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Imo the growth in the stock market is very justified.
All countries essentially have it under control now, the growth is predictable, and looks a lot better than 50% of the country infected within a couple months. Even if US cases are increasing, we see how it worked out for many very similar countries, and western countries demonstrated well what it takes to slow the spread of COVID 19 down. We see that the reaction is severe, but its controlled... We're not spiralling into chaos.
I think it's highly likely that the 2200 drop in S&P500 was the bottom of the valley. Idk, right now I'm in a tough situation... Part of me just says to not be greedy and take the 30% gain as it returns to peak... the future looks a lot more clear to me now. But buying after week of an upwards trend is also not fun. Ugh, I'll probably do my usual hesitating and missing my chance. Next piece of bad news that shakes the market 10% ish will be my buy in criteria with the rest of my capital. If we keep up this trend and keeps going up with no significant drops, bigger down payment on property. Though the USD to CAD is a big decider too. I'm expecting the 3 year CAD/USD to be 1.4-1.43, so not too eager to put too much in US stocks if our dollar keeps depreciating. On the flip side, maybe we will gain some valuation from dealing with the crisis quicker, idk.
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I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit?
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Probably don't give them advice.
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Yeah, unless you are truly knowledgeable, tell them to see a financial adviser (and most financial advisers are charlatan salespeople as well). They will tell your people to buy mutual funds with a certain risk profile (mixture of bonds/stocks) based on their age/income. They'll have no specific advice about the current situation because they don't actually know anything.
Right now volatility in the market is pretty crazy. If they like gambling, they can take a shot, but it's gambling.
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On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit?
Waiting a bit is probably the only advice you shouldn't give them. Time in market is the #1 thing for most investors.
I'd tell them to go to the bank and open up an investing account, don't know where you live, here that'd be a TFSA firstly.
If they are under 35 and have an average risk tolerance, they should go see an advisor and ask about different ETF's. Individual stocks are fine, but giving them advice on them is like telling them what they should have for lunch.
For most people I'd tell them to go buy an S&P500 etf today. Especially if they live in the US.
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On April 01 2020 00:17 FiWiFaKi wrote:Show nested quote +On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit? Waiting a bit is probably the only advice you shouldn't give them. Time in market is the #1 thing for most investors. I'd tell them to go to the bank and open up an investing account, don't know where you live, here that'd be a TFSA firstly. If they are under 35 and have an average risk tolerance, they should go see an advisor and ask about different ETF's. Individual stocks are fine, but giving them advice on them is like telling them what they should have for lunch. For most people I'd tell them to go buy an S&P500 etf today. Especially if they live in the US.
I'll never understand this obsession with ETFs that most have. Though I'm biased because I detest the bloody things from the get go, they get advertised so heavily and I don't trust them.
Btw I checked out the performance of an inverse 2x ETF (DAX 2x inverse something something) against the crash of the depictured index. Basically DAX went below Jan 16 levels but the ETF didn't come close to surpassing it's Jan 16 levels. So you aren't even guaranteed that something gets tracked perfectly. Maybe also because fees somewhere.
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United States44190 Posts
On April 01 2020 00:49 Vivax wrote:Show nested quote +On April 01 2020 00:17 FiWiFaKi wrote:On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit? Waiting a bit is probably the only advice you shouldn't give them. Time in market is the #1 thing for most investors. I'd tell them to go to the bank and open up an investing account, don't know where you live, here that'd be a TFSA firstly. If they are under 35 and have an average risk tolerance, they should go see an advisor and ask about different ETF's. Individual stocks are fine, but giving them advice on them is like telling them what they should have for lunch. For most people I'd tell them to go buy an S&P500 etf today. Especially if they live in the US. I'll never understand this obsession with ETFs that most have. Though I'm biased because I detest the bloody things from the get go, they get advertised so heavily and I don't trust them. Btw I checked out the performance of an inverse 2x ETF (DAX 2x inverse something something) against the crash of the depictured index. Basically DAX went below Jan 16 levels but the ETF didn't come close to surpassing it's Jan 16 levels. So you aren't even guaranteed that something gets tracked perfectly. Maybe also because fees somewhere.
An ETF is generally just a basket of investments that you can buy and sell. It’s pretty weird to hate baskets. You can hate the contents of baskets and there are certainly many baskets filled with stuff that I wouldn’t touch but hating baskets is an unusual stance. Are you sure you haven’t gotten confused between ETFs as a concept and some specific ETFs filled with things you don’t like?
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I could have been more precise, I was talking about index ETF's.
