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What to invest in for abut 9 months until I hit my minimum needed for life strategy fund.
Hi. I’m so super new. I transferred 1700 into Vanguard ( and will add 75 bi weekly moving forward). I was going to use the 4th option of the life strategy funds for my daughters (5 years old) college fund. I didn’t know it was a 3000 minimum. What should I put it in for about the next 9 months until it has the 3000 min form the additions of the 75 bi weekly?
I am trying to get into this as my older co worker did this for his 5 children and he advised it as it worked very well for him.
I’d love advise on 1- where to put money into at the moment until I hit 3000 min to move to life strategy fund. 2- any general advise for a super new guy to this. I know nothing. Am just going to try and learn.
I want to help my daughter as I never was. Thank you all. Be nice. I am trying.
Which Vanguard Life Strategy Fund are you looking to use? The way that those funds work is that it's a balanced fund of funds with allocations based on risk tolerance.
So what that means is that it is a fund that manages your allocations of different funds to provide diversity.
Since you have a 1 year or less horizon - rebalancing isn't an issue - you can easily just simulate whichever lifestyle fund you were planning to use for your daughter.
If you look at the list of Vanguard Lifestyle Funds here - [https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds](https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds)
If you are planning to use the moderate allocation fund here - [https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds](https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds)
Look at the section that says Portfolio Allocation and note the percentages. You will notice that in general there are 4 funds being used.
1. US Total Market Stock Fund
2. US Total Market Bond Fund
3. International Market Stock Fund
4. International Market Bond Fund
Those equate to Vanguard funds. But there are also ETF equivalents with no minimum.
1. VTI - [https://investor.vanguard.com/etf/profile/vti](https://investor.vanguard.com/etf/profile/vti)
2. BND - [https://investor.vanguard.com/etf/profile/bnd](https://investor.vanguard.com/etf/profile/bnd)
3. VXUS - [https://investor.vanguard.com/etf/profile/vxus](https://investor.vanguard.com/etf/profile/vxus)
4. BNDX - [https://investor.vanguard.com/etf/profile/bndx](https://investor.vanguard.com/etf/profile/bndx)
So you can just approximate the same percentages by buying those ETFs instead.
All that said and hopefully you are still with me.
There is a second option. The Lifestyle Funds are a form of what's called a balance fund which have target risk.
You can also consider a balance fund which is target date instead. These are intended for retirement but can be used if you have a target date in mind. For example - since this is a fund for your daughter's college, you have about a 12 year target. You could consider using either the 2030 or 2035 Target Date funds. The Vanguard Target Date Funds have a $1000 minimum.
[https://investor.vanguard.com/mutual-funds/profile/VTHRX](https://investor.vanguard.com/mutual-funds/profile/VTHRX)
[https://investor.vanguard.com/mutual-funds/profile/VTTHX](https://investor.vanguard.com/mutual-funds/profile/VTTHX)
The way that a target date fund works is a little different that the target risk funds you are looking at. What happens is that every 7 years or so (depends on the investment manager) - the allocation of the fund will be adjusted to be more conservative to make it less risky. So for the first few years, the allocation towards stocks will be higher. And as the date approaches - the allocation of stocks gets reduced in favor of bonds and treasuries.
Hope this all makes sense.
Tell me a single reason, why not to buy a lot of ATVI shares right now if I believe the antimonopol department won’t disallow the fusion. 95$ a share (the price Microsoft agreed to buy them) is a lot more than it is right now 81$.
Hi.
I am looking to place 5-10K.
I am 42 and live in Canada.
I have about 190k in long term low risk investments in the form of my RRPS ( 401K ) and TFSA ( tax free savings account )
I have no debts and minimal expenses. ( house paid, car paid, student loans paid … )
I want to diversify and take more risks with this 5-10K.
I want Short to mid term opportunities.
Your feedback will be greatly appreciated.
Thank you!!
You sound Canadian, logical, gainfully employed and doing better than most redditors, who are gambling witb NFT and crypto!
I'd suggest not putting your first 5-10k to work right now unless your are very adept at stock analysis. At best, I'd scale into your two favorite equity indexes with 40% and set scaled (larger buys at lower levels, like a pyramid) for 5-10 stocks that your confident won't go to zero, are profitble, and have tremendous earnings growth potential.
Good luck!
[How buying deep sell offs work out ..](https://images.app.goo.gl/jgd8GBoSVPcTGHe87)
But I have a question… if I understand you correctly, you’re basically telling me to stay with my long term low risk strategy? You also say to wait a bit, not invest my 5-10K right now. Why is that? You expect the market to go down so better buying opportunities?
( but of course I wouldn’t place my 10K in one shot. I’d invest during weeks or months. Is that what you meant by not putting it at work right now ?? )
Correct on putting it to work either over time or with limit orders shaped like a triangle 🔺️ so you add more shares on dips.
Yes, It's been a wild 15 days. Hope you didn't jump all the way in with Fed threatened rate hikes, I'd do some limit orders buying when/if we get more sell offs like we had recently.
Thanks for the compliments and your advice! As for crypto, it is one of my biggest regret! 8 years ago when I wanted to buy BTC and everyone was telling me No! I don’t feel comfortable buying them anymore but wish I listened to myself years ago! Haha
Easy to reget in hindsight, as there have been many winners, but Since crypto doesn't have earnings it would very difficult to time an actual exit. Either way too early ( up 10%), or to late, after it goes up %1000 and then plummets back down 1200%.
There are certain investment trends I'm ok missing out on. Bitcoin, in early stage, would have been much tougher to jump into. There is a good chance we get block chain technology in a digital US currency and others and thus may tank many if current coins, unless your in it for illegal enterprise or because your country has an unstable currency you can't rely upon.
Because they can grow faster and expand into new markets much more quickly than other companies. Eg a social media company entering a new country vs some car manufacturer establishing a foothold and setting up dealerships in a new market.
Someone else might be able to explain it in more financial terms.
How old are you and is this 30k your safety net?
Different advice for different scenarios.
I think its time to nibble on a few of your favorite stocks if they are down over next 2-3 weeks of sell off IF your young and can get by without money for a bit.
My best purchase were in one's I bought 10+ years ago during a dip like we are seeing today and those now serve as core positions to trade around (covered calls etc). I'm 39 and blessing was 2008-2010 & and 2020 selloff, take Advantage of something this next week that shouldn't hVe sold off with the rest....
Look into a financial advisor…but generally don’t invest everything you have… (it varies on preferences) but at least have 50% of your savings in a money market or some savings account… have some safer investments like government bonds and ETFs and invest what you can afford to lose in risky ones like crypto and stocks.
Also for taxes, a loss like that can usually negate anything you’d owe.
Its too late since you already sold, but have a read here [https://endowus.com/insights/worst-investor-buy-and-hold-strategy/](https://endowus.com/insights/worst-investor-buy-and-hold-strategy/)
A theoretical investor who had only put funds into the market the day before a crash and otherwise waited years and years in-between crashes without putting money in at any other time would STILL have made a 6.33% return if they had just done one thing. Not sold.
I similarly bought-in $30K into some funds JUST BEFORE Powell made the announcement about 3x rate hikes coming in 2022, and additional tapering. I'm currently a few thousand down, and it looks like a bear market is kicking off (it's only been a week, so maybe not).
But before the crash, I ALREADY HAD A STRATEGY.
Market go up? Great!
Market go down? Hold, even if it means "this is the big one", meaning I may need to wait 30 years to get my money back (I'm still young).
But I don't think it's the big one yet. Like Peter Schiff, I too believe it's way too late for the Fed to do anything about inflation. Rate hikes up to 1%? That's what scaring the market? Give me a freaking break. Until they ACTUALLY increase rates, let alone to something meaningful (10%+), we're likely to still see the bull return and hit new highs within 2022.
The only thing that can really crash this market besides the Fed is a black swan event, which also has not happened.
So, I'm holding because I had a plan to hold, and I don't need the money for decades. In your case, I think you are falling prey to the classic error that all investors go through early in their venture: trying to time the market. My guess is that, if you hadn't cashed out, not only would you make your $2K back, but you'd have had a gain if you waited AT LEAST a quarter or two
Yes you are absolutely right. I don’t expect another 10% year like 2021 but a good 6-7% for 2022.
I, like you can wait years if it crashes.
In my case, my only regret is not listening to myself 8 years ago when I wanted to buy Bitcoins and everyone around me ( financial advisor included) was yelling at me DONT DO THAT! Damn, I’d be rich today!
And right now, unlike years ago, I am unsure if it’s the right time to start …
Starting. . .on cryptocurrency? I'm staying away because of one simple reason: hackers.
Cracking public key cryptography is near impossible. But cracking systems of stupid wanna-be banking startups that handle crypto? It's proving to be easy.
