Stock Market is the bottom in?

[Telemark]

. Right now, I'm bad at investing because I missed the whole updraft. Too much risk and unknow for me. I've been in and out of oil. While I cleared a couple tens-of-thousands in short order, I got out while the rocket was still, well, rocketing! Only a few regrets.

I think you have the wrong idea about investing. You can't expect to get in at the bottom and get out at the top. If you made a trade on momentum and made money on the investment it's a good investment. No one can time the market perfectly, and a lot of people get burned being greedy and trying to wait for the absolute tip of the peak before they sell. No one can do that with any reliability.

 

[breddick]

My market investment "strategy" is pretty mixed. Roth IRA is a vanguard brokerage account. Have one for myself and my wife. I take care of both. I also have a Simple IRA that is through my business (I'm the owner but am able to participate). Both of these vehicles are maxed out annually. The Simple IRA has limitations on what you can buy so they're set up on "autopilot" to buy Target Retirement date mutual funds. The risk/reward profile will change over time as nearer to that target date.

The Roth IRA's are brokerage accounts so I can invest however I want. I subscribe to Motley Fool and typically sprinkle that Roth money around on a handful of motley fool recommended stocks. I'll simply say that my motley fool stock buys over the past couple years have absolutely blown the socks off of any ETF or mutual funds. Don't get me wrong, there has been a loser or two. That's why I try to keep a minimum of 20 different stocks. The hardest part of these stock buys is the temptation to buy/sell rather than buy and ignore. For instance I bought about $2,000 SFIX (stitch fix) March 2020. In January 2021 it was worth about $10,000. I was a little nervous about the effects of the election and was expecting a downturn in the market so decided to sell and be in cash for a bit. Within 3 days it was up another 50%. I should have never looked. :(

The other investment strategies involve minimizing debt. No credit cards. Own lots of land. Live within means. etc.

 

[yoderjac]

My market investment "strategy" is pretty mixed. Roth IRA is a vanguard brokerage account. Have one for myself and my wife. I take care of both. I also have a Simple IRA that is through my business (I'm the owner but am able to participate). Both of these vehicles are maxed out annually. The Simple IRA has limitations on what you can buy so they're set up on "autopilot" to buy Target Retirement date mutual funds. The risk/reward profile will change over time as nearer to that target date.

The Roth IRA's are brokerage accounts so I can invest however I want. I subscribe to Motley Fool and typically sprinkle that Roth money around on a handful of motley fool recommended stocks. I'll simply say that my motley fool stock buys over the past couple years have absolutely blown the socks off of any ETF or mutual funds. Don't get me wrong, there has been a loser or two. That's why I try to keep a minimum of 20 different stocks. The hardest part of these stock buys is the temptation to buy/sell rather than buy and ignore. For instance I bought about $2,000 SFIX (stitch fix) March 2020. In January 2021 it was worth about $10,000. I was a little nervous about the effects of the election and was expecting a downturn in the market so decided to sell and be in cash for a bit. Within 3 days it was up another 50%. I should have never looked. :(

The other investment strategies involve minimizing debt. No credit cards. Own lots of land. Live within means. etc.

If you are a small business, consider a "safe harbor" 401K. It has significantly higher limits in terms of what you can squirrel away.

 

[breddick]

If you are a small business, consider a "safe harbor" 401K. It has significantly higher limits in terms of what you can squirrel away.

I looked at the options when I started the Simple IRA. Since I'm the primary bookkeeper I desired the easiest option available. The Simple IRA fit those needs. The higher limits weren't really appealing to me. The extra $ I would have dumped into the higher limit simply goes towards other interests such as more hunting (investment) acres :)

 

[yoderjac]

I looked at the options when I started the Simple IRA. Since I'm the primary bookkeeper I desired the easiest option available. The Simple IRA fit those needs. The higher limits weren't really appealing to me. The extra $ I would have dumped into the higher limit simply goes towards other interests such as more hunting (investment) acres :)

Yep, safe harbor's aren't a fit for every situation, but they can really be a useful tool for many who are retirement oriented.

 

[chummer]

If DMTK hits 800 I'll be paying for your air fare to Wisconsin , and licenses, and you can hunt my land for a week . It's the least I could do for the tip, plus you'll be retired and looking for new experiences.

So what part of the rut should I be looking forward to? Dermtech just landed Texas, up big tomorrow. Best part is we still have 47 states left and the rest of the world. Tomorrow should be fun.

 

[Doublewide]

So what part of the rut should I be looking forward to? Dermtech just landed Texas, up big tomorrow. Best part is we still have 47 states left and the rest of the world. Tomorrow should be fun.