Inverse and levereged ETF's are a completely different ball game. They rely on a variety of options contracts, need to be rebalanced daily, and are reliant on borrowed money, which has its fees associated with it. Their long term performance is not representative of the market. It's a day trading tool, which for me is a zero sum game, versus long term investing.
In general, I don't recommend any long term investor to option trade, even call options, I think in most cases you get higher expected return buying the stock itself.
Leverage on the other hand I think is a fine tool, though as you're using borrowed money, the amount of additional money you make is fairly small. For example, with my margin account I can buy as much as I want, as long as 30% is my own money. But currently I have a 4.9% interest rate I pay on this margin. If my expected return is 8%, that is 3.1% I make on the margin, but with heavily increased variability. For me it's still worth it in certain market conditions, but just trying to show the diminishing returns of being on the margin.
Imo if your goal is to raise your average expected return with no consideration for risk (if you asked to play heads or tails for 10k but the coin lands on heads 51% of the time, I would accept to play without a second thought)... Then the way to go is take a HELOC, or really any long term loan with the smallest interest rate. Margin is good for short term opportunities, but becomes too expensive. And 3x leveraged ETF's don't increase your expected return, they magnify wins, and magnify losses even more. They like options, are only good when you think you know something that almost nobody else does.
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On April 01 2020 01:38 KwarK wrote:Show nested quote +On April 01 2020 00:49 Vivax wrote:On April 01 2020 00:17 FiWiFaKi wrote:On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit? Waiting a bit is probably the only advice you shouldn't give them. Time in market is the #1 thing for most investors. I'd tell them to go to the bank and open up an investing account, don't know where you live, here that'd be a TFSA firstly. If they are under 35 and have an average risk tolerance, they should go see an advisor and ask about different ETF's. Individual stocks are fine, but giving them advice on them is like telling them what they should have for lunch. For most people I'd tell them to go buy an S&P500 etf today. Especially if they live in the US. I'll never understand this obsession with ETFs that most have. Though I'm biased because I detest the bloody things from the get go, they get advertised so heavily and I don't trust them. Btw I checked out the performance of an inverse 2x ETF (DAX 2x inverse something something) against the crash of the depictured index. Basically DAX went below Jan 16 levels but the ETF didn't come close to surpassing it's Jan 16 levels. So you aren't even guaranteed that something gets tracked perfectly. Maybe also because fees somewhere. An ETF is generally just a basket of investments that you can buy and sell. It’s pretty weird to hate baskets. You can hate the contents of baskets and there are certainly many baskets filled with stuff that I wouldn’t touch but hating baskets is an unusual stance. Are you sure you haven’t gotten confused between ETFs as a concept and some specific ETFs filled with things you don’t like?
When you buy an ETF, to my knowledge the issuer can lend the underlying assets you paid for, exposing himself to counterparty risk, as well as having a risk of his own.
When you buy stocks, nobody can touch your shares, and the only counterparty is the company you bought.
Also because of distortions. Biggies like FAANG are the main price drivers behind the ETFs they are included in, dragging along every other company they are listed with to those companies benefit, no matter how profitable those are. On the other hand if the biggies start seeing heavy selling for some reason, other smaller companies listed with them would likely get hit much harder in comparison.
I prefer to look at it as a boat with several rowers. Some row super strong, some might barely row at all but had a few good years. With the total debt of all companies in the boat being holes in the ship the strong rowers have to outpace.
I might be seeing it too darkly, but to each his own. I'm a fan of stockpicking with a bit of options on the side when I feel like gambling.
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On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit?
Wait for what? Things to settle down? Yeah, maybe.
But if they're playing the long game, this is as good a time as any to go ahead and acquire some shares on the cheap.
Off topic, I read this thread as an observer and I really think it should just renamed into "the trading thread". There's a big difference between "trading" and "investing" and it seems like most of the discussion in here is about trading.
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These are people with not as much money as you big wigs, so they'll be throwing less than 5k into something. Probably less than 1.5. So when I say "wait a bit", I meant as wait for the end of the month or week, assess where the market may be headed (reading financial websites/outlooks) and then make a decision. I think I mentioned to someone to buy GSK or BAC a few weeks ago before this package got sent out.
Now I'm looking at which pot shop is worth the investment.
But thanks for the advice.
