Investing 102

[ADY]

Maybe a dumb question but, i'm completely ignorant to this stuff..
Would y'all recommend putting a hold on my company 401K paycheck contributions for the time being to have more cash available or just keep taking the deduction and making the contributions. I'm doing a 20% contribution at this time.
thx

No one knows how much more of a pull back will continue, but I'd recommend continuing to contribute to your 401k so you can nibble back in at the lower prices.

I partially missed out on the run up in 2019 b/c I moved majority to safer cash/bond funds, but started buying a couple muni bond funds this week that are yielding 5% dividend tax-free and down to historical lows.

[XLexusTech]

Executive / company buy backs..

[rustomatic]

Executive / company buy backs..

This is what the genius airlines have been doing for years (partly to inflate their stock prices, so as to make it seem like they didn't suck as businesses) . . . for years of profits like never before. Remember how airlines used to go broke all the time, and the gubment would step in? Great financial management always leads to being broke, right? Oh, no problem, the gubment has an extra $100 billion to put them back in chargeyoutodeathforeverything mode again (once the virus thing loses its grip and toilet paper is freely purchaseable again).

As for bonds, refer to The Big Short (book or movie). Look forward to a sequel, as the same great investment strategy never stopped, however it is now joined by packaging of super-high quality car loans on $80k pickemup trucks people could totally afford.

Beer is the only answer. Next week does not look good from this distance. :D

[XLexusTech]

This is what the genius airlines have been doing for years (partly to inflate their stock prices, so as to make it seem like they didn't suck as businesses) . . . for years of profits like never before. Remember how airlines used to go broke all the time, and the gubment would step in? Great financial management always leads to being broke, right? Oh, no problem, the gubment has an extra $100 billion to put them back in chargeyoutodeathforeverything mode again (once the virus thing loses its grip and toilet paper is freely purchaseable again).

As for bonds, refer to The Big Short (book or movie). Look forward to a sequel, as the same great investment strategy never stopped, however it is now joined by packaging of super-high quality car loans on $80k pickemup trucks people could totally afford.

Beer is the only answer. Next week does not look good from this distance. :D

Futures are down tonight stmilus bill stuck with the Dems plsyomg politics .. tomorrow is going to be a big slide me thinks

[XLexusTech]

Futures are down tonight stmilus bill stuck with the Dems playing politics .. tomorrow is going to be a big slide me thinks

So I realise the whole point of 5his tread is not to try time the market ..... however bargains are prime for 5he picking... so I haven’t sold anything... I haven’t slowed down my automatic investments or my 401k ... but I am trickling in opertunistic buys

[captainofiron]

I would Max out your 401k to what your company matches right now

It's not about timing the market, it's about gauging buying opportunities

Strengthening your positions or getting good names cheap is what it's all about right now

I've been stashing a little bit of cash all last year and now I'm buying chunks here and there, generally as good companies go ex dividend or when they dip as they pay their dividend if I missed the window

Most of my positions are red right now, so holding fast

Don't panic sell guys, but double check your companies free cash/cash flow if they don't have the money to go a while without good revenue then it might be time to do a tax Harvest

[68454RS]

I would Max out your 401k to what your company matches right now

Company only matches 100% up to 3%, then 50% up to 6%, i'm putting in 20%

[WSSix]

Company only matches 100% up to 3%, then 50% up to 6%, i'm putting in 20%

Good job! Just make sure it's in a diversified portfolio within that 401k. If you're young and have many years left, also make sure you're not in too conservative of a fund.

[68454RS]

Good job! Just make sure it's in a diversified portfolio within that 401k. If you're young and have many years left, also make sure you're not in too conservative of a fund.

OLD.. 57.. most of it in a 2035

[cpd004]

As a beginner, I was thinking playing around with TD Ameritrade. Any of reason not to use them over one of the best there...E*Trade, Robin Hood, etc.? It appears they all require a linked bank account. Is this risky?

[WSSix]

I'm with Fidelity and couldn't be happier. I'm not a trader though.

The linked back account is so you can transfer money into your brokerage account. No reason it's not as safe as anything else. Just remember, your brokerage account is not FDIC insured so don't be slack with the password and user name information.

[captainofiron]

Company only matches 100% up to 3%, then 50% up to 6%, i'm putting in 20%

So, if I were you, I'd contribute up to your employer match limit

Then the rest of money you are stashing I'd put in a retail investment account. Generally 401ks don't have very great options and if you ever need that money there is penalties for taking it out

But it's up to you, BUT it would be pretty hard not to out perform the funds in your 401k

[captainofiron]

As a beginner, I was thinking playing around with TD Ameritrade. Any of reason not to use them over one of the best there...E*Trade, Robin Hood, etc.? It appears they all require a linked bank account. Is this risky?

I have an E trade and a Fidelity account, both with linked accounts

They have really high quality security measures and two step authentication, really no reason to be worried

I can't really speak to the newer trading apps like M1 and Robin hood though, I'd be leery of using them only because they aren't as established and like Robin hood glitches have happened

[JKnight]

Keep in mind that many 401k plans offer a brokerage option that allows you to invest your pre-tax income with waaayyy less restrictions on what you can invest in. Usually they’ll allow everything a brokerage account will, although options are sometimes not allowed.

The pre-tax part is important! Your principle will be higher (compared to post-tax) and every percent of growth will be more impactful $ wise. Obviously you have to pay taxes eventually, so your personal situation might affect whether this is the right way to go. Personally, I will maximize my pre-tax contributions to get as much growth over the next 25 years, then do additional post-tax savings into a brokerage so I can have some savings where income tax is already paid (will still have to pay cap gains, qualified divs, etc).