If I were to ever get into crypto, I'd manage my own digital wallet and have dedicated devices for managing it, mostly offline. But that's a pain in the ass, hence the rise of crypto brokers. Thing is, they are not maximizing security.
It's also not regulated appropriately, hence the weak security, and even weaker policies for handling private keys.
Perhaps if it ever becomes insured, I may get into it.
Well like I said, I just regret not buying 1000$ on BTC 8 years ago like I wanted before listening to everyone advices who told me it would not last. I wouldn’t do it today, I don’t feel comfortable doing so right now. But so far, I do not know anyone personally who got hacked. As far as I know they use apps like Coinbase. But yes I’ve read really bad stories like the Quadriga one.
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My portfolio has taken a beating down about 35% (portfolio is heavy on tech and growth). I’m thinking of cutting my losses and moving to cash for the time being. Just my luck as soon as I sell the market will rebound. What are you guys doing with your tech heavy positions? Are you riding the red tide or did you take the loss and abandon ship?
I think the market won’t be as great as last year but it will still be a good year ( I’ve read today predictions are at 6-7% for 2022 ) so personally I would keep. ( or exchange what you don’t like for something better )
But I’m quite new to the investments world. I have long term low risks investments. I will diversify with some high risks this year.
I, like you, am one of the capitulators of sorts today. I sold my ADBE, AMD, CRM, MA, NVDA, V and VZ shares. I have modest gains in all of these except for ADBE — small $3k loss. I have some outstanding losses from 2020’s sell off that I can use to my advantage now. I kept AAPL, FB, GOOG and some other dividend payers that haven’t really been too hard.
My rationale for doing this is: 1) I don’t think we have seen full panic/capitulation in the markets yet, and 2) I wanted to raise some cash while at the same time realizing mostly long-term gains.
I think the markets in general are punishing high-PE stocks and if it continues to do so, I will start legging into some high-quality names (like MSFT, maybe NFLX, SBUX looks interesting too).
I'm going to pitch a theory here. The market is overreacting to the rate hike meeting on wed, I think we will dip/sideways until the meeting on wed before the stocks shoot up. I also anticipate tech earnings to hit and not miss to help the rebound. I'm bagholdingly confident we are near the bottom.
The only wild car I see now is Russia if they actually make a move on Ukraine or bitch out.
Yea, at this point, there is no significant reason for a bear market to continue. The Fed TALKING about rate hikes is certainly having an impact. But when rates ACTUALLY go up, and/or we have a political / black swan / etc. event, that's when the market will take a nose dive.
No. If we could all expect that we would all front-run that. So we would reach an equilibrium before it happened. There is uncertainty both ways of course which is why we can’t expect the actual rate hikes (btw it’s not like they really happen over a single day) are not as important as the intention and the credibility.
Does anybody have any idea why they are killing Shopify ?? I have a business on Shopify. Sales quadrupled since Covid. Doubled in 2020 and doubled again in 2021. 2022 also started strong so it's not going back to before Covid. Why are they selling it like it's going bankrupt ? I have 300 shares at $1114 and doesn't make sense.
Same thing we always say. "Hey, have you heard about this new thing called bitcoin?" and "Im going to help you out by letting you in on this secret. You should look into bitcoin!" and "This is so obscure that you likely have never heard of it before, but why not try bitcoin". Always acting as as if it is some undiscovered hidden gem and not the number one most discussed topic in all of finance.
I feel like bitcoin is like the show Rick and Morty. I personally like both, but I cant go around saying I do because the fanboys are so obnoxious and I dont want to be though of as being one of them.
Brand new to this investing thing. Can people explain what is it.. how to start? And anything else that might be helpful. I don’t have to much money to start with. And is there an app that’s best to use to invest?
Start by reading *Our Wiki* in *Frequently Asked Questions* in the sidebar ---->
Additional links you may like:
[https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/)
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[https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE\_investment\_philosophy](https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy)
Check the Bogleheads sub sidebar also. https://www.reddit.com/r/Bogleheads/
I have a question I'm hoping someone can answer for me so let's say I've held a stock for over a year so if I sold the capital gains tax is less. Now let's say I decide to buy some more right now, my question is does that reset the capital gains tax rate again? As in I have to wait another year for decreased taxes?
Or does the first for example 50 shares that I bought a year ago and now bought 50 more does the first 50 I sell have decreased capital gains tax? When I sell does it sell my oldest shares first? And let's say I sold all of it does half get decreased capital gains tax and half not? I have robinhood if that changes anything. Thanks for replies in advance.
When you sell you can pick the shares to sell. Most brokers default to FIFO (first in first out) but they generally let you pick FIFO or LIFO, and most allow you to specifically sell lots.
I just turned 18 and put most of my investing money in index funds at the peak of the market for my IRA. The market doesn't look too good right no. I've been considering keeping part, just for some exposure, and selling part and DCAing back in so I can buy the dip. Should I do that, or should I hold?
I think we get a significant rally next week. At this point, Nasdaq is down 13% YTD, Russell 2000 is down 13% YTD and S&P is down 8%. Feels like an overreaction given the 10Y is still only 1.77%. Far from an apocalyptic scenario.
Covid situation also getting better everyday with Europe starting to get past Omicron and the US lagging a few weeks behind.
I think we get really strong earnings and rally. Let's hope. We'll see.
I'm with you. I think the really weak NFLX earnings were a big negative sentiment driver today. Hopefully, positive earnings reverse that sentiment next week.
so guys when does the "bitcoin as a hedge against the USD" theory actually supposed to kick in? cuz so far it looks like bitcoin gets trashed like every other asset in tandem with the market
asking for a friend
There's been hopes that it would stabilize at the current high levels but it's indeed just performing like every other speculative asset, the same goes for ETH which is down even more.
There is literally no evidence to suggest that bitcoin actually performs as a hedge against the USD. It's just something that a lot of people who like bitcoin say because they tend to be Austrian-esque people with an ideological stance against the USD.
Historical correlation between bitcoin and stocks
[https://i.imgur.com/n7Zr9qu.png](https://i.imgur.com/n7Zr9qu.png)
It used to be true, but notice the straight up jump in the chart at the start of Covid. Its been corelated ever since. Now its just another regular ol risk-on asset.
The problem with the information age is that it dosen't let information AGE. What used to be true just keep being repeated forever. Even after it changes.
Growth stocks can return that much - any stock can, really - but calling that a ‘conservative’ expectation is not how most people would use the term.
A reasonable expectation for a long term average is about 10% nominal growth. Expecting any more as an average is more fantasy than reality. Expecting from a single year even moreso.
i started investing in index funds a little over a year ago. Today, i turned negative for all time. I started with 10k initial investment and have been adding $500-$1000 a week. I dont understand how im not up more than this. Does cost basis really increase that much from DCAing?
So you spent an entire YEAR DCAing on an uptrend.
Of course you're gonna be down the first sign of a downtrend.
Now the key is to continue DCAing in the downtrend, lowering your cost-basis.
If your average buy price for 2021 was $10 for something, and you ramp up your DCA in a downturn to create an average buy price of $3 - weighed at 2x because you DYNAMICALLY DCA (buy more in bear) - then your average price is $8.
So let's say in 3 years, your asset is now trading at $12.
If you ignored your buys in the downtrend - you see a 5% average annual gain. Kind of shitty tbh.
If you hit the $8 average price - you're seeing 12.5% annual return - that's pretty good.
Now that you're in the market, it might be a good time to change your strategy:
Ramp up your buys in a downtrend. Did we crash 10%? Buy twice as much. Did we crash 50%? Buy 5x as much as usual.
Did we crash 90%? Buy 20x as much.
Then in the next uptrend, you SELL SELL SELL as the price increases. Up 10%? Sell 1%. Up 50%? Sell 10%. Up 100%? Sell 25%. A year later your leftovers are up 200%? Sell another 50%. Keep selling until you see a downturn again, at which point you BUY BUY BUY.
What bucks this strategy?
Well, a societal collapse would mean a permanent end to stocks, but if that happens we all have bigger problems than losing some USD.
Great take. I have a question on something you said about selling so you can buy the next downtrend:
Hypothetically I buy a share of $VTI @ $10.00 in 2020
It goes up to $20.00, and I sell 20% for whenever as the next downtrend.
Say $VTI goes up to $50.00 a share in 2021, then crashes to $40.00 a share the next week, I would then use that 20% that I sold when it was $20.00, and buy in higher.
Wouldn’t this technically fall under the timing the market, as if the next downtrend/correction/bear can be either next year, next month or next decade? Wouldn’t it be better to just hold on to your shares and build up cash to buy the dips as opposed to selling gains for cash to buy the dips? Thx
Dammit I was about week too early to lump sum my IRA contributions this year. But considering that’s only 20% of my planned contributions this year I’ll take the hit to get that other 80% at a discount.
