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The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
- Thread starter FlagDUDE08
- Start date
Almington
Blood Boiling with Rage and Hate
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
It depends on how you value short term inflation risk vs equity risk. If you honestly believe that their is a bubble that will burst keeping/moving assets to cash in the short term isn't a terrible idea. You do run the risk of inflation taking off and this NOT being a bubble and being left behind.
That said, if inflation takes off I believe that the FED will HAVE to raise rates to tame inflation. Keeping inflation down is (or at least should be) a more fundamental priority of the Fed than keeping unemployment low. That could itself cause a steep decine in the market as some entities will HAVE to sell as they deleverage.
It depends on how you value short term inflation risk vs equity risk. If you honestly believe that their is a bubble that will burst keeping/moving assets to cash in the short term isn't a terrible idea. You do run the risk of inflation taking off and this NOT being a bubble and being left behind.
That said, if inflation takes off I believe that the FED will HAVE to raise rates to tame inflation. Keeping inflation down is (or at least should be) a more fundamental priority of the Fed than keeping unemployment low. That could itself cause a steep decine in the market as some entities will HAVE to sell as they deleverage.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
Very much the way I have been thinking and approaching this market. Currently I suspect the way the Fed has handled inflation is to just ignore that it exists (for the most part). Just because it is not included in the statistics they use does not mean it isn't affecting everyone. If they included my costs for food, energy, cable bill, telephone, health insurance, real estate taxes, home owner's insurance-a truer picture might emerge. My age and predicted longevity obviously affects how I deal with all of this. If i was 20-30 years younger the risk would not be as much of a problem (but i would certainly not have the assets to invest that i do now). 11 years ago when iIwent into a semi retired state-I had tried to plan carefully. But there was no way I could expect 0% interest rates and for how long they would be maintained. I had based most of my projections using a very conservative return of 3% which was well below bank interest at the time and historically not high. Certainly obtaining a steady stream of income from yield has been a challenge.
Very much the way I have been thinking and approaching this market. Currently I suspect the way the Fed has handled inflation is to just ignore that it exists (for the most part). Just because it is not included in the statistics they use does not mean it isn't affecting everyone. If they included my costs for food, energy, cable bill, telephone, health insurance, real estate taxes, home owner's insurance-a truer picture might emerge. My age and predicted longevity obviously affects how I deal with all of this. If i was 20-30 years younger the risk would not be as much of a problem (but i would certainly not have the assets to invest that i do now). 11 years ago when iIwent into a semi retired state-I had tried to plan carefully. But there was no way I could expect 0% interest rates and for how long they would be maintained. I had based most of my projections using a very conservative return of 3% which was well below bank interest at the time and historically not high. Certainly obtaining a steady stream of income from yield has been a challenge.
Almington
Blood Boiling with Rage and Hate
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
Regardless of any impact from changes in the money supply, this summers drought will increase food and fuel prices going forward (at least in the short term, my personal belief is that this is part of a longer term trend as the result of climate change that we as a nation have to this point have taken no steps to ensure an adequate water supply for this nation going forward adn that changes in precipitation patterns and snow melt timelines is going to result in future droughts that will threaten our food and drinking water supplies).
I think that a huge part of the issue is HOW inflation is calculated by the government. My experience over the last few year is similar to yours: that most consumer items have been relatively flat, but food, energy, utilities, and services have continued, steady increases.
I know that my mother's financial planner is shifting more of her assets to stable dividend paying stocks as she approaches retirement (~5 years away) because of the low returns on just about everything else in this low-interest rate environment.
Regardless of any impact from changes in the money supply, this summers drought will increase food and fuel prices going forward (at least in the short term, my personal belief is that this is part of a longer term trend as the result of climate change that we as a nation have to this point have taken no steps to ensure an adequate water supply for this nation going forward adn that changes in precipitation patterns and snow melt timelines is going to result in future droughts that will threaten our food and drinking water supplies).
I think that a huge part of the issue is HOW inflation is calculated by the government. My experience over the last few year is similar to yours: that most consumer items have been relatively flat, but food, energy, utilities, and services have continued, steady increases.
I know that my mother's financial planner is shifting more of her assets to stable dividend paying stocks as she approaches retirement (~5 years away) because of the low returns on just about everything else in this low-interest rate environment.