[rustomatic]

As a beginner, I was thinking playing around with TD Ameritrade. Any of reason not to use them over one of the best there...E*Trade, Robin Hood, etc.? It appears they all require a linked bank account. Is this risky?

TD Ameritrade has some of the best charting software out there (ThinkorSwim), and trading is free; executions are sometimes absolutely terrible, however. Robinhood is a pile of crap, unless you enjoy using your cell phone to throw money away. Etrade is nice, and it is also free, but it lacks a lot of what TDA gives you. My wife's dad really likes Fidelity, especially after his account got smoked in the last bubble; he learned to become more hands-on. There are zillions of other brokers out there . . .

"Playing around" usually means losing money, pretty much all of it. Another of the benefits of TD Ameritrade is that they offer a ton of free educational resources online (with quizzes!), through their secure platform; YouTube also has a treasure trove of educational content, but much of it is trying to sell you crap. You can open an account at TDA with nearly nothing, so it is a good choice overall, even if the money you put in just sits there for a year (for free).

Over the past decade, the free information on this stuff has improved exponentially. It's a perfect time to learn and watch (and better understand why so many others are losing or making money right now).

[Beechy]

Week ending March 27, 2020
:trophy-1302:.....goes to rustomatic.....:trophy-1302:


Robinhood is a pile of crap, unless you enjoy using your cell phone to throw money away.


Thank you Paul.

[SSLance]

I finally made a few trades yesterday. Got rid of some dead weight, picked up a new stock and added to some other well performing holdings.

I missed getting a few more as they were running higher than my offer and missed selling one as it ran lower than my ask. This just reaffirmed to me I was making the right choices. We'll try again Monday on them

[SSLance]

And with that, I am officially out of the oil business...

I had held onto XOM and KMI for the past few years mainly for the dividend...but this latest deal with Russia and OPEC was the final straw.

There are way too many other companies out there on sale right now to keep these on board.

It was interesting to watch closely while making the trades, the stocks I wanted I kept chasing up while the stocks I was selling I kept chasing down. This told me I was doing the right thing and I finally just made it happen.

Good riddance oil, now I can feel good again about buying sub $2.00/gal gas...

[glassman]

Fundamental changes.

I'm long and my funds and stocks are being watched by a very small broker.

And cautiously optimistic. Strange times, strange times indeed.

Oil is strange. Were gonna need it and the demand for it is ever increasing despite what the stocks tell us. it's bad now but the economist reports I read is the electric cars and buses all need the recharging (caption obvious) but where is that energy coming from? Solar= not enough, Nuclear=everybody's scared. Oil=easy, not sure.
I'm not heavy in oil, other than some divi Chevron stock.

[WSSix]

I've thought about the same thing, Lance. I'd loose a lot for sure, but I feel I could recover if I put the money elsewhere. What's happening with oil is definitely weird. It's this crazy substory within the craziness of the Coronavirus issues.

[rustomatic]

Come on, Mike. Demand for oil is in the toilet; nobody is commuting to work. Shale crapped out a few years ago, and surpluses are happy, i.e., the supply side is fat, and the demand side doesn't care at all. Oddly, the oil sector has been up the past couple of days, but that will probably be over on Monday, much like the recent banking/hedge fund stock trend represented by mortgage-backed security scuzz trying to fix up their balance sheets while everyone was/is dropping (mortgage-packed) bonds like toxic waste.

Dividends are in a funny state now, too, as they have become yet another cost to cut. I got one last week for holding a gold ETF for like four days . . . it only paid for one beer, but it was swell, nonetheless.

On a fun California note, it is interesting (should be alarming) how Tesla is in bed with PG&E on a central coast solar/battery farm thing (in the midst of the largest utility bankruptcy ever). Too legit to quit, those folks . . .

Happy shelter-in-place weekend, dudes!

Fundamental changes.

I'm long and my funds and stocks are being watched by a very small broker.

And cautiously optimistic. Strange times, strange times indeed.

Oil is strange. Were gonna need it and the demand for it is ever increasing despite what the stocks tell us. it's bad now but the economist reports I read is the electric cars and buses all need the recharging (caption obvious) but where is that energy coming from? Solar= not enough, Nuclear=everybody's scared. Oil=easy, not sure.
I'm not heavy in oil, other than some divi Chevron stock.

[Vegas69]

It reminds me of an analogy: The time to buy is at deepest pessimism. You make me want to buy oil! HA

[Beechy]

On a fun California note, it is interesting (should be alarming) how Tesla is in bed with PG&E on a central coast solar/battery farm thing (in the midst of the largest utility bankruptcy ever). Too legit to quit, those folks . . .

Soooo........Tesla bails out PG&E?....takes over their infrastructure?.................. A naïve question probably.
Could you expand on this please Paul?

+1 on happiness for the weekend.

[LS1 TJ]

Guess who is betting on US stocks? The whole world. Europe, Asia, Mideast and every one else. It's going to be a wild ride but we the US are the only solid bet in the world.
Oil? Trump had a few words with the Saudis yesterday. Pretty much said if they flood the oil market all of our Navy ships and any military assistance is gone. Same for all the other Mideast oil producers. Let Iran shut down the gulf and see where oil prices go. If that happens there will be a drilling bonanza in the US like you have never seen before.
Bet on the US. That's where my money is at.