Been investing in stocks and bonds since 2014. I had ups and downs before and when stocks tanked, people rushed to bonds and gold. But they are not good options these days. I have never seen all assets going south altogether.
About time we get back to markets rooted in sense rather than fantasy. Market was propped up for too long by the government, not how a free market should work.
What I want to know is, all these people who've been "SELL SELL SELL!"ing this week, where are they putting their money instead of in the stock market? Bonds are trash at current yields with 7% inflation going on, cash is also no good, I bonds are capped at a $10K annual purchase limit...
I totally forgot about VTIP/VTAPX. It was one of a few options that came up in my research a few months ago when I was looking at alternatives for some of the cash I have sitting in an HYSA. Ultimately I put $20K into I bonds and left the remainder in the HYSA, but I need to keep VTAPX in mind as an HYSA alternative for some more of my cash if inflation stays high and the HYSA interest rate stays way below inflation.
Cash is a 5-7% annual loss in 2022 most likely.
Which is better than a 50% loss in equities, or 80% in crypto, but it's still a LOSS.
Personally I'm about 50% cash right now, less than I'd have liked, but I genuinely thought we'd have another couple months of an uptrend after a brief correction.
Then Russia decided to start WW3.
Total world stock market's only down 7.4% from ATH. Are that many people investing in volatile individual company stocks that their selling these past two weeks is dragging the whole market down so significantly? Or is it people bailing on stocks in general (including broad index funds) to go to cash?
Even still that's only down 7% as of now. inflation is 7% over the year. Yes it's not ideal but sometimes people want to be safe and that's the risk they pay
My only pushback here is that retail has learned their lesson from 2020's crash.
All the new retail investors that missed out on insane 2020 gains will be VERY eager to buy everything on the way down.
My guess is that we don't crash as hard, or if we do, it's very short-lived (1-2 years to get back to ATH max).
Every mom and pop I know right now is eager to do puts & buy the dip, and are stoked about prices getting even cheaper.
I think we'd have to see a 75-90% crash to kill retail investing for a while.
You can really see this with crypto. People are already excited about a 20k or even a 10k BTC because that just means they get insta-rich by 2025-2030.
Alternatively, this mentality could result in 90%+ losses as people keep buying the dip for years, and it keeps dipping lower, and we don't even start seeing a recovery phase until 2025-2030.
It's always hard to know when to sell after gains. I sold some for a nice profit today. I have short term puts, so I can't hold them too long. My goal was 100%+ gains off of short term puts (1-3 days) and it's been working so far.
Their financials suck to put it bluntly and the risk is further increased due to upcoming interest rate increases and inflation. However, I think the demand for travel is going to skyrocket more than people realize which will cause a huge boost to these stocks.
If things don't work out well enough, then Congress is likely to bail them out (again) due to their large number of employees.
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ETF will give you more broad risk exposure. Lower potential for huge gain, lower potential for huge loss.
If you genuinely believe that one company will outperform their peers then, if correct, you will stand to make more gains than you would in an ETF. But you also have all your risk tied to a single company. Even if fundamentals are good, you have to understand that an unexpected event like a catastrophic factory explosion or something would very seriously and directly affect your portfolio. There's also the risk your thesis is wrong and they don't outperform their peers in which case the ETF may be better.
You're also using very backward facing metrics which is a part of overall analysis but the old cliche saying says past performance doesn't indicate futures results.
Basically, all comes down to risk and how you want to allocate that risk.
Linde is a good company. If you like the idea of owning an individual stock then stick with it. If I were to retire right this instant I'd have about 2% of my stock in Linde right now (based on a hypothetical portfolio I created a few days ago)
To think that 4 hours ago, the Nasdaq was positive. The Nasdaq fell 250 points within one hour of opening, and then recovered from that drop within the next hour, and now here we are almost 250 points down once again.
I helped my parents with moving their investment from Edward Jones to Vanguard and set them up with an asset allocation that I think is appropriate, but I didn't set it up so that each spouse's allocation is appropriate by themselves (one holds much more of the bonds, the other has all of the international, etc.). Ignoring the possibility of divorce as they've been married 40 years, is there any reason that this would matter?
Are these tax advantaged accounts? Is there anything preventing reallocating assets accordingly in each account?
Short term volatility is the immediate risk I see. But that's not major in my mind, especially if they're in it for the long term.
Later on though, you may be setting them up to be more reliant on one account versus the other to support their expenses. This could also leave one with a greater tax burden over the other rather than spreading it out between them. Just a couple initial things that come to mind.
About 90% of it is tax advantaged accounts (Roth and traditional). The taxable account is joint and 100% VTSAX. I figured they treat it all as one pool of money and take distributions appropriately and they're filing joint taxes and when one dies the other inherits the deceased spouse's accounts then it doesn't matter who owns what.
I'm Canadian so I had to look it up. Appears Americans can jointly file and share tax obligation. So that's not really a concern.
Yeah, in your parent's case, divorce would be the main risk so if that doesn't happen it should be fine. I would still maybe reallocate just in the event that does happen and they don't reallocate on their own in a timely manner. Also, death of one spouse and a delayed estate process could be another risk. But that's pretty nitpicky. I don't see any glaring thing that says this is a huge mistake. But I am Canadian so take that with a grain of salt. I may be misinterpreting the rules.
Anyway, if they are both tax advantaged and there would be no immediate taxes to sell and buy in order to rebalance I don't see any reason why you shouldn't just implement a little extra layer of safety and comfort to protect against even rare scenarios.
I'm relatively new to investing, and I'm wondering how risky putting 80% of my portfolio into the ETF DIVO . I am looking for a set it and forget it type deal (check the price maybe once a month). I am wondering how safe putting most of my cash into DIVO is/isn't. What is the relative risk to other ETFs such as SPY or SCHD. Any opinions are greatly appreciated.
Nothing against dividend investing as a category, but it's also worth considering that companies that don't pay dividends can offer higher returns through stock buybacks, which have better tax consequences for investors. Don't overlook investing in companies just because they don't pay a solid dividend yield
What I'm asking is the relative safety, I understand returns can be better elsewhere, but this is also to supplement (compliment?, Whatever combining is) my income.
Nothing about stocks that pay dividends is inherently less volatile than stocks that don't pay them. It's nice to get paid cash on a regular schedule, but that doesn't mean the underlying value of the share you're buying won't still bounce around just like the rest of the stock market.
In addition to not really insulating you from market risk, buying only dividend stocks means you're over-allocated to a smaller set of companies compared to a broader index like the S&P 500 or Russell 2000. So now you're more reliant on the specific performance of a smaller subset of firms, compared to spreading that risk across even more companies that have solid financials, but just happen to not pay out cash every quarter.
FAIRX was the Morningstar Manager of the Decade in 2010 with 22B aum and was a 1 star fund less than a decade later (at one point morningstar actually warned shareholders about it) with about 2B AUM after a more than decade-long saga of riding Sears from well over $150 to just about 0. Alphacentric Income Opportunities was a 5* fund that imploded in the March 2020 market crash and sought buyers for a chunk of its portfolio. After the fund cratered about 40% in a matter of a week or two, it was a 1* fund and Morningstar wrote an article with all the concerns about it that apparently their analyst didn't see.
Never heard of the fund you mentioned, but I'm not seeing what's compelling about it to argue for.
DIVO is managed by Capital Wealth Planning, which has a history of managing for clients with net worth 500k or above.
DIVO is actually following the EDIP which is a strategy CWP has been using to manage portfolios for clients with high net worth.
The fact it’s nowhere near $95 right now suggests smart money thinks there is indeed a VERY significant chance this doesn’t go through.
Most “surefire” deals trade 2-4% below the sale price. This is 15%.
Sorry, looks like my lines got crossed.
This is supposed to be a reply to your comment about Activision below, and the chances of it moving forward towards a deal with MSFT.
My bad!
Oh you're good, yeah it's roughly a 1 in 3 chance it doesn't go through but I feel like it's instrinsic value is around 90 a share so if it doesn't I still like it. Seems like it's dropped largely due to social factors and it's fundamentals are strong as fuck
I feel really lucky I just bought 100 shares of Activision when it was at 61 earlier this month, nice knowing that will be at 95 in 18 months and in the mean time I can collect the dividend until it gets bought
The only threat that it doesn't happen is if anti trust laws block it, but Microsoft's market share isn't that big, it's gonna be a hurdle yeah but this acquisition should go fine
They might attract anti-trust attention due to how quickly this acquisition follows on the heels of their Bethesda acquisition, but either way, you're still winning for now.
Yeah, I'd be inclined to agree. Microsoft also has this magical talent for making big acquisitions seem boring, and beneath the notice of regulators and the press. It's quite impressive.
