EPTTrading/Investing Thread - Page 82
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{CC}StealthBlue
United States41117 Posts
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CuddlyCuteKitten
Sweden2609 Posts
I'm a very disinterested investor (Basically low cost index funds only...) but I'm getting a bit worried lately. Inflation in Sweden is going up a lot. A the same time our housing market is fucked and people have a lot of loans so the government is unlikely to hike intrests. If I had a property I would pay down my loans but I don't. Global economy seems a bit worrisome too. I feel like having all my assets in stocks is not the greatest idea right now, but having them in currency is even worse. I also don't want to buy a house because right now they are super overpriced and I can see interest rates going up in the future. What should I buy to diversify? I was think of buying an index fund with companies producing raw materials (mining, oil, food etc) because they can just hike prices with inflation and those companies should be less likely to be overvalued? Not changing my whole portfolio just putting in money waiting to be invested. Good idea, bad idea? Also due to stock growth my portfolio that was originally 80 % stocks 20 % interest "things" (bonds?) is now like 91/9 split. However I have made 0 money on interest bonds. Should I re balance now? Thankful for some advice. | ||
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CorsairHero
Canada9491 Posts
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CuddlyCuteKitten
Sweden2609 Posts
On October 04 2021 18:19 CorsairHero wrote: Rebalancing is a form of "buy low sell high" which should be applied in your case as your bond allocation is far form your plan. Seems like a good idea. Thanks. | ||
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Elroi
Sweden5595 Posts
On October 04 2021 17:55 CuddlyCuteKitten wrote: I need some help boys. I'm a very disinterested investor (Basically low cost index funds only...) but I'm getting a bit worried lately. Inflation in Sweden is going up a lot. A the same time our housing market is fucked and people have a lot of loans so the government is unlikely to hike intrests. If I had a property I would pay down my loans but I don't. Global economy seems a bit worrisome too. I feel like having all my assets in stocks is not the greatest idea right now, but having them in currency is even worse. I also don't want to buy a house because right now they are super overpriced and I can see interest rates going up in the future. What should I buy to diversify? I was think of buying an index fund with companies producing raw materials (mining, oil, food etc) because they can just hike prices with inflation and those companies should be less likely to be overvalued? Not changing my whole portfolio just putting in money waiting to be invested. Good idea, bad idea? Also due to stock growth my portfolio that was originally 80 % stocks 20 % interest "things" (bonds?) is now like 91/9 split. However I have made 0 money on interest bonds. Should I re balance now? Thankful for some advice. I'm in a similar position as the one you describe. I'm not so savvy either so I guess you should take my advice with a grain of salt. But one thing I can recommend is peer to peer loans to diversify your risks. I have tried a couple of different services and my favorite by far is Savelend because it gets you high returns without you having to do anything (on average about 10% per year since 2007 iirc). That is great compared to the competition. I could only get as high return on Lendify by picking specific loans to invest in, which takes a lot of time and can cause some extra risks if you by accident buy the same loans over and over again. Another good thing about Savelend is that it is listed on the stock exchange so Finansinspektionen has made a thorough review of the company. There are some risks obviously: 1) the risk of capital loss. But that is mitigated by Savelend’s policy of rebuying defaulted loans for about 90% (iirc) of their value after a while (since I don’t like big risks I think that is great). 2) Savelend could go bankrupt. That would mean that you still legally have the claims but I guess it would be hard and take time to get you your money back. I basically use this as a way to diversify from the stock market. Right now I have about 50 000 crowns in Savelend but I’m aiming to have about 100 000 there, which is around 20% of my savings. Tip: If you want to start get your girlfriend or someone else to make an account and invite you – like that you can double the welcome bonus (your gf or friend doesn’t need to invest anything). There is a great flashback thread about Savelend too – google it! | ||
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LegalLord
United Kingdom13775 Posts