[frankv11]

Have not been here for a while but would like to catch up with this thread 👍

[JKnight]

I was bound and determined to take advantage of this Covid19 pullback in the market, since I was laid off and had no cash to spare during the 2008 recession. I threw what I could into a Blue Chip mutual fund in late March and am up 25% so far. Wish it could have been a larger purchase but I consider it a moral victory. Figuring I’ll take some profit to pay for the bathroom remodel I’m doing and keep maxing out my 401k contributions. Luckily my job is safe this go-round, so I’ll be a buyer no matter what the next few months might bring.

Agreed that dividend stocks aren’t quite as attractive in this environment. Nobody is hesitating to cut their dividend like they were when Greg was extolling the virtues of dividend hunting.

[WSSix]

I did the same, threw in what I could and am happy I was able to do that much. I still think there will be a pull back once quarter two results come in. If I'm right, I'll buy more then.

[BonzoHansen]

I picked up a lot of quality on the dip. Google, apple, some others. I still hold too much cash but I'm still not convinced another dip is in our future.

Sent from my SM-G950U using Tapatalk

[XLexusTech]

all politics aside. If trump is not elected in November expect a major decline..
The street loves his "Pro business" approach..

[rustomatic]

How about that 1860-ish point drop in the Dow today, dudes? We're in new territory as of this year with the markets (and that market disaster, Robinhood). I get fearing the future, but do we have to fear hobbies, recycled air, and gangs of internet trading cults who can kill your day with a crappy service outage?

The future is fun! :smiley_smack:

[WSSix]

I was looking like a genius earlier this week. Now, I'm wondering if this is the start of another dip. I wasn't expecting another until 2nd quarter numbers rolled in.

[rustomatic]

Too look "like a genius," you needed to go to a bar or a really crowded beach party in the last two or three weeks. Then, you would have been able to be super-current with coronavirus.

Everyone likes to get in at the bottom to make the most of the uptick . . .

I was looking like a genius earlier this week. Now, I'm wondering if this is the start of another dip. I wasn't expecting another until 2nd quarter numbers rolled in.

[frankv11]

back on LG to check up this thread. so back in 2008 I procrastinated and bought nothing on stock even though I wanted too. so any how this time around I bought a few just to get my foot in the door. CVX , UAl , BA ..... again waited a bit more than I should have to buy but at least finally did.

question to the stock gurus here , what stocks to buy or look into in tech / 5g and not talking the Microsofts of the world . more like new young companies with fresh ideas.

[ErikLS2]

Would love this discussion to incorporate the sharing of different prospects/ideas. This pandemic has fast forwarded how we do things by maybe 5 years. I'm no expert but I've been easing into these since March as I see them as having long term business footholds, most have done incredibly well.

WORK
TTD
ZM
TDOC
QQQ (bulk of my bet)

Some older purchases
TWLO (+600%, I was soo smart, haha! :trophy-1302:)
OKTA
PYPL
COST
FB
APPL
GOOGL

Some losers
GM
LUV
WFC

[XLexusTech]

Doing a little offset selling right now.. trading long term losses in and taking the equivalent in gains form long term winners to mitigate tax burdens.

I am curious if people have an opinion on the election and impact on the market.

My prediction is Trump wins market will see big gains then level out..
Biden wins and market with spiral and take a few years to recover.

thoughts appreciated..

[AMSOILGUY]

MRVL is my 5G bet.

[ErikLS2]

MRVL is one of the best 5G bets.

I think if Biden wins it'll negatively impact the market, but probably not in a huge way.

[SSLance]

So, the last couple of days watching what is going on with WallStreetBets and Gamestop has been entertaining AND made me even more thankful that Greg talked me into Growth Dividend Investing vs trying to gamble on the market.

Hope you all are well. Should be another interesting year right?

[BonzoHansen]

I was considering bringing this up. Its silliness. Fun to watch. I suspect there are a lot of shenanigans going on behinds the wall to thwart the little guys.

[WSSix]

No doubt, Scott. I'm a little concerned about the long term ramifications of what WSB is doing. I'm afraid the SEC etc won't respond correctly. Otherwise, I'm sitting here watching the drama unfold, loving the silliness of the replies on that subreddit, and hoping some people really stick it to the hedge funds. They are definitely well beyond investing 102, lol.

[BonzoHansen]

reading the reddit stuff has entertained me for a few days.

"This is like fight club, but with stonks" - reddit user.


an interesting take.
https://www.youtube.com/watch?v=enLiJfijWBI&ab_channel=LouisRossmann&fbclid=IwAR2gPQ-xCxdzemVBnZWoQBAxv5ygSVjilCWDivS0IIHJ6DD4QX6TcAhj1 cE

[JKnight]

All week I’ve been thinking, “I wonder what GW would have to say about all this?”. In all reality, I have an idea what he’d say, but I know he’d say it more succinctly than I could. Stay the course, invest in companies you understand and leave the gambling to the Vegas blackjack table. It’s been super interesting to watch, but it’s not the “investing” he so eloquently detailed in this thread.

[JKnight]

So, the last couple of days watching what is going on with WallStreetBets and Gamestop has been entertaining AND made me even more thankful that Greg talked me into Growth Dividend Investing vs trying to gamble on the market.

Hope you all are well. Should be another interesting year right?

How did the Covid-driven pullback in Early 2020 affect your div stocks Lance? Did many of them reduce or completely kill their div payments? I know I’ll miss my 6% divs from Ford stock, but the return from dollar cost averaging my F position in March and April more than made up for the lack of dividend.

[SSLance]

How did the Covid-driven pullback in Early 2020 affect your div stocks Lance? Did many of them reduce or completely kill their div payments? I know I’ll miss my 6% divs from Ford stock, but the return from dollar cost averaging my F position in March and April more than made up for the lack of dividend.