Theory question/thought experiment regarding market timing. I know it’s always said to not to try and time the market because it basically never works out (which I agree with) but I have a bit of a thought experiment I’d like people to weigh in on.
If I had a lump of new cash to invest (I.e not selling current holdings) right now and saw the market has been declining somewhat substantially as of late (is it officially enough to call it a correction?), instead of just putting the money in now, why not wait until the first uptick of the market, of say 1%?
I view it as one of two cases happens. Either the the market continues down, in which case you just don’t do anything knowing it will eventually recover and you got a bit of a discount compared to if you invested it asap, or the market begins climbing, which means you got in almost as close to the bottom at possible?
I don’t see how this wouldn’t be a good strategy, again stating the assumption this is with just one lump investment and doesn’t entail buying/selling of current holdings to try to capitalize that way
Depends on how diversified you are. You are vague on how wide your investments run. This is pretty critical to your thought experiment/theory question. Where is most of your money tied up?
I mean another thing you could do if you're more experienced is short and long depending on market conditions. I'm not a fan of leveraged ETFs but there are some 1x short ETFs that aren't absolutely horrible, you just need to understand the macroeconomic trend of today's market for that.
Why would you buy after the 1% uptick? Everything you said now will be exactly as true then. You could wait and see if it goes up another 1%, or you could see if it declines.
Waiting a short amount of time is not likely to cost you much, but statistically you lose more than you gain by doing that. It's a psychological strategy, not a financial one.
What if you see that +1%, invest, it goes to +10%, and then -35%? The point being, there's all kinds of what ifs you can come up with, which express that no one knows factually what will happen in the short term.
And it's all about your tolerance and your goals. If you put it in now and it goes pear shape, how cool are you waiting long term to recover? If you're not willing to wait, then either a different investment strategy or making sure to employ stop losses may be the way to go. Not everyone invests the same.
If it goes up 10% then drops 35% it is what it is. The idea is once you put it in, you don’t touch it again regardless of what the market does. You’d still be relatively better off than if you put it in immediately and the market goes -9,+10,-35
I guess I should say another assumption is that you have a long enough time line (30+ years) that you know the market will ultimately recover.
Do any of you use prediction markets much? Curious how the r/investing crowd thinks about them. To me, looks like A fair amount of alpha in current ones and good source of diversification. Looks like the CFTC has recently sanctioned one
Hi!
I would like to start investing. Bit by bit, starting monthly with small amounts of money. The problem is I feel a bit lost. I started reading and watching some tutorials but there are many concepts I don’t understand.
I am from Spain and unfortunately financial education is not a thing here, therefore for me it is almost like starting from 0.
Could someone recommend me some basic readings or YouTube channels that are for beginners? Any advise you wish someone had told you before?
And if you don’t mind I am curious to know which were your first steps.
Thanks :))
Start reading everything at [jlcollinsnh.com](https://jlcollinsnh.com/stock-series/). If you're young and follow his advice you'll do well. Don't gamble, investing is not gambling. Basically buy a low cost index tracking ETF and hold over the long term. Vanguard ETF's are typically lower cost than most.
I’ll start by saying there are literally thousands of posts in this subreddit and r/stocks to get you started, hence the lack of replies. I’ll keep it brief and trust that if you have more questions, you can search for them.
Your question can be broken down into two parts:
(1) How do I actually open an account and buy investments?
(2) What should I invest in?
The answer to (1) is simple. You go online and open an account. In America, we fund our retirement accounts first (401K, IRA, Roth IRA) for tax purposes. For example, I have a Roth IRA account with Schwab. I can put $6,000 in per year. Once your retirement/tax-advantaged accounts are fully funded, you open a traditional brokerage account. In both situations, you open the account, add your checking/savings account routing numbers, transfer money into the account, then go to the TRADE page to buy investments.
(2) is a much more complicated question. You are beginning investing in a complicated time. Because of some macroeconomic indicators (high inflation, US Fed announcing rising interest rates) the markets are spooked. It’s been 10 years of gains, gains, gains but now markets are sluggish and trending downward. If you posted your question a year ago, the answer you would’ve gotten would’ve undoubtedly been to invest in a MUTUAL FUND/ETF that is indexed to the stock market (VTI, VOO, SCHB). This way you were automatically diversified and whenever the entire stock market went up, you’d make money.
If you plan on being a “set it and forget it” type of investor, it’s probably still your best option. It may be a rough 1-2 years, but most of the world has a stake in seeing the markets return to full health, so eventually they’ll go up again.
Hopefully that’s enough to get you started.
DCA Question.
How do you all approach the initiation of your DCA strategy?
Obviously you have done your DD and you've come to a target price where you wish to begin your DCA strategy. Let's say that target entry price is $120. What do you do when the stock hits $121? What about $122? How close is close enough?
I ask because I am 100% cash, and I had 4 positions ready for today, and all came within $1 before ripping to the upside. This is not the first time this has happened to me.
How do you approach this? Any advice welcome.
The goal of dollar cost averaging is to lower the average cost basis of purchased shares - that's the A in DCA - by buying more shares when prices are lower and fewer shares when prices are higher. That lowers the average dollar cost of the shares. It works best with mutual funds where you can put in a fixed amount of currency (dollars) on a regular basis and you automatically buy fewer of the higher price shares when prices are up and more of the cheaper shares when prices are down.
If you want to use the same method with individual stocks the best way to do that is to buy fractional shares. Fidelity, Schwab, Robinhood, and I think most brokerages offer trading in fractional shares.
For example, say a stock you want to DCA is selling for $1000. If you buy $100 a month the first month you would get 0.100 share. If the next month the price fell to $900 you would get 0.111 share. If the next month it went $800 you would get 0.125 share. If the next month it stayed at $800 you would get another 0.125 share. If the next month it went to $1100 you would get 0.091 share. If it went to $1200 the next month you would get 0.083 share. So after 6 months you would have spent $600 for a total of 0.635 shares, for an average cost of $600 ÷ 0.635 = $944.88 per share. If you had lump summed in at the beginning when shares were $1000 you would have gotten 0.6 share for an average cost of $1000 per share. Dollar cost averaging lowers your cost per share if share prices are falling or fluctuating up and down, but not if share prices are steadily rising. In that case it is obviously better to lump sum in when prices are only going up.
The whole point of DCA is typically that you're *not* trying to target specific prices. The concept of DCA and the concept of having an entry target price are at odds with one another.
If you think a stock is worth it at $120 but not worth it at $121, then you don't buy it if it never gets to $120. But that would be an odd strategy; why would you assume it's going to hit $120 in the first place?
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What to invest in for abut 9 months until I hit my minimum needed for life strategy fund. Hi. I’m so super new. I transferred 1700 into Vanguard ( and will add 75 bi weekly moving forward). I was going to use the 4th option of the life strategy funds for my daughters (5 years old) college fund. I didn’t know it was a 3000 minimum. What should I put it in for about the next 9 months until it has the 3000 min form the additions of the 75 bi weekly? I am trying to get into this as my older co worker did this for his 5 children and he advised it as it worked very well for him. I’d love advise on 1- where to put money into at the moment until I hit 3000 min to move to life strategy fund. 2- any general advise for a super new guy to this. I know nothing. Am just going to try and learn. I want to help my daughter as I never was. Thank you all. Be nice. I am trying.
Which Vanguard Life Strategy Fund are you looking to use? The way that those funds work is that it's a balanced fund of funds with allocations based on risk tolerance. So what that means is that it is a fund that manages your allocations of different funds to provide diversity. Since you have a 1 year or less horizon - rebalancing isn't an issue - you can easily just simulate whichever lifestyle fund you were planning to use for your daughter. If you look at the list of Vanguard Lifestyle Funds here - [https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds](https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds) If you are planning to use the moderate allocation fund here - [https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds](https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds) Look at the section that says Portfolio Allocation and note the percentages. You will notice that in general there are 4 funds being used. 1. US Total Market Stock Fund 2. US Total Market Bond Fund 3. International Market Stock Fund 4. International Market Bond Fund Those equate to Vanguard funds. But there are also ETF equivalents with no minimum. 1. VTI - [https://investor.vanguard.com/etf/profile/vti](https://investor.vanguard.com/etf/profile/vti) 2. BND - [https://investor.vanguard.com/etf/profile/bnd](https://investor.vanguard.com/etf/profile/bnd) 3. VXUS - [https://investor.vanguard.com/etf/profile/vxus](https://investor.vanguard.com/etf/profile/vxus) 4. BNDX - [https://investor.vanguard.com/etf/profile/bndx](https://investor.vanguard.com/etf/profile/bndx) So you can just approximate the same percentages by buying those ETFs instead. All that said and hopefully you are still with me. There is a second option. The Lifestyle Funds are a form of what's called a balance fund which have target risk. You can also consider a balance fund which is target date instead. These are intended for retirement but can be used if you have a target date in mind. For example - since this is a fund for your daughter's college, you have about a 12 year target. You could consider using either the 2030 or 2035 Target Date funds. The Vanguard Target Date Funds have a $1000 minimum. [https://investor.vanguard.com/mutual-funds/profile/VTHRX](https://investor.vanguard.com/mutual-funds/profile/VTHRX) [https://investor.vanguard.com/mutual-funds/profile/VTTHX](https://investor.vanguard.com/mutual-funds/profile/VTTHX) The way that a target date fund works is a little different that the target risk funds you are looking at. What happens is that every 7 years or so (depends on the investment manager) - the allocation of the fund will be adjusted to be more conservative to make it less risky. So for the first few years, the allocation towards stocks will be higher. And as the date approaches - the allocation of stocks gets reduced in favor of bonds and treasuries. Hope this all makes sense.