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On April 01 2020 02:12 Vivax wrote:Show nested quote +On April 01 2020 01:38 KwarK wrote:On April 01 2020 00:49 Vivax wrote:On April 01 2020 00:17 FiWiFaKi wrote:On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit? Waiting a bit is probably the only advice you shouldn't give them. Time in market is the #1 thing for most investors. I'd tell them to go to the bank and open up an investing account, don't know where you live, here that'd be a TFSA firstly. If they are under 35 and have an average risk tolerance, they should go see an advisor and ask about different ETF's. Individual stocks are fine, but giving them advice on them is like telling them what they should have for lunch. For most people I'd tell them to go buy an S&P500 etf today. Especially if they live in the US. I'll never understand this obsession with ETFs that most have. Though I'm biased because I detest the bloody things from the get go, they get advertised so heavily and I don't trust them. Btw I checked out the performance of an inverse 2x ETF (DAX 2x inverse something something) against the crash of the depictured index. Basically DAX went below Jan 16 levels but the ETF didn't come close to surpassing it's Jan 16 levels. So you aren't even guaranteed that something gets tracked perfectly. Maybe also because fees somewhere. An ETF is generally just a basket of investments that you can buy and sell. It’s pretty weird to hate baskets. You can hate the contents of baskets and there are certainly many baskets filled with stuff that I wouldn’t touch but hating baskets is an unusual stance. Are you sure you haven’t gotten confused between ETFs as a concept and some specific ETFs filled with things you don’t like? When you buy an ETF, to my knowledge the issuer can lend the underlying assets you paid for, exposing himself to counterparty risk, as well as having a risk of his own. When you buy stocks, nobody can touch your shares, and the only counterparty is the company you bought. Also because of distortions. Biggies like FAANG are the main price drivers behind the ETFs they are included in, dragging along every other company they are listed with to those companies benefit, no matter how profitable those are. On the other hand if the biggies start seeing heavy selling for some reason, other smaller companies listed with them would likely get hit much harder in comparison. I prefer to look at it as a boat with several rowers. Some row super strong, some might barely row at all but had a few good years. With the total debt of all companies in the boat being holes in the ship the strong rowers have to outpace. I might be seeing it too darkly, but to each his own. I'm a fan of stockpicking with a bit of options on the side when I feel like gambling.
While you could expose yourself to more risk, why would you? (as an ETF owner). Get $5bil in your index fund ETF, get paid 0.1%, or $5mil per year, some of that will surely be trading costs for rebalancing... But you make a nice return for having no risk to manage peoples' money. And nobody gets angry at you if it doesn't perform because you're just following an index.
I don't think it'd be good for the market if everyone was buying ETF's, but while it's still reasonably low, just free ride those low fees while you still can. Your strategy is fine imo, you're in more control, but imo on average you spend more time for similar expected returns.
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On April 01 2020 02:45 ZerOCoolSC2 wrote:
These are people with not as much money as you big wigs, so they'll be throwing less than 5k into something. Probably less than 1.5. So when I say "wait a bit", I meant as wait for the end of the month or week, assess where the market may be headed (reading financial websites/outlooks) and then make a decision. I think I mentioned to someone to buy GSK or BAC a few weeks ago before this package got sent out.
Now I'm looking at which pot shop is worth the investment.
But thanks for the advice.
For less than 1.5k, might be better to invest into stuff that allows you to DIY for whatever might go scarce in the current supply chain disruptions.
Couldn't find cigarette filters at the gas station today. Maybe I should find a way to produce my own was what I was thinking. And grow tobacco in the garden. With the amount of smokers in Austria we'd probably have riots without smokes.
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On April 01 2020 02:45 ZerOCoolSC2 wrote:
These are people with not as much money as you big wigs, so they'll be throwing less than 5k into something. Probably less than 1.5. So when I say "wait a bit", I meant as wait for the end of the month or week, assess where the market may be headed (reading financial websites/outlooks) and then make a decision. I think I mentioned to someone to buy GSK or BAC a few weeks ago before this package got sent out.
Now I'm looking at which pot shop is worth the investment.
But thanks for the advice.
Okay got it, makes sense. Now is this money that they are going to need anytime soon? If they can afford to put it away and forget about it, this is a fine opportunity to take advantage of the discount.
If its a short term plan they are asking about and are going to need the money for something else anytime soon, regrettably that is not my department
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On April 01 2020 02:45 ZerOCoolSC2 wrote:
These are people with not as much money as you big wigs, so they'll be throwing less than 5k into something. Probably less than 1.5. So when I say "wait a bit", I meant as wait for the end of the month or week, assess where the market may be headed (reading financial websites/outlooks) and then make a decision. I think I mentioned to someone to buy GSK or BAC a few weeks ago before this package got sent out.
Now I'm looking at which pot shop is worth the investment.
But thanks for the advice.
Imo reading popular financial articles will do you more harm than good. Learn the theory and mechanics of the market, don't read any opinion pieces on current events.
