The Investment Thread (4 Viewers)

On paper.

I know I keep talking about this. But it's not a great idea to stock watch daily, unless you want to be a day trader (which I strongly advise against).

Pick good stocks and then walk away. Check back in a year or so.

Or better yet check back in 10 years. :hihi:

Best thing you can do if you're gonna stay invested more than 5 years out is to continue buying, both the dips and the rips. The people who hurt themselves the most during the 07-08 mess were the ones who got scared, took their money out, then missed out on the recovery.

The ones who made out like bandits were the ones who continued contributing to their investments and didn't panic. They steadily bought on the way down, and continued adding during the upswing.

Day trading is nothing more than gambling. Some people know how to do it. But they're rare.
 
On paper.

I know I keep talking about this. But it's not a great idea to stock watch daily, unless you want to be a day trader (which I strongly advise against).

Pick good stocks and then walk away. Check back in a year or so.
Its not. That's correct.

However if you don't you get days like this that set you back months. Extended days like this put you back years.

Its one thing for Warren buffet to lose 10 percent of 2 billion. It's another for John doe to lose 10% of 500,000. If your rate of return for 2019 was a nice 15%, you just lost 2/3 of that and are where you were in May 2019.

So everyone should keep eye on market. Maybe not daily but certainly in times when market volatility is extreme.

I put in stop losses. I made 32% in 2019 and wasn't abt to give back 10 or more in 2 days.

Last time I got stung as I held out too long and by time I realized things were still going south. It made no sense as I woulda locked in losses. But it put me back 2 years. Now with a larger TV, 10 percent means more than 10 years ago.
 
Its not. That's correct.

However if you don't you get days like this that set you back months. Extended days like this put you back years.

Its one thing for Warren buffet to lose 10 percent of 2 billion. It's another for John doe to lose 10% of 500,000. If your rate of return for 2019 was a nice 15%, you just lost 2/3 of that and are where you were in May 2019.

It's only a paper loss though. If you don't need your money (which you should only be investing money you don't need in the near term) -- then you aren't taking a loss. For example, I just have a set amount of money I invest in every month. I just have a couple of index funds that mirror a broad section of the economy.. so if there is a prolonged down turn in the market, I'm buying at the lower rate, and since the overall market averages over 10% a year over a 30 year period... my overall return is overall roughly 10% (it's actually closer to 13% for me b/c I started getting more disposable income during the 07 crash, so I pumped in a lot more money then). I don't try to time the market, and my stress level is pretty low. My timeline for cashing in these stocks is over 10 years, so I don't really care if we have wild swings in the day to day market.

So everyone should keep eye on market. Maybe not daily but certainly in times when market volatility is extreme.

I put in stop losses. I made 32% in 2019 and wasn't abt to give back 10 or more in 2 days.

Last time I got stung as I held out too long and by time I realized things were still going south. It made no sense as I woulda locked in losses. But it put me back 2 years. Now with a larger TV, 10 percent means more than 10 years ago.

I don't really see why unless you need that money in the near term. But if you need that money in the near term you shouldn't be in stocks anyway. Trying to time the market is pretty much impossible.
 
My timeline for cashing in these stocks is over 10 years, so I don't really care if we have wild swings in the day to day market......But if you need that money in the near term you shouldn't be in stocks anyway.

I’m not being dense, but what is “near term”. At 10% returns, your money doubles every 7.2yrs. At 11% it’s 6.5yrs and the Dow averaged 11% over the last decade. Would anything more than 3 or 5 years be considered near term?
 
I’m not being dense, but what is “near term”. At 10% returns, your money doubles every 7.2yrs. At 11% it’s 6.5yrs and the Dow averaged 11% over the last decade. Would anything more than 3 or 5 years be considered near term?

It's a good question, and I guess it depends on your risk tolerance. I'd definitely consider 3 to 5 years as being near term. If you need your money that soon, I'd do a higher mix of "safer" investments such as bonds and t-bills. There have been periods in history of low returns for an extended period. For example if you invested money in 2000 right before the .com bubble burst, you would be basically treading water until 2010 (if you had been doing dollar cost averaging then you'd actually have a negative return in 2009 (but then you'd have a crap ton more money now). So basically, I think your horizon for stock investing should be 10+ years. As you near retirement or whenever it is you think you'll need money, you should move to more cash and bonds.
 