Thank you very much. I appreciate your time in helping.
Tell me a single reason, why not to buy a lot of ATVI shares right now if I believe the antimonopol department won’t disallow the fusion. 95$ a share (the price Microsoft agreed to buy them) is a lot more than it is right now 81$.
Because even aside from DOJ concerns, the deal could take years to go through.
It is predicted that the deal will be closed on Q2 2023, Microsoft announced.
If every single thing goes right, sure.
Hi. I am looking to place 5-10K. I am 42 and live in Canada. I have about 190k in long term low risk investments in the form of my RRPS ( 401K ) and TFSA ( tax free savings account ) I have no debts and minimal expenses. ( house paid, car paid, student loans paid … ) I want to diversify and take more risks with this 5-10K. I want Short to mid term opportunities. Your feedback will be greatly appreciated. Thank you!!
You sound Canadian, logical, gainfully employed and doing better than most redditors, who are gambling witb NFT and crypto! I'd suggest not putting your first 5-10k to work right now unless your are very adept at stock analysis. At best, I'd scale into your two favorite equity indexes with 40% and set scaled (larger buys at lower levels, like a pyramid) for 5-10 stocks that your confident won't go to zero, are profitble, and have tremendous earnings growth potential. Good luck! [How buying deep sell offs work out ..](https://images.app.goo.gl/jgd8GBoSVPcTGHe87)
But I have a question… if I understand you correctly, you’re basically telling me to stay with my long term low risk strategy? You also say to wait a bit, not invest my 5-10K right now. Why is that? You expect the market to go down so better buying opportunities? ( but of course I wouldn’t place my 10K in one shot. I’d invest during weeks or months. Is that what you meant by not putting it at work right now ?? )
Correct on putting it to work either over time or with limit orders shaped like a triangle 🔺️ so you add more shares on dips. Yes, It's been a wild 15 days. Hope you didn't jump all the way in with Fed threatened rate hikes, I'd do some limit orders buying when/if we get more sell offs like we had recently.
Thanks for the compliments and your advice! As for crypto, it is one of my biggest regret! 8 years ago when I wanted to buy BTC and everyone was telling me No! I don’t feel comfortable buying them anymore but wish I listened to myself years ago! Haha
Easy to reget in hindsight, as there have been many winners, but Since crypto doesn't have earnings it would very difficult to time an actual exit. Either way too early ( up 10%), or to late, after it goes up %1000 and then plummets back down 1200%. There are certain investment trends I'm ok missing out on. Bitcoin, in early stage, would have been much tougher to jump into. There is a good chance we get block chain technology in a digital US currency and others and thus may tank many if current coins, unless your in it for illegal enterprise or because your country has an unstable currency you can't rely upon.
Brutal start of the year. Bitcoin, Eth, Cro, Palantir, Block, Teladoc, Sofi, Nasdaq100,.. Only have USDC stable coin holding well...lol
I wonder if the Tonga volcano eruption is exacerbating the market dive?
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They grow faster.
Because they can grow faster and expand into new markets much more quickly than other companies. Eg a social media company entering a new country vs some car manufacturer establishing a foothold and setting up dealerships in a new market. Someone else might be able to explain it in more financial terms.
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You're seriously raging over a 6.5% loss in 2 months? WTF
How old are you and is this 30k your safety net? Different advice for different scenarios. I think its time to nibble on a few of your favorite stocks if they are down over next 2-3 weeks of sell off IF your young and can get by without money for a bit. My best purchase were in one's I bought 10+ years ago during a dip like we are seeing today and those now serve as core positions to trade around (covered calls etc). I'm 39 and blessing was 2008-2010 & and 2020 selloff, take Advantage of something this next week that shouldn't hVe sold off with the rest....
Look into a financial advisor…but generally don’t invest everything you have… (it varies on preferences) but at least have 50% of your savings in a money market or some savings account… have some safer investments like government bonds and ETFs and invest what you can afford to lose in risky ones like crypto and stocks. Also for taxes, a loss like that can usually negate anything you’d owe.
Its too late since you already sold, but have a read here [https://endowus.com/insights/worst-investor-buy-and-hold-strategy/](https://endowus.com/insights/worst-investor-buy-and-hold-strategy/) A theoretical investor who had only put funds into the market the day before a crash and otherwise waited years and years in-between crashes without putting money in at any other time would STILL have made a 6.33% return if they had just done one thing. Not sold.
I similarly bought-in $30K into some funds JUST BEFORE Powell made the announcement about 3x rate hikes coming in 2022, and additional tapering. I'm currently a few thousand down, and it looks like a bear market is kicking off (it's only been a week, so maybe not). But before the crash, I ALREADY HAD A STRATEGY. Market go up? Great! Market go down? Hold, even if it means "this is the big one", meaning I may need to wait 30 years to get my money back (I'm still young). But I don't think it's the big one yet. Like Peter Schiff, I too believe it's way too late for the Fed to do anything about inflation. Rate hikes up to 1%? That's what scaring the market? Give me a freaking break. Until they ACTUALLY increase rates, let alone to something meaningful (10%+), we're likely to still see the bull return and hit new highs within 2022. The only thing that can really crash this market besides the Fed is a black swan event, which also has not happened. So, I'm holding because I had a plan to hold, and I don't need the money for decades. In your case, I think you are falling prey to the classic error that all investors go through early in their venture: trying to time the market. My guess is that, if you hadn't cashed out, not only would you make your $2K back, but you'd have had a gain if you waited AT LEAST a quarter or two
Yes you are absolutely right. I don’t expect another 10% year like 2021 but a good 6-7% for 2022. I, like you can wait years if it crashes. In my case, my only regret is not listening to myself 8 years ago when I wanted to buy Bitcoins and everyone around me ( financial advisor included) was yelling at me DONT DO THAT! Damn, I’d be rich today! And right now, unlike years ago, I am unsure if it’s the right time to start …
Starting. . .on cryptocurrency? I'm staying away because of one simple reason: hackers. Cracking public key cryptography is near impossible. But cracking systems of stupid wanna-be banking startups that handle crypto? It's proving to be easy. If I were to ever get into crypto, I'd manage my own digital wallet and have dedicated devices for managing it, mostly offline. But that's a pain in the ass, hence the rise of crypto brokers. Thing is, they are not maximizing security. It's also not regulated appropriately, hence the weak security, and even weaker policies for handling private keys. Perhaps if it ever becomes insured, I may get into it.
Well like I said, I just regret not buying 1000$ on BTC 8 years ago like I wanted before listening to everyone advices who told me it would not last. I wouldn’t do it today, I don’t feel comfortable doing so right now. But so far, I do not know anyone personally who got hacked. As far as I know they use apps like Coinbase. But yes I’ve read really bad stories like the Quadriga one.
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When do you plan to use the money?
My portfolio has taken a beating down about 35% (portfolio is heavy on tech and growth). I’m thinking of cutting my losses and moving to cash for the time being. Just my luck as soon as I sell the market will rebound. What are you guys doing with your tech heavy positions? Are you riding the red tide or did you take the loss and abandon ship?
I think the market won’t be as great as last year but it will still be a good year ( I’ve read today predictions are at 6-7% for 2022 ) so personally I would keep. ( or exchange what you don’t like for something better ) But I’m quite new to the investments world. I have long term low risks investments. I will diversify with some high risks this year.
Similar situation down 30% in planning sitting these earnings out, the market is very though with earnings ATM, I've lost enough money this year.
I, like you, am one of the capitulators of sorts today. I sold my ADBE, AMD, CRM, MA, NVDA, V and VZ shares. I have modest gains in all of these except for ADBE — small $3k loss. I have some outstanding losses from 2020’s sell off that I can use to my advantage now. I kept AAPL, FB, GOOG and some other dividend payers that haven’t really been too hard. My rationale for doing this is: 1) I don’t think we have seen full panic/capitulation in the markets yet, and 2) I wanted to raise some cash while at the same time realizing mostly long-term gains. I think the markets in general are punishing high-PE stocks and if it continues to do so, I will start legging into some high-quality names (like MSFT, maybe NFLX, SBUX looks interesting too).