Heck if it hits 800 you might as well come for the season. :)

 

[Mortenson]

Need advice. Well, maybe more of a poll. Finishing up taxes here. I could put 12k in traditional IRA, and save a few dollars on taxes, or pay the tax and set that money into a dry powder account. That account would be (most likely) strictly for down payments on income producing property when the time is right. Could always do the IRA and withdraw w/ penalty after a say Dermtech goes up tenfold. I like a war chest of dry powder, but at what cost? I could also use that after-tax money and pay off both my minivan and pickup, both at ~3.5% right now. Lotta financial wizards in the habitat forum.

 

[yoderjac]

Need advice. Well, maybe more of a poll. Finishing up taxes here. I could put 12k in traditional IRA, and save a few dollars on taxes, or pay the tax and set that money into a dry powder account. That account would be (most likely) strictly for down payments on income producing property when the time is right. Could always do the IRA and withdraw w/ penalty after a say Dermtech goes up tenfold. I like a war chest of dry powder, but at what cost? I could also use that after-tax money and pay off both my minivan and pickup, both at ~3.5% right now. Lotta financial wizards in the habitat forum.

My 2 cents...Pay off your debt. The interest rate is not high but slightly over the inflation adjusted long-term market average. Your time horizon seems to be undetermined.

 

[OakSeeds]

Check this out fellas ... if the S&P 500 is being over-weighted with FAANG stocks to provide a return, an investor might conclude at least 2 things. 1) If my fund has to rely on the FAANGs to get a decent return, I might as well select a fund that provides the real deal and, 2) the S&P is perhaps not as safe from market risk (diversity and all that) as I hoped if the FAANGs get slammed. What do you think?

Investments - The Barber Financial Group .....What is Driving the Stock Market?
Dean Barber August 3, 2020

EXCERPTS …. From conversation between Bud Casper and Dean Barber … Dean: Okay, Bud, here we are, we’re having this conversation on Aug 3, 2020.
Bud: Yes, indeed.
Let’s jump up to the S&P 500, which is essentially a flat line. It’s down by 0.21% right now. Alright, what’s up at the top? I don’t think it’s any surprise it’s the NASDAQ composite. The NASDAQ composite is higher by 20%. What’s that telling us? We see a 37% differential between SmallCaps and technology, or the NASDAQ, this year in seven months. What’s that tell us?

Bud: Well, I think we have a situation where the five big companies in technology are driving the returns, both for the S&P 500 and the tech sector. It does explain what we’re experiencing at this point. If you look at it right now, the S&P 500, 25-26% of the return to the S&P 500 comes from technology, and specifically, those five companies, Facebook, Amazon, Microsoft, Alphabet, and Apple.

Bud: Yeah, from a historical perspective, if you think of the 20s, 30s, and 40s, Dean, what was the way we judged performance in the stock market? The Dow Jones Industrial Average. Why? Because we were a manufacturing economy at that time. In 1957, Standard and Poor’s came in and said, “That’s not a fair way of looking at the market today.” So, they divided the market into 11 different sectors, and they filled each of those sectors up with stocks that best represented this sector. And that was a good way of truly measuring what the broad-based market was doing.

But if I were to tell you that technology today represents 26% of the S&P 500 return, what does that tell you? The S&P has been biasing the portfolio to technology. Why would they do to do that? They’re seeing all this money coming into pension plans, IRA accounts, and individual accounts getting invested in the S&P 500. And if that were to perform equal-weighted, you wouldn’t get the returns that you’re getting out of the S&P 500 you do today.

Dean: Well, here’s why. Take a look at Figure 2 above. Figure 2 shows us the different sectors on a year to date basis. Let’s start up at the top with information technology year to date, plus 15.21%. You can scroll on down, and we only see four sectors that are in positive territory. When we get to the S&P 500, it isn’t a sector, but it’s more of a benchmark. It’s the one that’s flat. Okay, so what do we see? Consumer staples, negative. Materials, negative. Utilities, negative. Real estate, negative. Industrials, negative. Financials, negative. Down at the bottom, which shouldn’t be a surprise, is energy, negative 38%.

You see a 53% variation between the best sector and the worst sector in the S&P 500. The average of those sectors, as weighted inside the S&P 500, gives us the flat return this year. But you can the tendency to want to be overweighted in technology because that’s where the money is being made.

 

[bwoods11]

I'd rather have my money in the broad market than any high flyer. Today's darling is tomorrow's dog.

Like Apple? Walmart, Home Depot, McDonalds...Or Chipotle?

Darlings, still cranking out major returns!

 

[yoderjac]

Check this out fellas ... if the S&P 500 is being over-weighted with FAANG stocks to provide a return, an investor might conclude at least 2 things. 1) If my fund has to rely on the FAANGs to get a decent return, I might as well select a fund that provides the real deal and, 2) the S&P is perhaps not as safe from market risk (diversity and all that) as I hoped if the FAANGs get slammed. What do you think?