We've had an unprecedented bull run... don't be surprised if we have 4-5 years of flat returns.
 
We've had an unprecedented bull run... don't be surprised if we have 4-5 years of flat returns.

I don't know if we're at that point, but it I've got another 20 years before I need my investment money, and I would not be surprised to see a 4-5 year bear market at some point in that time frame.
 
I don't know if we're at that point, but it I've got another 20 years before I need my investment money, and I would not be surprised to see a 4-5 year bear market at some point in that time frame.

I agree. There are some significant market risks we'll have to navigate in the next 12-24 months. The virus thing, a lot of instability in many areas of the world, there are some markets where bubbles are starting to develop and could pop before long, the elections and potential post election market downturn. There's also a really dysfunctional Congress that could throw a wrench in things.

It's tough to predict, but I'd be surprised if the market continues the trajectory it's had for several years now.
 
Futures are down big again. I actually think tomorrow is the change for a rally. If we can start down and get a reversal then it'll likely really run. Still think it'll be temporary and more likely scenario is we trim another 2-3%.

Gold finally bounced off of support levels and got upward momentum again. Could be ready for a run at $1700.
 
Futures are down big again. I actually think tomorrow is the change for a rally. If we can start down and get a reversal then it'll likely really run. Still think it'll be temporary and more likely scenario is we trim another 2-3%.

Gold finally bounced off of support levels and got upward momentum again. Could be ready for a run at $1700.

You touched on this before in this thread. The lag time of reports from Asia / Europe.
We get those late in day reports that really put the market on edge. Couple that with the run the market has been on for last 18 months, and here we are.
If the news is relatively good on the virus front, with the announcement of the Coronavirus task force here, it may be enough to quell the fear for now. And I don't know that the market has traded on so much "emotion" ever.
Then you have the market disruptions that no one has really gotten a handle on just yet.

With 3 stop losses that kicked in last few days, I locked in some good profits and will wait to make my next move with advice from my FA. We are both on same page which really helps out when investing. I defer to his 40 plus years experience and he has been fantastic for me over the last 11 years. (and you too @superchuck500 lol)

When you have 5 days of losses, day 6 usually sees a reversal of sorts. Thought we had that today, but then more news came and popped the balloon.
 
@UncleTrvlingJim Thank you.

I view it a bit differently and decided to be a bit riskier. I lump invested money on a 5-year horizon figuring rolling 5-year returns will work in my favor. It’s money I don’t definitely need in that window, but it is planned for that. To mitigate risk, I bought a target date retirement fund. I think savings interest rates have just been too low over the last decade to justify 5-year money in a savings account if you have a window of flexibility +-2 years. I’m strongly considering liquidating the entire fund tomorrow.

Five-Year Time Frames
5 Years Rolling Returns


The chart above looks at rolling five-year returns of S&P 500 Index and three different bond indices from January 1973 – December 2016, and Russell 2000 Index returns from January 1979 – December 2016.
The S&P 500 Index, shown in bright red, delivered its worst five-year return of -6.6% a year over the five years ending in February 2009. The best five-year return of 30% occurred over the five years ending in July 1987.
 
Goldman Sachs report says

“We believe the greater risk is that the impact of the coronavirus on earnings may well be underestimated in current stock prices,” Goldman strategist Peter Oppenheimer said.


News keeps flowing out of Iran and SK that just isnt good. China seems to have plateaued, but as we all know, those numbers are probably fudged to give the impression that all is getting better.

Support for S & P was said to be around 3000-3030. We will test that today at opening bell.

@bclemms just posted on the Wuhan thread about a WHO presser today that they will probably state a global pandemic is underway ( and late of course ) and if that happens, and numbers like SK, Iran and other countries continue to show exponential growth, the market just doesnt have enough "feel good" momentum to ward off the negatives.

I fully expect the remainder of my stop losses to kick in today or tomorrow. Crazy.
 
Liquidated about half of our retirement (this half is entirely in SPY and the "don't touch" half is in target date funds) due to some info I got around the virus and manufacturing. Sold all of our SPY on 2/14 at $336.70


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Let's catch some falling knives boys!

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ETA: the $305 order already hit as I was posting this...

Hopefully I don't die of China Herpes so I can actually enjoy the gains.
 

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