On October 04 2021 17:55 CuddlyCuteKitten wrote: I need some help boys. I'm a very disinterested investor (Basically low cost index funds only...) but I'm getting a bit worried lately. Inflation in Sweden is going up a lot. A the same time our housing market is fucked and people have a lot of loans so the government is unlikely to hike intrests. If I had a property I would pay down my loans but I don't. Global economy seems a bit worrisome too. I feel like having all my assets in stocks is not the greatest idea right now, but having them in currency is even worse. I also don't want to buy a house because right now they are super overpriced and I can see interest rates going up in the future. What should I buy to diversify? I was think of buying an index fund with companies producing raw materials (mining, oil, food etc) because they can just hike prices with inflation and those companies should be less likely to be overvalued? Not changing my whole portfolio just putting in money waiting to be invested. Good idea, bad idea? Also due to stock growth my portfolio that was originally 80 % stocks 20 % interest "things" (bonds?) is now like 91/9 split. However I have made 0 money on interest bonds. Should I re balance now? Thankful for some advice. I’ve definitely hedged the hell out of my own investments lately. Some elevated levels of cash, some standard US index funds, and then some international stocks, as the mix of normal stuff. Commodities seem like they’re largely on a tear lately due to a mismatch between the supply shock of the last year drastically curtailing production and the demand rise of things “going back to normal” - the O&G / coal talk of mine over the last page or so applies to a lot of other raw materials too. I personally wouldn’t recommend opening a big position in something so cyclical when there’s good reason to believe it’s at an elevated price already. Personally, gold was my hedge for “what if both stocks and cash get whacked by inflation?” It’s performed only so-so, but we’ve not yet hit an inflationary death spiral so I didn’t expect much different. But maybe gold, of the physical, shares in physical, or gold mining company variety, would serve the purpose you’re after? Weird times for sure; can’t exactly say that I have a good read what will happen next so hedging against all the major possibilities was my own approach. Would’ve made more since 2020 by investing in tech stocks or gambling with WSB but eh. | ||
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Vivax
21972 Posts
A wood based heating system. A backup non-oil based power source, rechargeable. Food for a while. A chicken coop. If you are unlucky enough to be renting an apartment, a bathtub with a few of the nutritious birds will have to do. Think of a scenario where common daily goods start gradually disappearing and become unobtainable. For returns, rent an oil tanker, stuff it with oil and park it somewhere, or rent it to someone. Don't forget to slap some mercenaries on it unless you want a Somali captain (an acquaintance in Italy is actually doing this through his company as they became unable to import things from Asia). Alternatively, have a swimming pool filled with crude. If everything is going to turn out ok with the energy supply though, buying parking lots and renting them out in high density cities seems decent. Nothing spells more boomer than being a landlord. | ||
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Acrofales
Spain17980 Posts
On October 04 2021 22:04 Vivax wrote: Not exactly financially centered (or 100% serious), but I'd probably want to have these things down the road, which is going to make me look like some hardcore prepper, but whatever: A wood based heating system. A backup non-oil based power source, rechargeable. Food for a while. A chicken coop. If you are unlucky enough to be renting an apartment, a bathtub with a few of the nutritious birds will have to do. Think of a scenario where common daily goods start gradually disappearing and become unobtainable. For returns, rent an oil tanker, stuff it with oil and park it somewhere, or rent it to someone. Don't forget to slap some mercenaries on it unless you want a Somali captain (an acquaintance in Italy is actually doing this through his company as they became unable to import things from Asia). Alternatively, have a swimming pool filled with crude. If everything is going to turn out ok with the energy supply though, buying parking lots and renting them out in high density cities seems decent. Nothing spells more boomer than being a landlord. I don't think preparing for the apocalypse is what kitten meant when asking how to diversify their investments. | ||
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Timebon3s
Norway690 Posts
There is also a shortage in semiconductors now which will greatly impact the markets. The most used semiconductor materials are silicon, germanium, and gallium arsenide. I don't know if thats entierly related to shortage of materials though. | ||
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Vivax
21972 Posts
On October 04 2021 23:04 Acrofales wrote: I don't think preparing for the apocalypse is what kitten meant when asking how to diversify their investments. Not the apocalypse, but a prolonged power outage. Our ministry of internal affairs reccommends to prepare for such a possibility. If you got spare money and don't know what to do with it, this doesn't seem like a stupid thing. https://en.wikipedia.org/wiki/2021_Texas_power_crisis | ||
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{CC}StealthBlue
United States41117 Posts
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Blitzkrieg0
United States13132 Posts