Investments - The Barber Financial Group .....What is Driving the Stock Market?
Dean Barber August 3, 2020

EXCERPTS …. From conversation between Bud Casper and Dean Barber … Dean: Okay, Bud, here we are, we’re having this conversation on Aug 3, 2020.
Bud: Yes, indeed.
Let’s jump up to the S&P 500, which is essentially a flat line. It’s down by 0.21% right now. Alright, what’s up at the top? I don’t think it’s any surprise it’s the NASDAQ composite. The NASDAQ composite is higher by 20%. What’s that telling us? We see a 37% differential between SmallCaps and technology, or the NASDAQ, this year in seven months. What’s that tell us?

Bud: Well, I think we have a situation where the five big companies in technology are driving the returns, both for the S&P 500 and the tech sector. It does explain what we’re experiencing at this point. If you look at it right now, the S&P 500, 25-26% of the return to the S&P 500 comes from technology, and specifically, those five companies, Facebook, Amazon, Microsoft, Alphabet, and Apple.

Bud: Yeah, from a historical perspective, if you think of the 20s, 30s, and 40s, Dean, what was the way we judged performance in the stock market? The Dow Jones Industrial Average. Why? Because we were a manufacturing economy at that time. In 1957, Standard and Poor’s came in and said, “That’s not a fair way of looking at the market today.” So, they divided the market into 11 different sectors, and they filled each of those sectors up with stocks that best represented this sector. And that was a good way of truly measuring what the broad-based market was doing.

But if I were to tell you that technology today represents 26% of the S&P 500 return, what does that tell you? The S&P has been biasing the portfolio to technology. Why would they do to do that? They’re seeing all this money coming into pension plans, IRA accounts, and individual accounts getting invested in the S&P 500. And if that were to perform equal-weighted, you wouldn’t get the returns that you’re getting out of the S&P 500 you do today.

Dean: Well, here’s why. Take a look at Figure 2 above. Figure 2 shows us the different sectors on a year to date basis. Let’s start up at the top with information technology year to date, plus 15.21%. You can scroll on down, and we only see four sectors that are in positive territory. When we get to the S&P 500, it isn’t a sector, but it’s more of a benchmark. It’s the one that’s flat. Okay, so what do we see? Consumer staples, negative. Materials, negative. Utilities, negative. Real estate, negative. Industrials, negative. Financials, negative. Down at the bottom, which shouldn’t be a surprise, is energy, negative 38%.

You see a 53% variation between the best sector and the worst sector in the S&P 500. The average of those sectors, as weighted inside the S&P 500, gives us the flat return this year. But you can the tendency to want to be overweighted in technology because that’s where the money is being made.

FAANG stocks may be representing a larger segment of the S&P over time, but has technology become a greater percentage of the overall economy over time as well?

 

[yoderjac]

Like Apple? Walmart, Home Depot, McDonalds...Or Chipotle?

Darlings, still cranking out major returns!

For every high flyer that is producing great returns, there are 10 previous high flyers that have lost a lot of value. If you happen to pick the right stock you are pretty happy, but those who picked the wrong ones are in bad shape. Sure, there is nothing wrong with buying solid companies. The problem is that every company has company specific risks, even good ones. The question is this: Is your portfolio large enough that you can buy enough companies to mitigate individual company risk? Most of us don't have that luxury. My point was simple, I'd rather be invested in the broad market though a low cost fund or ETFs than buy high flyers.

 

[Buckly]

Check this out fellas ... if the S&P 500 is being over-weighted with FAANG stocks to provide a return, an investor might conclude at least 2 things. 1) If my fund has to rely on the FAANGs to get a decent return, I might as well select a fund that provides the real deal and, 2) the S&P is perhaps not as safe from market risk (diversity and all that) as I hoped if the FAANGs get slammed. What do you think?

Investments - The Barber Financial Group .....What is Driving the Stock Market?
Dean Barber August 3, 2020

EXCERPTS …. From conversation between Bud Casper and Dean Barber … Dean: Okay, Bud, here we are, we’re having this conversation on Aug 3, 2020.
Bud: Yes, indeed.
Let’s jump up to the S&P 500, which is essentially a flat line. It’s down by 0.21% right now. Alright, what’s up at the top? I don’t think it’s any surprise it’s the NASDAQ composite. The NASDAQ composite is higher by 20%. What’s that telling us? We see a 37% differential between SmallCaps and technology, or the NASDAQ, this year in seven months. What’s that tell us?

Bud: Well, I think we have a situation where the five big companies in technology are driving the returns, both for the S&P 500 and the tech sector. It does explain what we’re experiencing at this point. If you look at it right now, the S&P 500, 25-26% of the return to the S&P 500 comes from technology, and specifically, those five companies, Facebook, Amazon, Microsoft, Alphabet, and Apple.