Most of mine held their course pretty well. We tried to make some more buys even in the early stages and were a bit late on arching the dip. Still very happy with our choices though.

My wife picked out and bought some STX which gas done fantastic for her. The sin stocks have been a great segment to be in last 12 months...

[WSSix]

All week I’ve been thinking, “I wonder what GW would have to say about all this?”. In all reality, I have an idea what he’d say, but I know he’d say it more succinctly than I could. Stay the course, invest in companies you understand and leave the gambling to the Vegas blackjack table. It’s been super interesting to watch, but it’s not the “investing” he so eloquently detailed in this thread.

Yeah, that's exactly what he'd say. Sure, there are people getting lucky. Even deep****ingvalue is admitting he got lucky and didn't anticipate this type of a reaction. WSJ has done an interview or story on him. Fun read.

The volatility has caused my other stocks to drop a little bit which is a buying opportunity for me. Not as great as last spring with the COVID drop, but a buying opportunity all the same.

[toy71camaro]

How did the Covid-driven pullback in Early 2020 affect your div stocks Lance? Did many of them reduce or completely kill their div payments? I know I’ll miss my 6% divs from Ford stock, but the return from dollar cost averaging my F position in March and April more than made up for the lack of dividend.

I think I only had 1 change their Divvy, but it was WFC, who was in hot water anyways.

Was able to pick up a few things on sale, and get my parents on board with Div investing too. Happened to be at just the right time for them.

[slimjim]

This thread has lost a lot of traction as of late, which is surprising considering the opportunities that have arisen this year.

The hunt for COVID-stricken stocks yet to bounce back has been a good one for me.

And on more of a controversial note, I started researching crypto-currencies somewhere in the earlier stages of the last bull-run. They're a roller coaster I don't hear much about here, which is odd considering the amount of crypto wealth I see poured into the car-scene.

[WSSix]

It's lost traction because it's basically covered everything it needed to. Remember, I started this simply looking for investment knowledge. This was never about picking stocks as much as it was about learning what to do with money that's available for investing. That knowledge is still applicable today through all of these turbulent times.

I'm glad people are still checking in. Thank you. I hope this thread continues to help people the way it helped me.

[68454RS]

I have no clue what i'm doing but on the prodding of friends. I opened a TD Ameritrade account and bought some GMGI stocks. Anyone else own any?
Anyone want to recommend some low buck "starter" stocks to play with?

[dhutton]

I have no clue what i'm doing but on the prodding of friends. I opened a TD Ameritrade account and bought some GMGI stocks. Anyone else own any?
Anyone want to recommend some low buck "starter" stocks to play with?

Best advice I can give you is to go back to the beginning of this thread and read what Greg had to say. Reading and following his advice was a game changer for me. Retired early at 58 thanks to him.

Don

[68454RS]

Best advice I can give you is to go back to the beginning of this thread and read what Greg had to say. Reading and following his advice was a game changer for me. Retired early at 58 thanks to him.

Don

Thanks, That was some good reading. I'm small beans right now but i've been putting about 20% in my company 401K.
I just dabbled a little and bought $500 worth of Kinder Morgan and $500 worth of AT&T. already had $1000 worth of the GMGI.
I know this is pretty much nothing in the real world but, I'll play more every week as I feel more comfortable.
If nothing else, my daughter might see some returns when she inherits my accounts.

[Vegas69]

Okay -- only because Tracy said I had to chime in -- I will do as I'm told. :D


So -- this answer is one that I say to you -- well.... it all "depends". So without writing a book -- let's take a real BASIC look at savings.

A person needs to think of savings as various BUCKETS of money.

A bucket of money needs to be for "emergencies" -- and this bucket - just like the other buckets we'll get to - needs to be 'adjusted' to meet the needs of the owner. I don't need an emergency bucket. I have plenty of money. Most need some kind of "quick and easy to get to money" -- that needs to be taken care of first. Whether it's $500 or $5000... is up to you. This really needs to be funded by the people that can afford it the least - i.e., the guy with maxed out credit cards!

Another bucket is the retirement bucket.... you seem to be working on that. BTW -- Don't be afraid to put more into this bucket. You do not need to be limited to the 15% you're doing at work. The only thing you're doing to fund more than your limits is that you're putting in AFTER TAX money. Dude - when you retire - and you're all set for life - you won't give a damn what you're living on - the point is that you will have it! So max your workplace and then see if you qualify for a ROTH IRA... which is after tax savings that comes OUT tax free...

THEN -- you really asked about INVESTMENTS.... again - this depends - real estate is ILLIQUID... so unless you have a bunch of dough and are just looking to diversify - fugedaboudit. If you want some liquidity -- with GROWTH in your capital - and get paid to "wait" - get yourself a Schwab account - or some other discount broker - and buy yourself some big cap dividend paying stocks. The rule of investing is to never put more than 5% of your TOTAL INVESTABLE MONEY (all of your investable money not just what's in this particular account!) into ONE investment. That way - if you lost it all (all of one investment) you're not hurt. Pigs get fat - hogs get slaughtered. Ask the builders that loaded up on dirt before the real estate crash - because they ain't makin' any more of it they'd tell ya! Dumbasses...

I'd buy STOCKS for dividend AND growth... so look at a CHART of any company you're interested in... see that over the LONG RUN (like 10 years) the chart is lower on the left and rises as it goes to the right! Forget about the dips in 07/08 - every stock you look at will have that. But lets look at Kinder Morgan Partners - NYSE symbol KMP - there is a nice chart... AND it pays 5.86% (based on todays price) which is $1.16 per share per quarter. So if you bought 50 shares - every 3 months you'd get a dividend of $58 (you're getting paid to wait - you're waiting for the share price to appreciate!). Yeah I own it.