St. Clown
Liberal Rebel Scum, apparently
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
That's a huge part of it. For those who don't know, the government has traditionally removed food and energy prices from CPI because of their volatile nature. You can find them when looking at sub-indices the BLS tracks, but the official CPI, against which social security rate changes are based, excludes those two very important components. I've always thought that they could reduce the impact of volatility by using a three- or four-month moving average with a week or two of lag for reporting from one year over the next in those two components and that way include them in the general CPI, but much smarter minds than mine must have some reason in place.
FlagDUDE08
Banned
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
So long as the country is wallowing in debt and needs to pay interest on it, the Fed won't touch interest rates, even if it leads to hyper-inflation. They should look towards what you describe because although the demand for capital is there, no one wants to supply it at such low rates, and have to wait for auction prices to increase.
So long as the country is wallowing in debt and needs to pay interest on it, the Fed won't touch interest rates, even if it leads to hyper-inflation. They should look towards what you describe because although the demand for capital is there, no one wants to supply it at such low rates, and have to wait for auction prices to increase.
DavidSec17
Well-known member
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
So what I am gathering from all of this(and my conscience tells me this too) is not to re enter the market at this point?
So what I am gathering from all of this(and my conscience tells me this too) is not to re enter the market at this point?
FlagDUDE08
Banned
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
Not entirely. The tech slump (don't be fooled by Apple, since there's more to tech than them and Google) is in swing, so you might be able to get some good names on the cheap, like Microsoft, Oracle, maybe a hardware play like MKS Industries (ownership) or Emerson. One of my friends thinks Facebook's ready to take off (though I don't intend to take another position any time soon).
Not to mention, although set up a limit ladder to buy on the dip, commodities are a good place with QE3 in full swing. It may also be a time to look for the other non-cyclicals so you're hedged against a downturn, plays such as Altria.
Not entirely. The tech slump (don't be fooled by Apple, since there's more to tech than them and Google) is in swing, so you might be able to get some good names on the cheap, like Microsoft, Oracle, maybe a hardware play like MKS Industries (ownership) or Emerson. One of my friends thinks Facebook's ready to take off (though I don't intend to take another position any time soon).
Not to mention, although set up a limit ladder to buy on the dip, commodities are a good place with QE3 in full swing. It may also be a time to look for the other non-cyclicals so you're hedged against a downturn, plays such as Altria.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
My guess is that if you can figure out if and when Europe blows up...then you are down the road to knowing your answer. Don't look at me.
My guess is that if you can figure out if and when Europe blows up...then you are down the road to knowing your answer. Don't look at me.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
Would seem like very sound advice. I started switching over my portfolio also with about 5 years left before i went semi retired. When I was earning at my capacity I was all growth and cared little about yield. Now I am in a totally different position. Preferred stocks, bonds, bond funds, some gold, some oil pipelines, and some highly rated substantial divdend stocks. I am very satisfied with how things are doing but always remain vigilant in watching since even the most reliable dividend payers can run into problems-witness what happened with my GM bonds a couple years ago. One would have thought that a GM bond holder would have been treated better but getting 9¢ on the dollar just did not feel right given the bail out. But thankfully I have always had a substantial holding in MO.Over the years it has split of Kraft (which i sold as some profit taking) and PM which has just been an incredible investment while also yielding quite nicely.
Would seem like very sound advice. I started switching over my portfolio also with about 5 years left before i went semi retired. When I was earning at my capacity I was all growth and cared little about yield. Now I am in a totally different position. Preferred stocks, bonds, bond funds, some gold, some oil pipelines, and some highly rated substantial divdend stocks. I am very satisfied with how things are doing but always remain vigilant in watching since even the most reliable dividend payers can run into problems-witness what happened with my GM bonds a couple years ago. One would have thought that a GM bond holder would have been treated better but getting 9¢ on the dollar just did not feel right given the bail out. But thankfully I have always had a substantial holding in MO.Over the years it has split of Kraft (which i sold as some profit taking) and PM which has just been an incredible investment while also yielding quite nicely.
FlagDUDE08
Banned
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
Altria has done well. I mad e afew bucks off that, but then wanted to start playing some other stuff.
Altria has done well. I mad e afew bucks off that, but then wanted to start playing some other stuff.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
FDude-I am never one to give any sort of market advice-I make most of my own mistakes. But if you are looking for some yield and do not mind some risk-take a peek at NYB (I am usually not a fan of the banks) and QRE(my current favorite of the oil pipeline trusts) and GGN (an interesting gold fund). All have done very well for me but as you well know past performance means squat. Personally i would love for the banks to offer me high enough yield on CDs so i could take some of my market investments off the table-but i honestly do not see that happening for a long time (if ever).