On October 04 2021 23:42 Timebon3s wrote: If you are worried about inflation and the stock market, it's apparently a good idea to invest in raw materials such as copper, silver, coffee etc. There is also a shortage in semiconductors now which will greatly impact the markets. The most used semiconductor materials are silicon, germanium, and gallium arsenide. I don't know if thats entierly related to shortage of materials though. How do people deal with storage for all these raw materials exactly? | ||
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RvB
Netherlands6209 Posts
On October 04 2021 17:55 CuddlyCuteKitten wrote: I need some help boys. I'm a very disinterested investor (Basically low cost index funds only...) but I'm getting a bit worried lately. Inflation in Sweden is going up a lot. A the same time our housing market is fucked and people have a lot of loans so the government is unlikely to hike intrests. If I had a property I would pay down my loans but I don't. Global economy seems a bit worrisome too. I feel like having all my assets in stocks is not the greatest idea right now, but having them in currency is even worse. I also don't want to buy a house because right now they are super overpriced and I can see interest rates going up in the future. What should I buy to diversify? I was think of buying an index fund with companies producing raw materials (mining, oil, food etc) because they can just hike prices with inflation and those companies should be less likely to be overvalued? Not changing my whole portfolio just putting in money waiting to be invested. Good idea, bad idea? Also due to stock growth my portfolio that was originally 80 % stocks 20 % interest "things" (bonds?) is now like 91/9 split. However I have made 0 money on interest bonds. Should I re balance now? Thankful for some advice. If you're scared of inflation you can buy inflation linked bonds. They pay out more as inflation increases. Peer to peer lending seems like bad advice. It's very risky (why else the interest rates) and instead of diversifying you concentrate your risk. Another option is a portion of crypto since crypto prices seem uncorrelated with other assets. https://www.economist.com/finance-and-economics/2021/09/25/why-it-is-wise-to-add-bitcoin-to-an-investment-portfolio | ||
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LegalLord
United Kingdom13775 Posts
On October 05 2021 00:59 Blitzkrieg0 wrote: How do people deal with storage for all these raw materials exactly? By buying commodities in a way that doesn’t involve actually physically having them. Producers, physical trusts, futures traders, and so on. If they have trouble offloading supply and someone needs to store it, that’s how you get negative oil and the like. That’s rarer. | ||
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CuddlyCuteKitten
Sweden2609 Posts
One final question. When buying funds that have bonds in order to hedge does it matter if I buy them in my country or a fund that manages euro/US bonds? Like if the Swedish economy catches on fire, tips over and sinks in inflation, do I want my bonds in Swedish companies/governments or outside countries? Most outside funds deal in high risk bonds if I understand it correctly which seems counter productive to what I want. Also profit should go up if things go to shit at home, right? Also company or public bonds? The main point is to have something that does well if the other things don't so I imagine that I should be hoping that my stocks do well and that my gold/bonds do not but they are there just in case. You have all been really helpful btw. | ||
KwarK
United States42640 Posts
This “buy gold miners so I can make money from gold in a market crash” is completely missing the point. It doesn’t matter if the market crashes and gold becomes super valuable, that potential is already priced into the stock, it only matters if gold becomes more valuable than expected. It’s not about betting on the team most likely to win the premier league, it’s about betting on the team with a higher chance of winning than their odds imply. If the best team has 1:3 odds but a 20% chance of winning and the worst team has 1:200 odds but a 1% chance of winning then you’d be betting on the best team because you think they’ll probably win. You should be betting on the worst team. | ||
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CuddlyCuteKitten
Sweden2609 Posts
On October 05 2021 03:55 KwarK wrote: I don’t see the purpose of what you’ve done. Remember the goal isn’t to buy good companies that perform well and avoid bad ones, it’s the buy companies that are better than their price implies and avoid ones that are worse than their price implies. Apple make a shitton of money and will continue to do so but everyone already knows that, that’s why their share price is so high. If you think they’ll make more than their price implies then you should buy them, if not then you shouldn’t. This “buy gold miners so I can make money from gold in a market crash” is completely missing the point. It doesn’t matter if the market crashes and gold becomes super valuable, that potential is already priced into the stock, it only matters if gold becomes more valuable than expected. It’s not about betting on the team most likely to win the premier league, it’s about betting on the team with a higher chance of winning than their odds imply. If the best team has 1:3 odds but a 20% chance of winning and the worst team has 1:200 odds but a 1% chance of winning then you’d be betting on the best team because you think they’ll probably win. You should be betting on the worst team. That's probably correct but it's not really my goal. I just do index funds normally because I don't have the time, the knowledge or the inclination to figure that shit out. I still have like 75-80 % of everything in that and it won't change. But my country is sitting on a prospective housing bubble right now (government debt is 35 % of GDP, private debt is 300+ % of GDP) and prices for most items (gas, food) are going up sharply. I don't care if short term I make a little less money, I just want to have enough things left in terms of a hard crash to buy a house if prices go down sharply. | ||