I'd also look at AT&T (symbol T) - pays about 6% dividend. Is "steady" price wise. Great place to park money and be relatively sure it's going to still be there - good market or bad. Again - you get paid to wait. Yeah I own it.

So that's what I'd be doing. Diversify - don't buy TWO oil stocks -- buy ONE - Then get a consumer food stock -- Coke (KO) or Pepsi (PEP) or McDonalds (MCD). Funny -- people laugh when I tell 'em to buy McDonalds -- the stock is UP 125% in the last 5 years! AND you get a .61 a share per quarter dividend! So here's the deal -- it's what I ALWAYS look for.... if they don't pay a dividend - I'm not a buyer - and if the dividend is "low" (like MCD's is) then I want the growth to be there.... I'll take STEADY (AT&T) but then I want a higher dividend. Does that make sense?

Then --- DO NOT GET CAUGHT UP IN TRADING - DO NOT PANIC - DO NOT LISTEN TO THE GROCERY STORE CLERK TELLING YOU ABOUT THEIR LATEST BIG MARKET HIT.... RUN AWAY from those people! DO NOT BUY GOLD... IF THEY MAKE A TV SHOW ABOUT SOMETHING (House flipping?) RUN FOR THE HILLS... DO NOT INVEST IN IT. YOU'RE ALREADY TOO LATE!

There is no get rich quick scheme. Steady Eddy whens the race. LONG TERM is not 15 minutes. Buy good quality big names that you know and understand - with good charts and good dividends. Then sit back and laugh at the losers when they're broke and you're not.


Oh -- and make sure you check the little box when you buy "REINVEST THE DIVIDEND". That way every time they pay you - they buy more of their stock automatically for you - more shares - more dividends - which buy more shares which pay more dividends...

If you buy a stock and it's value DOUBLES (just an example) then sell the "gain" and buy something else. Nobody ever went broke taking a profit. It helps you to diversify - and keeps each investment in that 5% bracket.

There's a lot more to it -- and more details etc - but them's the basics. Stay thirsty my friend!

:cheers:

The best advice is always seems to be the simplest. Thank you for the wisdom Greg and for the reminder Don.

[Roscoe03]

This thread and Greg's wealth of knowledge and him taking the time to contribute to this thread for newbies like myself is what go me started in stock investing. That was 10 years ago now and I still employ his ideas every time I make an investment.

[68454RS]

if they don't pay a dividend - I'm not a buyer
I read that and then wonder about a stock like Tesla which shows no dividend payout but i'm hearing it's a good stock to buy in if you can catch it in a dip.. am I not understanding things?

[dhutton]

I read that and then wonder about a stock like Tesla which shows no dividend payout but i'm hearing it's a good stock to buy in if you can catch it in a dip.. am I not understanding things?

Basically the thinking is there is a difference between being an investor and a stock trader. Investors pick steady rising stocks that pay a decent dividend and hold them while reinvesting the dividends versus stock traders chasing the next hot stock.

Don

[srode1]

I read that and then wonder about a stock like Tesla which shows no dividend payout but i'm hearing it's a good stock to buy in if you can catch it in a dip.. am I not understanding things? avoiding non dividend or low dividend paying stocks will ensure a person misses cycles where there is a huge opportunity for investment growth. I think the key to stocks like this is making sure they are an appropriate portion of your portfolio considering your time horizon and rebalancing your portfolio periodically to make sure they don't become overly weighted when/if they take off.

The FANG stocks over the last few years have been a great opportunity as an example and none of them pay much of a dividend. I'm retired and I own some of those as individual stocks and inside funds. I've rebalanced a couple times in the last 2 years because they became too large a portion of my investments and I think their growth will slow.

Tesla is an interesting stock that I haven't invested in unfortunately, I still think it's overvalued though and won't go after it especially with the rising competition. While I could be making a mistake on that one, I'm sticking to my guns on that choice.

[SSLance]

I also have this thread and GW to thank tremendously for our portfolio's growth over the past 7 years or so.

I had dabbled in the market quite a bit before and had my arse handed to me several times as well as made a bunch of money and was fed up with the market and sitting 100% in cash when I stumbled upon this thread.

Here I learned how to do Dividend Growth investing the proper way and have been making that happen ever since. The past few years have been outstanding for us and I don't see it stopping any time soon. I still sleep soundly every night and even Covid didn't sway me from our strategy...it's that sound.

I will say that I've ventured out and invested some of the other cash we had laying around in different investment avenues recently, but this was purely a way to diversify a bit more and I didn't take any Dividend Growth money out to play these other fields.

[dhutton]

avoiding non dividend or low dividend paying stocks will ensure a person misses cycles where there is a huge opportunity for investment growth. I think the key to stocks like this is making sure they are an appropriate portion of your portfolio considering your time horizon and rebalancing your portfolio periodically to make sure they don't become overly weighted when/if they take off.

The FANG stocks over the last few years have been a great opportunity as an example and none of them pay much of a dividend. I'm retired and I own some of those as individual stocks and inside funds. I've rebalanced a couple times in the last 2 years because they became too large a portion of my investments and I think their growth will slow.

Tesla is an interesting stock that I haven't invested in unfortunately, I still think it's overvalued though and won't go after it especially with the rising competition. While I could be making a mistake on that one, I'm sticking to my guns on that choice.

Sounds like you didn’t read what Greg wrote. :) Keep in mind is that his advice and this thread is for relative newbies as opposed to well heeled seasoned folks who can tolerate a higher level of risk.