FDude-I am never one to give any sort of market advice-I make most of my own mistakes. But if you are looking for some yield and do not mind some risk-take a peek at NYB (I am usually not a fan of the banks) and QRE(my current favorite of the oil pipeline trusts) and GGN (an interesting gold fund). All have done very well for me but as you well know past performance means squat. Personally i would love for the banks to offer me high enough yield on CDs so i could take some of my market investments off the table-but i honestly do not see that happening for a long time (if ever).
FlagDUDE08
Banned
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
I do quite a bit of oil trusts already... CRT and ROYT are my current holdings (had to dump a couple because of their almost entire exposure to natgas). If I did anything with banks and yield, I'd consider one of the Bank of America preferred shares. I'm still skeptical about banks, though.
I do quite a bit of oil trusts already... CRT and ROYT are my current holdings (had to dump a couple because of their almost entire exposure to natgas). If I did anything with banks and yield, I'd consider one of the Bank of America preferred shares. I'm still skeptical about banks, though.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
You and me both-some of my worst results have been the direct results of bank investments. That is why i have stuck with German bank preferreds. DTT and DTK although they are now a bit pricey. In my earlier earning years-i kept only a small percentage in preferred stocks. Once i reached retirement age-all that changed. Even there though I try to keep diversified by industry. it is difficult since the best yielding preferreds are usually bank or investment house oriented (Morgan Stanley/Merrill etc). I do the same with common stocks that yield well-some telephone, some drug, some bank, some tobacco, some funds. For me the key, as it should be, is to never sit back and relax-I watch daily and make adjustments accordingly. As a physician, I knew nothing of any of this-all I knew was medicine. This has been like a second career and i am still learning.
You and me both-some of my worst results have been the direct results of bank investments. That is why i have stuck with German bank preferreds. DTT and DTK although they are now a bit pricey. In my earlier earning years-i kept only a small percentage in preferred stocks. Once i reached retirement age-all that changed. Even there though I try to keep diversified by industry. it is difficult since the best yielding preferreds are usually bank or investment house oriented (Morgan Stanley/Merrill etc). I do the same with common stocks that yield well-some telephone, some drug, some bank, some tobacco, some funds. For me the key, as it should be, is to never sit back and relax-I watch daily and make adjustments accordingly. As a physician, I knew nothing of any of this-all I knew was medicine. This has been like a second career and i am still learning.
FlagDUDE08
Banned
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
That's the beauty of the stock market... it takes a minute to learn and a lifetime to master. I'm a bit over-exposed to the royalties, though, and do need to consider looking at some other stuff. Sadly, since I'm still basically just starting, I can't exactly go after the big guns, like Apple. I've been stick to the low-to-mid caps, and if I can grab a large company, like VZ, I will. Patience is a good thing to have, but with little money, you pretty much have to make moves to get anywhere. This will change once we fall off the fiscal cliff (and I do believe we will, seeing as how regardless of who gets elected, Obama will be the President when it happens), but if you fall into the 15% bracket, you actually are charged $0 in taxes for long term cap gains and qualified dividends.
That's the beauty of the stock market... it takes a minute to learn and a lifetime to master. I'm a bit over-exposed to the royalties, though, and do need to consider looking at some other stuff. Sadly, since I'm still basically just starting, I can't exactly go after the big guns, like Apple. I've been stick to the low-to-mid caps, and if I can grab a large company, like VZ, I will. Patience is a good thing to have, but with little money, you pretty much have to make moves to get anywhere. This will change once we fall off the fiscal cliff (and I do believe we will, seeing as how regardless of who gets elected, Obama will be the President when it happens), but if you fall into the 15% bracket, you actually are charged $0 in taxes for long term cap gains and qualified dividends.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
I started slowly-very slowly. Actually kept almost everything in CDs for a long time before venturing into the market foray. But CDs then were of such high yield that I still was able to see growth. Different world now-the only game in town is the market. Staying in CDs and bank instruments is ludicrous(although very safe). The world of real estate has totally changed. In the old days you bought-you held-then you sold-and you always made money. That game for real estate is over for now and perhaps forever. For me the key was discipline. In my working years I was able to forego the instant gratification-I put as much into retirement savings as possible, every year without fail. Compounded interest (or dividends if you will) is one of the most powerful forces around. It took time-but staying committed paid off handsomely. Retiring early and comfortably was far more important to me and my wife. With the current state of affairs and the economy-we are thankful that we had planned carefully. You certainly seem to be on the right path.