Bud: Yeah, from a historical perspective, if you think of the 20s, 30s, and 40s, Dean, what was the way we judged performance in the stock market? The Dow Jones Industrial Average. Why? Because we were a manufacturing economy at that time. In 1957, Standard and Poor’s came in and said, “That’s not a fair way of looking at the market today.” So, they divided the market into 11 different sectors, and they filled each of those sectors up with stocks that best represented this sector. And that was a good way of truly measuring what the broad-based market was doing.

But if I were to tell you that technology today represents 26% of the S&P 500 return, what does that tell you? The S&P has been biasing the portfolio to technology. Why would they do to do that? They’re seeing all this money coming into pension plans, IRA accounts, and individual accounts getting invested in the S&P 500. And if that were to perform equal-weighted, you wouldn’t get the returns that you’re getting out of the S&P 500 you do today.

Dean: Well, here’s why. Take a look at Figure 2 above. Figure 2 shows us the different sectors on a year to date basis. Let’s start up at the top with information technology year to date, plus 15.21%. You can scroll on down, and we only see four sectors that are in positive territory. When we get to the S&P 500, it isn’t a sector, but it’s more of a benchmark. It’s the one that’s flat. Okay, so what do we see? Consumer staples, negative. Materials, negative. Utilities, negative. Real estate, negative. Industrials, negative. Financials, negative. Down at the bottom, which shouldn’t be a surprise, is energy, negative 38%.

You see a 53% variation between the best sector and the worst sector in the S&P 500. The average of those sectors, as weighted inside the S&P 500, gives us the flat return this year. But you can the tendency to want to be overweighted in technology because that’s where the money is being made.

To your point number 1. This is the trend in investing now. Why have the losers in your portfolio. Index funds might not be the best choice anymore. Do your homework and pick more winners. To point 2. I don’t think the FAANG stocks will be doing a nose dive anytime soon. They will be strong for years and years. If they do wane it will be over a long period of time 20 years from now.

 

[OakSeeds]

the questions were rhetorical ... I agree completely .... In post 661, I essentially made that argument.

 

[swat1018]

Need advice. Well, maybe more of a poll. Finishing up taxes here. I could put 12k in traditional IRA, and save a few dollars on taxes, or pay the tax and set that money into a dry powder account. That account would be (most likely) strictly for down payments on income producing property when the time is right. Could always do the IRA and withdraw w/ penalty after a say Dermtech goes up tenfold. I like a war chest of dry powder, but at what cost? I could also use that after-tax money and pay off both my minivan and pickup, both at ~3.5% right now. Lotta financial wizards in the habitat forum.

I agree with paying off car loans first. Might want to look into a self-directed IRA. It's not for everyone, but you are able to hold unconventional investments such as land, condos, gold, etc within it.

 

[Mortenson]

So what part of the rut should I be looking forward to? Dermtech just landed Texas, up big tomorrow. Best part is we still have 47 states left and the rest of the world. Tomorrow should be fun.

Do you see any pullback at all? It's up 25% today on the TX news. I did a little due diligence on them back in the 30's and was looking for a good day to buy, which never happened. Been burned on a few "miracle, slamdunk" biotechs over the years.

 

[Mortenson]

I agree with paying off car loans first. Might want to look into a self-directed IRA. It's not for everyone, but you are able to hold unconventional investments such as land, condos, gold, etc within it.

The self-directed IRA is somewhat interesting. Not sure if it'll work for me this go-round. I'm tempted to use the money to pay off a few loans, but also I remember last time I paid off a farm early, the same year I paid off my boat and a vehicle, and my credit score crashed by 150 points by doing all that. Seems backwards but that's how it works. The market feels "toppy" around here, but with fed pumping to the moon who even knows. I think I may just put 6k in my IRA and pay off one vehicle. That way I'm more likely to be only half wrong, haha.

 

[chummer]

Do you see any pullback at all? It's up 25% today on the TX news. I did a little due diligence on them back in the 30's and was looking for a good day to buy, which never happened. Been burned on a few "miracle, slamdunk" biotechs over the years.

There will be pull backs I'm sure but I don't see anything stopping the overall upward trend. The technology is game changing and being used. It is not a pipe dream like some of the other bio stocks I am in. It is a cheaper, safer, more accurate alternative to current practices. Insurance companies will eventually mandate this to be standard practice. Unfortunately, billing approval has to be done one state at a time. This is the third one, and second one since I have been in and both times there was no pull back after the big jumps. Of coarse I am just a guy that likes apple trees hanging out on a habitat forum.

Sent from my SM-G981U using Tapatalk

 

[Telemark]

DMTK has been amazing. I'm moving all my GLD into DMTK and NVO.