Maybe you guys who want to go more advanced should start your own Investing 103 thread…. :)

Don

[srode1]

Sounds like you didn’t read what Greg wrote. :) Keep in mind is that his advice and this thread is for relative newbies as opposed to well healed seasoned folks who can tolerate a higher level of risk.

Maybe you guys who want to go more advanced should start your own Investing 103 thread…. :)

DonGood point, I spoke without understanding the context of this thread well, my bad. I did read it, and it's quite good. :) Just offering my opinion in response to the Tesla question, a stock with Zero dividends. I do think Tesla is not a great choice for a fairly new investor to - it certainly doesn't match the advice Greg has given earlier in the thread which is great.

[ricer]

I have a slightly different question. My in-laws sold a rental property they had for a long time and decided to give the money to our two kids. They are only 13/11 yrs old and already have a college savings account for them. My wife and I were thinking of putting into a trust account with all the typical stipulations about using it for additional schooling if needed, house purchase, etc before 25yrs old and can do whatever after that. Ideally it would be nice to have the account grow even larger for them but don’t want to risk the money since it’s a substantial amount and it gives them a huge head start in life.

Does anyone have any other options that may be more beneficial on the growth side with low risk?

[Vegas69]

If it was me, I'd probably dollar average into a good index fund and let it ride for 12-15 years. I'd also consider having a chunk of the money unavailable until the kids are 30+. It could really set them up.

Perhaps you split the money up. A conservative account for college and an index fund for the rest.

The older I get, the more I realize its a simple game of time in the market and inflation in regards to stocks and real estate.

[AMSOILGUY]

I may be crazy but it sounds like they already have a great head start. They can afford to take risk. I would shoot for the moon with a custodial brokerage account.

[ricer]

Yeah they are extremely fortunate, and I don’t think they will ever realize just how much of a boost this will be to their lives when they are older and know about the accounts. I get the whole can afford to take the risk but our reservations over all of it is we don’t want to be greedy yet at the same time would like it to grow more than a “savings” account could offer. I feel like the market is due for a correction so that’s why I was steering away from market based options.

[dhutton]

Yeah they are extremely fortunate, and I don’t think they will ever realize just how much of a boost this will be to their lives when they are older and know about the accounts. I get the whole can afford to take the risk but our reservations over all of it is we don’t want to be greedy yet at the same time would like it to grow more than a “savings” account could offer. I feel like the market is due for a correction so that’s why I was steering away from market based options.

A correction will be long recovered in 15 years. Don’t let inflation steal meager gains.

Don

[WSSix]

x2 pull of a simple Index fund that tracks the S&P500. Start at 2006 and look at today. If another 2007-10 starts tomorrow, they'll be more than fine by the time they hit 25. Diversify and get in already. There's no reason to be scared when you have time on your side and don't need the money. Good luck to you and the family.

[XLexusTech]

Let's say you have followed all the things defined in this thread and you are sitting on a 7 or 8 figure nest egg. Some in retirement accounts like 401k Roth ect some not, some in long term cap gains some in short term.

Can we talk about Tax strategies ?
How do they differ when you're still making a good employment income?
How do they change when you have no employment income?
Pros and Cons of IRA to Roth conversion ladder..?

[Vegas69]

Are you boys heaping in or waiting on the sidelines to invest any real coin?

[ADY]

Sitting and waiting for some floor to be established...will likely start nibbling back slowly.

:popcorn2:

[frankv11]

Got my SS handed to me . Lost the battle not war , so I’m sitting and gathering ammo ready to deploy.

[srode1]

I think the bottom is a ways off yet, probably the 3rd quarter 2022. Not trying to catch this falling knife but I am starting to think about choices when the bottom becomes more apparent. Timing the market is a fools game but in this case I'm going to play the fool with my play money and hold off for a while.

[Vegas69]

I'm along the same line of thinking. It seems that it will get worse before it gets better. The tone of the real estate market has certainly changed.

[glassman]

my guess is we'll see a correction into the Dow mid to high 29's and everything adjusts across the board equilaterally, re: RE, Stock, business etc...

We are slammed at work, but it ain't gonna last for ever.

Real estate is Bat Sh!t crazy in the Bay Area, its 65% (just my house) of my gross worth. Its only a "found" asset if I decide to do anything with it. I'm not taking any equities out to invest in any other real estate at this time....

It'll adjust, just try to keep everyone aware to keep their overhead minimal....

[WSSix]

Sitting by waiting for the storm to pass for the most part. I'm taking bites here and there though when it makes sense and brings my cost average down. My 401k's I haven't slowed down on once bit since those are on autopilot. Fun times!

[slimjim]

I think the bottom is a ways off yet, probably the 3rd quarter 2022. Not trying to catch this falling knife but I am starting to think about choices when the bottom becomes more apparent. Timing the market is a fools game but in this case I'm going to play the fool with my play money and hold off for a while.

Let's hope you're right, the big reports this week could help slingshot us back in the right direction, or...

[SSLance]

Still just treading water here as well. I took about a 10% dip off my highs but it's come back a couple points in the last week or so.

My main shocker was Target about a month ago but I still believe in them and haven't sold any.

Meanwhile the divvies keep rolling in and reinvesting dollar cost averaging the rest of my shares down.

[Panteracer]

Like Glassman says the Bay Area housing is crazy
It cooled slightly but I had two neighbors catch the wave
One sold for $900k over asking the other saw it and sold his
the next week for $600k over asking. I thought the Zoom kid
next door paid too much 1 1/2 years ago.. he almost doubled in
that time.... but those prices were at the top in fantasy land
out here. I bought 20 years ago so the tax man would kill me
if I left and where would I go?