I started slowly-very slowly. Actually kept almost everything in CDs for a long time before venturing into the market foray. But CDs then were of such high yield that I still was able to see growth. Different world now-the only game in town is the market. Staying in CDs and bank instruments is ludicrous(although very safe). The world of real estate has totally changed. In the old days you bought-you held-then you sold-and you always made money. That game for real estate is over for now and perhaps forever. For me the key was discipline. In my working years I was able to forego the instant gratification-I put as much into retirement savings as possible, every year without fail. Compounded interest (or dividends if you will) is one of the most powerful forces around. It took time-but staying committed paid off handsomely. Retiring early and comfortably was far more important to me and my wife. With the current state of affairs and the economy-we are thankful that we had planned carefully. You certainly seem to be on the right path.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
As with all things in life-good things come to an end. After 17 weeks of consecutive positives (something that has never happened for me before) unless there is an incredible upward surge, this week will be a negative for me. Cannot complain however since historically September and october have always been my worst months.
As with all things in life-good things come to an end. After 17 weeks of consecutive positives (something that has never happened for me before) unless there is an incredible upward surge, this week will be a negative for me. Cannot complain however since historically September and october have always been my worst months.
FlagDUDE08
Banned
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
That makes me wonder if you have a lot of exposure to technology, since this is their typical slump.
That makes me wonder if you have a lot of exposure to technology, since this is their typical slump.
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
After having been burned before-I have had zero tech for years. I am a conservative in many respects (not all) but I detest losing hard earned money. I am a dividend investor and slow growth investor. I try to take as few chances as posible. Even that philosophy has allowed me to get burned every so often and I have to always be wary of how I diversify. As the afternoon has worn on-I have moved up some-but would need quite a rally tomorrow to end up positive for the week.
edit-if you can find time-take a look at the long term trend of the NYSE over the past 50+ years for the period of April 15th through Halloween of each year. I have felt for a long time that I would love to sell after tax day and buy back in every year on Nov 1. I haven't done it (mostly because of the dividends i would lose) but it always st4ruck me as a strategy to try.
After having been burned before-I have had zero tech for years. I am a conservative in many respects (not all) but I detest losing hard earned money. I am a dividend investor and slow growth investor. I try to take as few chances as posible. Even that philosophy has allowed me to get burned every so often and I have to always be wary of how I diversify. As the afternoon has worn on-I have moved up some-but would need quite a rally tomorrow to end up positive for the week.
edit-if you can find time-take a look at the long term trend of the NYSE over the past 50+ years for the period of April 15th through Halloween of each year. I have felt for a long time that I would love to sell after tax day and buy back in every year on Nov 1. I haven't done it (mostly because of the dividends i would lose) but it always st4ruck me as a strategy to try.
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Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...
Depending upon your total portfolio, it can be fun as well as instructive to set aside a very small part for pure speculation.
There's an extremely interesting result in the following.
Let's say, to keep it simple, that you have $100,000 to invest for 20 years without withdrawing any. Ignore taxes for now.
You are given two choices:
a) earn 8% annually on the entire amount
b) allocate to five $20,000 buckets
1) lose 100%
2) earn 0% annually
3) earn 4% annually
4) earn 8% annually
5) earn 16% annually
Without first doing the math, intuitively, which one do you pick?
I'll put the results in white text: the first portfolio, all 8%, grows to $466,100; the second portfolio grows to $546,260!
Depending upon your total portfolio, it can be fun as well as instructive to set aside a very small part for pure speculation.
There's an extremely interesting result in the following.
Let's say, to keep it simple, that you have $100,000 to invest for 20 years without withdrawing any. Ignore taxes for now.
You are given two choices:
a) earn 8% annually on the entire amount
b) allocate to five $20,000 buckets
1) lose 100%
2) earn 0% annually
3) earn 4% annually
4) earn 8% annually
5) earn 16% annually
Without first doing the math, intuitively, which one do you pick?
I'll put the results in white text: the first portfolio, all 8%, grows to $466,100; the second portfolio grows to $546,260!