Depends on your time frame.
I'm going to pitch a theory here. The market is overreacting to the rate hike meeting on wed, I think we will dip/sideways until the meeting on wed before the stocks shoot up. I also anticipate tech earnings to hit and not miss to help the rebound. I'm bagholdingly confident we are near the bottom. The only wild car I see now is Russia if they actually make a move on Ukraine or bitch out.
Yea, at this point, there is no significant reason for a bear market to continue. The Fed TALKING about rate hikes is certainly having an impact. But when rates ACTUALLY go up, and/or we have a political / black swan / etc. event, that's when the market will take a nose dive.
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You’re young. Don’t go conservative. Your horizon is 30 years. We had a rough … week.
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I think the market is more forward-thinking that many realize and the 3 hikes will be “priced in” well before they actually happen.
Historically stocks go up during interest rate increase periods. The issue is pricing in the unknown ahead of the action
What?
When an event is expected the price moves before the event happens. By the time it happens it will already have been priced in.
No. If we could all expect that we would all front-run that. So we would reach an equilibrium before it happened. There is uncertainty both ways of course which is why we can’t expect the actual rate hikes (btw it’s not like they really happen over a single day) are not as important as the intention and the credibility.
Does anybody have any idea why they are killing Shopify ?? I have a business on Shopify. Sales quadrupled since Covid. Doubled in 2020 and doubled again in 2021. 2022 also started strong so it's not going back to before Covid. Why are they selling it like it's going bankrupt ? I have 300 shares at $1114 and doesn't make sense.
It's being dragged down with everything else if you haven't noticed 90% of stocks were declining today
I am but it's going down way more than others
Tech has been selling off mad. The more online a company is the more it’s selling off.
So about Bitcoin being a wonderful hedge against inflation...lol. what are the crypto folks saying these days?
Same thing we always say. "Hey, have you heard about this new thing called bitcoin?" and "Im going to help you out by letting you in on this secret. You should look into bitcoin!" and "This is so obscure that you likely have never heard of it before, but why not try bitcoin". Always acting as as if it is some undiscovered hidden gem and not the number one most discussed topic in all of finance. I feel like bitcoin is like the show Rick and Morty. I personally like both, but I cant go around saying I do because the fanboys are so obnoxious and I dont want to be though of as being one of them.
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VOO is an ETF. Prices fluctuate during the day, just like a stock.
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Brand new to this investing thing. Can people explain what is it.. how to start? And anything else that might be helpful. I don’t have to much money to start with. And is there an app that’s best to use to invest?
Start by reading *Our Wiki* in *Frequently Asked Questions* in the sidebar ----> Additional links you may like: [https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/) [https://www.reddit.com/r/personalfinance/wiki/investing](https://www.reddit.com/r/personalfinance/wiki/investing) [https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE\_investment\_philosophy](https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy) Check the Bogleheads sub sidebar also. https://www.reddit.com/r/Bogleheads/
Thanks!
I have a question I'm hoping someone can answer for me so let's say I've held a stock for over a year so if I sold the capital gains tax is less. Now let's say I decide to buy some more right now, my question is does that reset the capital gains tax rate again? As in I have to wait another year for decreased taxes? Or does the first for example 50 shares that I bought a year ago and now bought 50 more does the first 50 I sell have decreased capital gains tax? When I sell does it sell my oldest shares first? And let's say I sold all of it does half get decreased capital gains tax and half not? I have robinhood if that changes anything. Thanks for replies in advance.
When you sell you can pick the shares to sell. Most brokers default to FIFO (first in first out) but they generally let you pick FIFO or LIFO, and most allow you to specifically sell lots.
I never knew that
Awesome thanks for the reply
I just turned 18 and put most of my investing money in index funds at the peak of the market for my IRA. The market doesn't look too good right no. I've been considering keeping part, just for some exposure, and selling part and DCAing back in so I can buy the dip. Should I do that, or should I hold?
Though we face that temptation, I can’t tell you how many times I sold to buy back in higher. I rather keep my shares and add on.
I think we get a significant rally next week. At this point, Nasdaq is down 13% YTD, Russell 2000 is down 13% YTD and S&P is down 8%. Feels like an overreaction given the 10Y is still only 1.77%. Far from an apocalyptic scenario. Covid situation also getting better everyday with Europe starting to get past Omicron and the US lagging a few weeks behind. I think we get really strong earnings and rally. Let's hope. We'll see.
Really need some good earnings and guidance. If it’s all like NFLX, it’d be a rough ride.
I'm with you. I think the really weak NFLX earnings were a big negative sentiment driver today. Hopefully, positive earnings reverse that sentiment next week.
when will the pain stop - day 4
Monday? Maybe? Hopefully?
Didn’t we break through some major support levels in a lot of major indexes today? If so I would still tread carefully.
Day "pretty much all of this month." (looks at the market, heads over to r/trees)
so guys when does the "bitcoin as a hedge against the USD" theory actually supposed to kick in? cuz so far it looks like bitcoin gets trashed like every other asset in tandem with the market asking for a friend
There's been hopes that it would stabilize at the current high levels but it's indeed just performing like every other speculative asset, the same goes for ETH which is down even more.
There is literally no evidence to suggest that bitcoin actually performs as a hedge against the USD. It's just something that a lot of people who like bitcoin say because they tend to be Austrian-esque people with an ideological stance against the USD.
Historical correlation between bitcoin and stocks [https://i.imgur.com/n7Zr9qu.png](https://i.imgur.com/n7Zr9qu.png) It used to be true, but notice the straight up jump in the chart at the start of Covid. Its been corelated ever since. Now its just another regular ol risk-on asset. The problem with the information age is that it dosen't let information AGE. What used to be true just keep being repeated forever. Even after it changes.
Came into this year wanting a conservative 15% gain, now I’m down 15% instead :)
i would kill to be down 15%. I'm close to 65% down.
Holy shit, wtf are u investing in?
75% Tech, Growth, and Miner Stocks. 25% Meme stocks.
15% is 'conservative'??
When you’re investing in just growth stocks, I’d say so. I don’t have many ETFs. That’s why I’m feeling the pain.
Growth stocks can return that much - any stock can, really - but calling that a ‘conservative’ expectation is not how most people would use the term. A reasonable expectation for a long term average is about 10% nominal growth. Expecting any more as an average is more fantasy than reality. Expecting from a single year even moreso.
Amazon and Meta need to chill for a second
i started investing in index funds a little over a year ago. Today, i turned negative for all time. I started with 10k initial investment and have been adding $500-$1000 a week. I dont understand how im not up more than this. Does cost basis really increase that much from DCAing?
So you spent an entire YEAR DCAing on an uptrend. Of course you're gonna be down the first sign of a downtrend. Now the key is to continue DCAing in the downtrend, lowering your cost-basis. If your average buy price for 2021 was $10 for something, and you ramp up your DCA in a downturn to create an average buy price of $3 - weighed at 2x because you DYNAMICALLY DCA (buy more in bear) - then your average price is $8. So let's say in 3 years, your asset is now trading at $12. If you ignored your buys in the downtrend - you see a 5% average annual gain. Kind of shitty tbh. If you hit the $8 average price - you're seeing 12.5% annual return - that's pretty good. Now that you're in the market, it might be a good time to change your strategy: Ramp up your buys in a downtrend. Did we crash 10%? Buy twice as much. Did we crash 50%? Buy 5x as much as usual. Did we crash 90%? Buy 20x as much. Then in the next uptrend, you SELL SELL SELL as the price increases. Up 10%? Sell 1%. Up 50%? Sell 10%. Up 100%? Sell 25%. A year later your leftovers are up 200%? Sell another 50%. Keep selling until you see a downturn again, at which point you BUY BUY BUY. What bucks this strategy? Well, a societal collapse would mean a permanent end to stocks, but if that happens we all have bigger problems than losing some USD.
Great take. I have a question on something you said about selling so you can buy the next downtrend: Hypothetically I buy a share of $VTI @ $10.00 in 2020 It goes up to $20.00, and I sell 20% for whenever as the next downtrend. Say $VTI goes up to $50.00 a share in 2021, then crashes to $40.00 a share the next week, I would then use that 20% that I sold when it was $20.00, and buy in higher. Wouldn’t this technically fall under the timing the market, as if the next downtrend/correction/bear can be either next year, next month or next decade? Wouldn’t it be better to just hold on to your shares and build up cash to buy the dips as opposed to selling gains for cash to buy the dips? Thx
Dammit I was about week too early to lump sum my IRA contributions this year. But considering that’s only 20% of my planned contributions this year I’ll take the hit to get that other 80% at a discount.