If you're going to buy an index, today on average (very marginally) will be better than next week or next month. Even if the market stays where it is, you'll earn a miniscule amount of dividends in that time.
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So do your posts constitute opinion pieces on current events worth ignoring, or are they something else?
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Vivax, Aveng3r, FiWi, thanks.
They can probably afford to put it away and forget about it. They just saw this as an opportune time to get in and asked me. I've done it here and there when I had an itch but it has been some time since I did a deep dive into everything.
I'm generally of the idea that now, depending on the sector you think will make the biggest rebound over a few months (6) then invest what you can into that and forget about it. I've also thrown my retirement into G funds when I worked for the IRS and it wasn't a bad investment. I think my last investment was with my last firm and it made a decent amount in the time I worked there (pretty sure it was a mutual of some sort).
Still, thanks for the input.
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On April 01 2020 03:07 farvacola wrote:
So do your posts constitute opinion pieces on current events worth ignoring, or are they something else?
Facts about the world like government response to COVID is fine, because those aren't opinions. Analysing people's purchasing decisions in response to certain events is also fine. But when there's a article that GS expected Sp500 to go to x, better is to wipe that information from your memory imo
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United States44190 Posts
On April 01 2020 02:12 Vivax wrote:Show nested quote +On April 01 2020 01:38 KwarK wrote:On April 01 2020 00:49 Vivax wrote:On April 01 2020 00:17 FiWiFaKi wrote:On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit? Waiting a bit is probably the only advice you shouldn't give them. Time in market is the #1 thing for most investors. I'd tell them to go to the bank and open up an investing account, don't know where you live, here that'd be a TFSA firstly. If they are under 35 and have an average risk tolerance, they should go see an advisor and ask about different ETF's. Individual stocks are fine, but giving them advice on them is like telling them what they should have for lunch. For most people I'd tell them to go buy an S&P500 etf today. Especially if they live in the US. I'll never understand this obsession with ETFs that most have. Though I'm biased because I detest the bloody things from the get go, they get advertised so heavily and I don't trust them. Btw I checked out the performance of an inverse 2x ETF (DAX 2x inverse something something) against the crash of the depictured index. Basically DAX went below Jan 16 levels but the ETF didn't come close to surpassing it's Jan 16 levels. So you aren't even guaranteed that something gets tracked perfectly. Maybe also because fees somewhere. An ETF is generally just a basket of investments that you can buy and sell. It’s pretty weird to hate baskets. You can hate the contents of baskets and there are certainly many baskets filled with stuff that I wouldn’t touch but hating baskets is an unusual stance. Are you sure you haven’t gotten confused between ETFs as a concept and some specific ETFs filled with things you don’t like? When you buy an ETF, to my knowledge the issuer can lend the underlying assets you paid for, exposing himself to counterparty risk, as well as having a risk of his own. When you buy stocks, nobody can touch your shares, and the only counterparty is the company you bought. Also because of distortions. Biggies like FAANG are the main price drivers behind the ETFs they are included in, dragging along every other company they are listed with to those companies benefit, no matter how profitable those are. On the other hand if the biggies start seeing heavy selling for some reason, other smaller companies listed with them would likely get hit much harder in comparison. I prefer to look at it as a boat with several rowers. Some row super strong, some might barely row at all but had a few good years. With the total debt of all companies in the boat being holes in the ship the strong rowers have to outpace. I might be seeing it too darkly, but to each his own. I'm a fan of stockpicking with a bit of options on the side when I feel like gambling.
ETFs are no more vulnerable to embezzlement by the party holding the asset than anything else.
I think it’s specific ETFs you’re not a fan of. For example your point about large cap companies being overweight in the ETFs they’re in applies to cap weighted index funds but ignores the existence of inversely cap weighted index funds (larger holdings in smaller companies). ETFs are a basket that can hold damn near anything.
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On April 01 2020 00:17 FiWiFaKi wrote:Show nested quote +On March 31 2020 10:58 ZerOCoolSC2 wrote:
I've got some people asking me about stocks/bonds/mutuals to look at for investing. Any advice I should be giving them than to wait a bit? For most people I'd tell them to go buy an S&P500 etf today. Especially if they live in the US.
No no no. This weird obsession with only the S&P 500 is something that I blame Buffett for when he put that in his shareholder letter and recommended 90% S&P 500 and 10 % US bonds.
Diversifying with a global index means you get everything instead of picking the US to stay on top. Global indexes hold about 54% US stocks anyways. Eg. VTWAX for Americans.
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EPT