Bob

[WSSix]

Oh, I'm down waaaay more than 10%. If that's all you're down, Lance, great job! I'm still just sitting by waiting for times to dip in when it's good. I'm still concerned we haven't seen the bottom. I'll keep dripping until then though.

[Vegas69]

Housing prices are down 3.1% in Vegas from June to July. That's one of the biggest in history including the great recession. And it's probably just getting started.

[srode1]

I'm surprised there hasn't been an implosion in commercial real estate markets yet. Maybe there has but it just hasn't hit the news or bank earnings yet?

[dontlifttoshift]

I imagine mortgage rates doubling will have that effect. According to Redfin, vegas housing prices were up 22.5% in June compared to last year......and approximately 50% since June of 2019.

Even with the recent drop the SP500 is still up ~195% over the past ten years.

[Panteracer]

I get a commercial real estate news letter every day
Again Silicon Valley. Some are rethinking and subleasing their
office space but it is amazing how many of the big investors
are buying things at big money like tomorrow is going to be
a lot better.... some guys that bought a bldg at lets say $80 mil
are making $40 to $60 mil more than they bought it two years back

We also have Google, Facebook, Apple etc buying all sorts of property
My office building is across the freeway from Google and many of
the other owners on my street have sold out to Google many years back and renting back.

I do a lot of Lab renovations as a contractor and their vacancy is still
very low as the labs still need to be there so they can do their work
South SF is the so called Bio Tech Capitol of the world and has grown
so much in the last 5-10 years.. Many are moving south or north because
the rents for them there are getting so high

Hard to figure things out.. maybe Google will make an offer we can't
refuse on our bldg... until then we keep plugging away

Bob

[Vegas69]

I imagine mortgage rates doubling will have that effect. According to Redfin, vegas housing prices were up 22.5% in June compared to last year......and approximately 50% since June of 2019.

Even with the recent drop the SP500 is still up ~195% over the past ten years.

That sounds about right. Some depreciation is a good thing long term. Affordability has gotten out of control. The rent vs. ownership ratio is too far out of whack with the hike in interest rates. It will all sift out. This isn't Silicon Valley.

With that said, it's by far the most rapid shift in the market I've witnessed in 22 years in the real estate business in Vegas. It's like a light switch. Sales were down 40% from just one year ago. Inventory has tripled in months. While 2021 is not a fair bar to measure by long term, it's the weakest July since at least the great recession. Frankly, I'm surprised the market endured as long as it did.

As always, if you are in it for the long haul, it probably doesn't matter.

[srode1]

Homes are still selling over asking and buyers are making offers the first day on the market here, very competitive but Zillow seems to think prices are waning based on what I see for our home anyway.

Commercial Real Estate is another situation. My wife just renewed her retail lease for a minimal increase vs 2 years ago after some negotiation and there are so many huge office spaces that are vacant, just an endless stream of 'Available' signs driving around. Retail seems to be holding up much better than office space around here.

[Vegas69]

It appears the more laid back markets in the mid-west are far stronger than say Vegas, Phoenix, Boise, etc... Our prices shot up over 45% since the pandemic. When interest rates nearly doubled, affordability went to crap. In fact, the average monthly payment in the valley shot up $750 per month over night. That's a tough pill to swallow for an average buyer. I've witnessed a median priced property where the rents were $600 less per month than ownership with a minimum down payment. My research showed that our only chance was to sell to an instiitutional investor. We had virtually NO showings/interest on a median priced house in regards to a primary residence buyer. After aggressive price cuts, we did secure an institutional investor that will lease it. Many Vegas neighborhoods are dominated by hedge fund type investors.

One the high end, the absortion rate is very low. People are just throwing in the towel and withdrawing their listings. Conditioning is a factor. It's a completely different market almost overnight. That means it will take far more patience and aggressive strategies. It will take agents and sellers some time to adapt.

[BonzoHansen]

It appears the more laid back markets in the mid-west are far stronger than say Vegas, Phoenix, Boise, etc... Our prices shot up over 45% since the pandemic. When interest rates nearly doubled, affordability went to crap. In fact, the average monthly payment in the valley shot up $750 per month over night. That's a tough pill to swallow for an average buyer. I've witnessed a median priced property where the rents were $600 less per month than ownership with a minimum down payment. My research showed that our only chance was to sell to an instiitutional investor. We had virtually NO showings/interest on a median priced house in regards to a primary residence buyer. After aggressive price cuts, we did secure an institutional investor that will lease it. Many Vegas neighborhoods are dominated by hedge fund type investors.

One the high end, the absortion rate is very low. People are just throwing in the towel and withdrawing their listings. Conditioning is a factor. It's a completely different market almost overnight. That means it will take far more patience and aggressive strategies. It will take agents and sellers some time to adapt.

As a local in the know, do you think the constant national level news of water issues, lake mead, etc., are impacting the vegas & area (maybe all SW?) markets, especially relocations?

[Vegas69]

I think it's starting to have an effect. Our population shrunk last year by about 2%. That's the first time we've lost population in 50 years I believe. I plan to leave here in 18 months and it's a factor in the decision. Have I had a client leave in 22 years due to the water? Not directly. I think it's a factor now and it will become more imposing if mother nature's path continues on the track it's on currently. The lake was nearly full 22 years ago. That's not really that long ago, but the SW has grown substantially in that time. Vegas is first in line and we have a 3rd intake near the bottom of the lake. Even if the lake gets to dead pool which means the river will stop in Lake Mead, supposedly we'll still have water. We only take about 5-10% as it is. I sincerely hope mother nature changes her tune and it never gets that severe as it will devastate the SW. Especially AZ, CA, and Mexico. There needs to be stricter measures in my opinion. Outlaw grass and pools at least for a while. The pool contractors here are so busy you wouldn't believe it. Imagine the amount of water it takes to fill a pool and replace evaporation. Grass needs to be watered 15 minutes a day, 7 days a week to have a chance to keep it alive in the hot months. There are so many things that can be done, but I don't think it will change until it gets really bad. That's seems to be the human way. I don't plan to stick around to see how it plays out.