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CuddlyCuteKitten
Sweden2609 Posts
On October 05 2021 03:55 KwarK wrote: I don’t see the purpose of what you’ve done. Remember the goal isn’t to buy good companies that perform well and avoid bad ones, it’s the buy companies that are better than their price implies and avoid ones that are worse than their price implies. Apple make a shitton of money and will continue to do so but everyone already knows that, that’s why their share price is so high. If you think they’ll make more than their price implies then you should buy them, if not then you shouldn’t. This “buy gold miners so I can make money from gold in a market crash” is completely missing the point. It doesn’t matter if the market crashes and gold becomes super valuable, that potential is already priced into the stock, it only matters if gold becomes more valuable than expected. It’s not about betting on the team most likely to win the premier league, it’s about betting on the team with a higher chance of winning than their odds imply. If the best team has 1:3 odds but a 20% chance of winning and the worst team has 1:200 odds but a 1% chance of winning then you’d be betting on the best team because you think they’ll probably win. You should be betting on the worst team. That's probably correct but it's not really my goal. I just do index funds normally because I don't have the time, the knowledge or the inclination to figure that shit out. I still have like 75-80 % of everything in that and it won't change. But my country is sitting on a prospective housing bubble right now (government debt is 35 % of GDP, private debt is 300+ % of GDP) and prices for most items (gas, food) are going up sharply. I don't care if short term I make a little less money, I just want to have enough things left in case of a hard crash to buy a house if prices go down sharply. | ||
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Elroi
Sweden5595 Posts
On October 05 2021 03:17 CuddlyCuteKitten wrote: I've re balanced, bought some gold (mining), no crypto (can't buy it from my vanilla ISK account, not going to bother), no peer-peer lending but I did manage to acquire an indoor chicken coop for my bathtub. :D One final question. When buying funds that have bonds in order to hedge does it matter if I buy them in my country or a fund that manages euro/US bonds? Like if the Swedish economy catches on fire, tips over and sinks in inflation, do I want my bonds in Swedish companies/governments or outside countries? Most outside funds deal in high risk bonds if I understand it correctly which seems counter productive to what I want. Also profit should go up if things go to shit at home, right? Also company or public bonds? The main point is to have something that does well if the other things don't so I imagine that I should be hoping that my stocks do well and that my gold/bonds do not but they are there just in case. You have all been really helpful btw. You can always buy crypto certificates on your vanilla ISK account - there are some other risks involved but it could probably be a good hedge. I have bought some "bitcoin zero" certificates on my ISK after the last crash to diversify a little bit more from my standard index funds  | ||
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RvB
Netherlands6209 Posts
On October 05 2021 03:17 CuddlyCuteKitten wrote: I've re balanced, bought some gold (mining), no crypto (can't buy it from my vanilla ISK account, not going to bother), no peer-peer lending but I did manage to acquire an indoor chicken coop for my bathtub. :D One final question. When buying funds that have bonds in order to hedge does it matter if I buy them in my country or a fund that manages euro/US bonds? Like if the Swedish economy catches on fire, tips over and sinks in inflation, do I want my bonds in Swedish companies/governments or outside countries? Most outside funds deal in high risk bonds if I understand it correctly which seems counter productive to what I want. Also profit should go up if things go to shit at home, right? Also company or public bonds? The main point is to have something that does well if the other things don't so I imagine that I should be hoping that my stocks do well and that my gold/bonds do not but they are there just in case. You have all been really helpful btw. Public bonds are the safest and you're better off diversifying so I'd buy foreign bonds as well. Short term bonds are generally safer than long term but also give less returns of course. Just Google government bond fund or something and you'll find some. | ||
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