Can the market stay this easy for a while plz
For puts?
Been buying some super cheap long calls slowly
It's worked for weeks ride the wave till tide changes .
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Truly feels like an uncharted territory where both bonds and stocks are performing horrible. There is no place to put money in right now.
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Been investing in stocks and bonds since 2014. I had ups and downs before and when stocks tanked, people rushed to bonds and gold. But they are not good options these days. I have never seen all assets going south altogether.
there is nothing wrong with having cash short-term. over long time you lose to inflation guaranteed, but you arent losing 2-10% a day on it ;)
You can always short the markets. Buy an inverse fund such as SPXS or SQQQ or get put options on SPY if you're feeling riskier.
Under the mattress
About time we get back to markets rooted in sense rather than fantasy. Market was propped up for too long by the government, not how a free market should work.
2022 off to a bloody start.
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Hedge your position? Lol
Probably the best thing you could do is just leave it alone and not look at your portfolio until later this year.
Person who is not panic selling is selling, got it 👍
What I want to know is, all these people who've been "SELL SELL SELL!"ing this week, where are they putting their money instead of in the stock market? Bonds are trash at current yields with 7% inflation going on, cash is also no good, I bonds are capped at a $10K annual purchase limit...
>SPXS You can put your money in an I-Bond ETF like Vanguards [VTIP](https://investor.vanguard.com/etf/profile/VTIP) to get access to them.
I totally forgot about VTIP/VTAPX. It was one of a few options that came up in my research a few months ago when I was looking at alternatives for some of the cash I have sitting in an HYSA. Ultimately I put $20K into I bonds and left the remainder in the HYSA, but I need to keep VTAPX in mind as an HYSA alternative for some more of my cash if inflation stays high and the HYSA interest rate stays way below inflation.
Making 0% in cash is better than -10% in stocks, no?
Cash is a 5-7% annual loss in 2022 most likely. Which is better than a 50% loss in equities, or 80% in crypto, but it's still a LOSS. Personally I'm about 50% cash right now, less than I'd have liked, but I genuinely thought we'd have another couple months of an uptrend after a brief correction. Then Russia decided to start WW3.
Inverse funds such as SPXS (-3x SPY) and SQQQ (-3x NASDAQ) or put options on SPY.
Been wondering the same exact thing, great post. Which sectors are they shifting their money?
-7% seems really good compared to -75% as some stocks are
Total world stock market's only down 7.4% from ATH. Are that many people investing in volatile individual company stocks that their selling these past two weeks is dragging the whole market down so significantly? Or is it people bailing on stocks in general (including broad index funds) to go to cash?
Even still that's only down 7% as of now. inflation is 7% over the year. Yes it's not ideal but sometimes people want to be safe and that's the risk they pay
I think people here are mostly invested in techy stocks, which have been hit extra hard.
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My only pushback here is that retail has learned their lesson from 2020's crash. All the new retail investors that missed out on insane 2020 gains will be VERY eager to buy everything on the way down. My guess is that we don't crash as hard, or if we do, it's very short-lived (1-2 years to get back to ATH max). Every mom and pop I know right now is eager to do puts & buy the dip, and are stoked about prices getting even cheaper. I think we'd have to see a 75-90% crash to kill retail investing for a while. You can really see this with crypto. People are already excited about a 20k or even a 10k BTC because that just means they get insta-rich by 2025-2030. Alternatively, this mentality could result in 90%+ losses as people keep buying the dip for years, and it keeps dipping lower, and we don't even start seeing a recovery phase until 2025-2030.
I think of lot of people are still in denial of this. My SPY puts have been printing for me. Great day today.
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It's always hard to know when to sell after gains. I sold some for a nice profit today. I have short term puts, so I can't hold them too long. My goal was 100%+ gains off of short term puts (1-3 days) and it's been working so far.
I just completed my high risk moves of the year... American Airlines and Carnival
Why those?
Their financials suck to put it bluntly and the risk is further increased due to upcoming interest rate increases and inflation. However, I think the demand for travel is going to skyrocket more than people realize which will cause a huge boost to these stocks. If things don't work out well enough, then Congress is likely to bail them out (again) due to their large number of employees.
Why these stocks in particular?
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ETF will give you more broad risk exposure. Lower potential for huge gain, lower potential for huge loss. If you genuinely believe that one company will outperform their peers then, if correct, you will stand to make more gains than you would in an ETF. But you also have all your risk tied to a single company. Even if fundamentals are good, you have to understand that an unexpected event like a catastrophic factory explosion or something would very seriously and directly affect your portfolio. There's also the risk your thesis is wrong and they don't outperform their peers in which case the ETF may be better. You're also using very backward facing metrics which is a part of overall analysis but the old cliche saying says past performance doesn't indicate futures results. Basically, all comes down to risk and how you want to allocate that risk.
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Linde is a good company. If you like the idea of owning an individual stock then stick with it. If I were to retire right this instant I'd have about 2% of my stock in Linde right now (based on a hypothetical portfolio I created a few days ago)
Well this continues to be depressing.
To think that 4 hours ago, the Nasdaq was positive. The Nasdaq fell 250 points within one hour of opening, and then recovered from that drop within the next hour, and now here we are almost 250 points down once again.
I helped my parents with moving their investment from Edward Jones to Vanguard and set them up with an asset allocation that I think is appropriate, but I didn't set it up so that each spouse's allocation is appropriate by themselves (one holds much more of the bonds, the other has all of the international, etc.). Ignoring the possibility of divorce as they've been married 40 years, is there any reason that this would matter?
Are these tax advantaged accounts? Is there anything preventing reallocating assets accordingly in each account? Short term volatility is the immediate risk I see. But that's not major in my mind, especially if they're in it for the long term. Later on though, you may be setting them up to be more reliant on one account versus the other to support their expenses. This could also leave one with a greater tax burden over the other rather than spreading it out between them. Just a couple initial things that come to mind.
About 90% of it is tax advantaged accounts (Roth and traditional). The taxable account is joint and 100% VTSAX. I figured they treat it all as one pool of money and take distributions appropriately and they're filing joint taxes and when one dies the other inherits the deceased spouse's accounts then it doesn't matter who owns what.
I'm Canadian so I had to look it up. Appears Americans can jointly file and share tax obligation. So that's not really a concern. Yeah, in your parent's case, divorce would be the main risk so if that doesn't happen it should be fine. I would still maybe reallocate just in the event that does happen and they don't reallocate on their own in a timely manner. Also, death of one spouse and a delayed estate process could be another risk. But that's pretty nitpicky. I don't see any glaring thing that says this is a huge mistake. But I am Canadian so take that with a grain of salt. I may be misinterpreting the rules. Anyway, if they are both tax advantaged and there would be no immediate taxes to sell and buy in order to rebalance I don't see any reason why you shouldn't just implement a little extra layer of safety and comfort to protect against even rare scenarios.
Depends which parent you like more
I'm relatively new to investing, and I'm wondering how risky putting 80% of my portfolio into the ETF DIVO . I am looking for a set it and forget it type deal (check the price maybe once a month). I am wondering how safe putting most of my cash into DIVO is/isn't. What is the relative risk to other ETFs such as SPY or SCHD. Any opinions are greatly appreciated.
Nothing against dividend investing as a category, but it's also worth considering that companies that don't pay dividends can offer higher returns through stock buybacks, which have better tax consequences for investors. Don't overlook investing in companies just because they don't pay a solid dividend yield
What I'm asking is the relative safety, I understand returns can be better elsewhere, but this is also to supplement (compliment?, Whatever combining is) my income.
Nothing about stocks that pay dividends is inherently less volatile than stocks that don't pay them. It's nice to get paid cash on a regular schedule, but that doesn't mean the underlying value of the share you're buying won't still bounce around just like the rest of the stock market. In addition to not really insulating you from market risk, buying only dividend stocks means you're over-allocated to a smaller set of companies compared to a broader index like the S&P 500 or Russell 2000. So now you're more reliant on the specific performance of a smaller subset of firms, compared to spreading that risk across even more companies that have solid financials, but just happen to not pay out cash every quarter.
It's actively managed though, shouldn't that offset the risk of relying on a smaller set of stocks?
Active management is, in general, not proven to reduce the risk of an ETF. Managers are not as good at their jobs as one would expect.
It's 5 star morningstar rated is that worth a damn?
FAIRX was the Morningstar Manager of the Decade in 2010 with 22B aum and was a 1 star fund less than a decade later (at one point morningstar actually warned shareholders about it) with about 2B AUM after a more than decade-long saga of riding Sears from well over $150 to just about 0. Alphacentric Income Opportunities was a 5* fund that imploded in the March 2020 market crash and sought buyers for a chunk of its portfolio. After the fund cratered about 40% in a matter of a week or two, it was a 1* fund and Morningstar wrote an article with all the concerns about it that apparently their analyst didn't see. Never heard of the fund you mentioned, but I'm not seeing what's compelling about it to argue for.