[WSSix]

Where are you planning to go, if you don't mind me asking, Todd?

I've have to agree with you about the pools and grass. You're literally in a desert. It's amazing to me the number of pools people have in Florida. Florida has sink hole issues in certain parts specifically because they've been dropping the water table so much.

[Vegas69]

God willing, Spearfish South Dakota. We've loved it for almost 20 years. It's a thriving ecosystem with great people and a small town feel, but with reasonable convenience. The Black Hills is really a paradise. Ponderosa pines, prairies, streams, lakes, trails, and low humidity due to the elevation. Clearly they have some serious weather with snow and hail, etc, but we're ready for the seasons. All this sun is getting old. LOL I'm hoping for 5+ acres and a large detached shop.

[dhutton]

I’ve read a couple of times that Duluth Minnesota is the place to head to escape climate change, assuming you believe in it, but damn that is a cold place in the winter.

Don

[WSSix]

Sounds lovely, Todd. I haven't been to S Dakota but hope to some day. Best of luck on getting there and dealing with the winters.

Don, I was in Grand Rapids, MN three years ago during January or February. I was testing a new installation. It was -30*F so we were able to do cold start testing by just leaving the machine outside overnight, lol. It's a dry cold but everything is covered in ice and snow for months.

[srode1]

I’ve read a couple of times that Duluth Minnesota is the place to head to escape climate change, assuming you believe in it, but damn that is a cold place in the winter.

DonI just went through Duluth on my way to the Boundary Waters for a Scout canoe trip for a week. No disrespect tot he hearty soles who live there, but I would rather deal with any climate change coming than live there in the Winter. I'd bet they would enjoy a bit of global warming that time of year.

On the green topic, it will be interesting to see how the new bill that just passed the Senate impacts large company profits, the market, inflation and the US economy. I have only heard what is in the news which I'm sure is largely biased both ways depending on who the source is. I'm not optimistic but time will tell.

[Panteracer]

Funny I was born in Grand Rapids Min... We left Minnesota
when I was 3... been in Silcon valley almost all my life
Don't think I can survive any other weather as we are spoiled
here... I used to ride my dirt bike where they built the Apple
Spaceship...it was just one orchard away from my house

Bob

[WSSix]

crap, crap, crap. It's all crap, lol. This may be a ways from being over. Hope everyone is holding on.

[Vegas69]

Opporunity, opportunity, opportunity, all I see is opportunity. LOL

Seriously, I do think there will be some serious pain and a storm to weather, but it had to happen. Things were out of control. With change comes opportunity if we are open to seeking it.

[srode1]

Not ready to jump in yet, I'd guess we still have more downside but it depends. When the fed signals they are about done with rate hikes and / or we are close to the mid-term elections I'll start looking again. Of course world events could certainly change that - Ukraine and China / Taiwan could spoil things.

[DWC]

Opporunity, opportunity, opportunity, all I see is opportunity. LOL

Seriously, I do think there will be some serious pain and a storm to weather, but it had to happen. Things were out of control. With change comes opportunity if we are open to seeking it.

Yep, ready to deploy cash sitting on the sidelines when I think the "sale" has peaked. As of now, the S&P at 3300 is my planned entry point.

Not trying to time the market, my gut just tells me we still have a ways to go down before we go up.

Daniel

[WSSix]

Opporunity, opportunity, opportunity, all I see is opportunity. LOL

Seriously, I do think there will be some serious pain and a storm to weather, but it had to happen. Things were out of control. With change comes opportunity if we are open to seeking it.

Yep, ready to deploy cash sitting on the sidelines when I think the "sale" has peaked. As of now, the S&P at 3300 is my planned entry point.

Not trying to time the market, my gut just tells me we still have a ways to go down before we go up.

Daniel

You're both correct. It is a great buying opportunity. I too am waiting for it to settle a little before I start buying again. These last couple weeks have just been very heavy drops for me. Glad I'm not close to retirement age.

[JKnight]

I’ve been buying in August and September, even though we have all the unknowns listed above. I’m not trying to catch the absolute bottom, as it’s a fools errand. Still hanging onto some cash, but picking up shares on down days. With no commission fees, I don’t see any reason not to…

[SSLance]

Phoenix must be the outlier... It's crazy here, inflation is nuts, cost of living rising like crazy yet people just keep moving here. The last 3 houses that sold in our neighborhood sold to friends or family of neighbors with no realtors involved for still very large numbers. I do see some realtor signs stay up longer than before but it seems if it's a desirable place in decent shape, it sells pretty quickly.

We are still just treading water, holding our cards tight and collecting divvies. I thank Greg Weld regularly for getting me into this type of investing and also wonder regularly what he would be thinking and doing during these crazy non-sensical times.

[alex809]

Definitely strange times. Holding div stocks feels safer than ever right now. If Greg got you into stable long plays, sounds like he had solid foresight. Have you ever looked at Reg A+ offerings? They let companies raise up to $75M without a full SEC registration, crazy useful for startups and growth investments. Great explainer here: https://federal-lawyer.com/securities-litigation/investment-lawyer/ppm/reg-a/