-bond rate.  It will likely not be better than the current 7.12%, but you'll have until end of April to jump onto that old rate, or hold off until May 1 should the new rate be better.  You can purchase up to $10k a year, plus an additional $5k if you use a tax refund.  Will update once new rate is published.

Kevin Slater

[Luv2play]

How things have changed in the stock markets (and bond and cryptomarkets) in just the last month. Everything is looking dire and losses are staggering already. Nasdaq and tech stocks are in the sewer, blue chips are heading in the same direction and bonds are a bust. Bitcoin is down 50 percent in just a few months. 

How are people feeling who are actively invested in these markets? Me, I'm heavily invested in cash and have been so for some time now since valuations in all categories were going crazy.

[Kevin Slater]

This presents a wonderful opportunity to deploy some of that cash.

How am I feeling?  Like I've seen this before, and I know how it ends.  It ends well.

Kevin Slater