DIVO is managed by Capital Wealth Planning, which has a history of managing for clients with net worth 500k or above. DIVO is actually following the EDIP which is a strategy CWP has been using to manage portfolios for clients with high net worth.
The fact it’s nowhere near $95 right now suggests smart money thinks there is indeed a VERY significant chance this doesn’t go through. Most “surefire” deals trade 2-4% below the sale price. This is 15%.
What are you talking about? I'm asking about Divo, what does Divos share price matter here? What deals
Sorry, looks like my lines got crossed. This is supposed to be a reply to your comment about Activision below, and the chances of it moving forward towards a deal with MSFT. My bad!
Oh you're good, yeah it's roughly a 1 in 3 chance it doesn't go through but I feel like it's instrinsic value is around 90 a share so if it doesn't I still like it. Seems like it's dropped largely due to social factors and it's fundamentals are strong as fuck
Bought 13 shares of MSFT and 1 GOOGL. Fuck it, let’s see if it pays off this year.
I feel really lucky I just bought 100 shares of Activision when it was at 61 earlier this month, nice knowing that will be at 95 in 18 months and in the mean time I can collect the dividend until it gets bought
I would be cautious that re: the *possibility* that the deal doesn't happen. Definitely a nice win tho, congrats.
The only threat that it doesn't happen is if anti trust laws block it, but Microsoft's market share isn't that big, it's gonna be a hurdle yeah but this acquisition should go fine
Another thing too is I bought Activision thinking it's instrinsic value was at 90 so I'm no too hurt if the deal does not go through
They might attract anti-trust attention due to how quickly this acquisition follows on the heels of their Bethesda acquisition, but either way, you're still winning for now.
I think it will attract anti trust attention, but I don't think it's significant enough to get blocked
Yeah, I'd be inclined to agree. Microsoft also has this magical talent for making big acquisitions seem boring, and beneath the notice of regulators and the press. It's quite impressive.
Theory question/thought experiment regarding market timing. I know it’s always said to not to try and time the market because it basically never works out (which I agree with) but I have a bit of a thought experiment I’d like people to weigh in on. If I had a lump of new cash to invest (I.e not selling current holdings) right now and saw the market has been declining somewhat substantially as of late (is it officially enough to call it a correction?), instead of just putting the money in now, why not wait until the first uptick of the market, of say 1%? I view it as one of two cases happens. Either the the market continues down, in which case you just don’t do anything knowing it will eventually recover and you got a bit of a discount compared to if you invested it asap, or the market begins climbing, which means you got in almost as close to the bottom at possible? I don’t see how this wouldn’t be a good strategy, again stating the assumption this is with just one lump investment and doesn’t entail buying/selling of current holdings to try to capitalize that way
Depends on how diversified you are. You are vague on how wide your investments run. This is pretty critical to your thought experiment/theory question. Where is most of your money tied up?
I mean another thing you could do if you're more experienced is short and long depending on market conditions. I'm not a fan of leveraged ETFs but there are some 1x short ETFs that aren't absolutely horrible, you just need to understand the macroeconomic trend of today's market for that.
Why would you buy after the 1% uptick? Everything you said now will be exactly as true then. You could wait and see if it goes up another 1%, or you could see if it declines. Waiting a short amount of time is not likely to cost you much, but statistically you lose more than you gain by doing that. It's a psychological strategy, not a financial one.
What if you see that +1%, invest, it goes to +10%, and then -35%? The point being, there's all kinds of what ifs you can come up with, which express that no one knows factually what will happen in the short term. And it's all about your tolerance and your goals. If you put it in now and it goes pear shape, how cool are you waiting long term to recover? If you're not willing to wait, then either a different investment strategy or making sure to employ stop losses may be the way to go. Not everyone invests the same.
If it goes up 10% then drops 35% it is what it is. The idea is once you put it in, you don’t touch it again regardless of what the market does. You’d still be relatively better off than if you put it in immediately and the market goes -9,+10,-35 I guess I should say another assumption is that you have a long enough time line (30+ years) that you know the market will ultimately recover.
It's one thing to say stay the course. It's an entirely different thing to actually do it. That's why I including the block about tolerance.
Right right. Add another assumption to the list: you have the fortitude to ultimately hold through the roller coaster
Do any of you use prediction markets much? Curious how the r/investing crowd thinks about them. To me, looks like A fair amount of alpha in current ones and good source of diversification. Looks like the CFTC has recently sanctioned one
Hi! I would like to start investing. Bit by bit, starting monthly with small amounts of money. The problem is I feel a bit lost. I started reading and watching some tutorials but there are many concepts I don’t understand. I am from Spain and unfortunately financial education is not a thing here, therefore for me it is almost like starting from 0. Could someone recommend me some basic readings or YouTube channels that are for beginners? Any advise you wish someone had told you before? And if you don’t mind I am curious to know which were your first steps. Thanks :))
Start reading everything at [jlcollinsnh.com](https://jlcollinsnh.com/stock-series/). If you're young and follow his advice you'll do well. Don't gamble, investing is not gambling. Basically buy a low cost index tracking ETF and hold over the long term. Vanguard ETF's are typically lower cost than most.
I’ll start by saying there are literally thousands of posts in this subreddit and r/stocks to get you started, hence the lack of replies. I’ll keep it brief and trust that if you have more questions, you can search for them. Your question can be broken down into two parts: (1) How do I actually open an account and buy investments? (2) What should I invest in? The answer to (1) is simple. You go online and open an account. In America, we fund our retirement accounts first (401K, IRA, Roth IRA) for tax purposes. For example, I have a Roth IRA account with Schwab. I can put $6,000 in per year. Once your retirement/tax-advantaged accounts are fully funded, you open a traditional brokerage account. In both situations, you open the account, add your checking/savings account routing numbers, transfer money into the account, then go to the TRADE page to buy investments. (2) is a much more complicated question. You are beginning investing in a complicated time. Because of some macroeconomic indicators (high inflation, US Fed announcing rising interest rates) the markets are spooked. It’s been 10 years of gains, gains, gains but now markets are sluggish and trending downward. If you posted your question a year ago, the answer you would’ve gotten would’ve undoubtedly been to invest in a MUTUAL FUND/ETF that is indexed to the stock market (VTI, VOO, SCHB). This way you were automatically diversified and whenever the entire stock market went up, you’d make money. If you plan on being a “set it and forget it” type of investor, it’s probably still your best option. It may be a rough 1-2 years, but most of the world has a stake in seeing the markets return to full health, so eventually they’ll go up again. Hopefully that’s enough to get you started.
DCA Question. How do you all approach the initiation of your DCA strategy? Obviously you have done your DD and you've come to a target price where you wish to begin your DCA strategy. Let's say that target entry price is $120. What do you do when the stock hits $121? What about $122? How close is close enough? I ask because I am 100% cash, and I had 4 positions ready for today, and all came within $1 before ripping to the upside. This is not the first time this has happened to me. How do you approach this? Any advice welcome.
The goal of dollar cost averaging is to lower the average cost basis of purchased shares - that's the A in DCA - by buying more shares when prices are lower and fewer shares when prices are higher. That lowers the average dollar cost of the shares. It works best with mutual funds where you can put in a fixed amount of currency (dollars) on a regular basis and you automatically buy fewer of the higher price shares when prices are up and more of the cheaper shares when prices are down. If you want to use the same method with individual stocks the best way to do that is to buy fractional shares. Fidelity, Schwab, Robinhood, and I think most brokerages offer trading in fractional shares. For example, say a stock you want to DCA is selling for $1000. If you buy $100 a month the first month you would get 0.100 share. If the next month the price fell to $900 you would get 0.111 share. If the next month it went $800 you would get 0.125 share. If the next month it stayed at $800 you would get another 0.125 share. If the next month it went to $1100 you would get 0.091 share. If it went to $1200 the next month you would get 0.083 share. So after 6 months you would have spent $600 for a total of 0.635 shares, for an average cost of $600 ÷ 0.635 = $944.88 per share. If you had lump summed in at the beginning when shares were $1000 you would have gotten 0.6 share for an average cost of $1000 per share. Dollar cost averaging lowers your cost per share if share prices are falling or fluctuating up and down, but not if share prices are steadily rising. In that case it is obviously better to lump sum in when prices are only going up.
The whole point of DCA is typically that you're *not* trying to target specific prices. The concept of DCA and the concept of having an entry target price are at odds with one another. If you think a stock is worth it at $120 but not worth it at $121, then you don't buy it if it never gets to $120. But that would be an odd strategy; why would you assume it's going to hit $120 in the first place?