[2020] A little stock market sense

[PigsDad]

Warren's investments could loose 50% of their value and he would still be in the top 5 of wealthiest people in the USA. When everyday people are older and loose 50% value of their investments they would need to play the long run scenario which is proven to work if there is enough time. So if you have more time than money it makes sense to stay invested, imo. If you have more money than time it might not, imo.

Yes, as one gets older it is probably a good plan to be more conservative in your investments, but not sure why any of that pertained to the question about going against Warren's advice. And what does Warren's age have to do with whether or not his investing advice is sound? Very confusing.

Now, if you think moving investments to Gold or other commodities are considered "safer" (as you seemed to indicate in your earlier post, unless I was reading it wrong), well then I strongly disagree.

Kurt

 

[easyrider]

Yes, as one gets older it is probably a good plan to be more conservative in your investments, but not sure why any of that pertained to the question about going against Warren's advice. And what does Warren's age have to do with whether or not his investing advice is sound? Very confusing.

Now, if you think moving investments to Gold or other commodities are considered "safer" (as you seemed to indicate in your earlier post, unless I was reading it wrong), well then I strongly disagree.

Kurt

Warren is in it for the long run and if he lost half his portfolio value it wouldn't change his lifestyle. Most investors would have to make changes in their lifestyle if they loose even 10% of their portfolio value at retirement age.

Precious metals are safer but they are not an investment. I wonder why you think they are.

Bill

 

[PigsDad]

Warren is in it for the long run and if he lost half his portfolio value it wouldn't change his lifestyle.

Warren invests for his fund, not himself. He is well aware that the buyers of his fund are his customers -- do you honestly believe he would be ok with his fund dropping 50%? He would be perfectly fine taking a hit like that for his personal investments, but his personal situation does not drive his investment decisions for his fund. I wonder why you would think that.

Most investors would have to make changes in their lifestyle if they loose even 10% of their portfolio value at retirement age.

Certainly, like I said earlier, of course everyone should change their investment mix as they get closer to retirement. But again, what does that have anything to do with Warren's current market advice? Do you think that I was saying everyone should invest 100% of their investments in the market or even in his fund? His advice is not appropriate for an overall retiree's portfolio -- what I was saying (going back to my original post that you replied to) is that I don't know many people who have gotten rich going against his market advice.

Hopefully, that is a little more clear.

Kurt

 

[easyrider]

Warren invests for his fund, not himself. He is well aware that the buyers of his fund are his customers -- do you honestly believe he would be ok with his fund dropping 50%? He would be perfectly fine taking a hit like that for his personal investments, but his personal situation does not drive his investment decisions for his fund. I wonder why you would think that.


Certainly, like I said earlier, of course everyone should change their investment mix as they get closer to retirement. But again, what does that have anything to do with Warren's current market advice? Do you think that I was saying everyone should invest 100% of their investments in the market or even in his fund? Again, very confused.

Kurt

I said Warren could loose half his portfolio and still be rich. Do you think otherwise ? I never even implied all of the silly things you are posting.

Warren's market advice from your linked articles basically says to ride it out. What do you think the article says ?

Bill

 

[PigsDad]

I said Warren could loose half his portfolio and still be rich. Do you think otherwise ? I never even implied all of the silly things you are posting.

So why, when replying to my remark about how I think going against Warren's advice is a bad idea, did you reply with:

"Warren's investments could loose 50% of their value and he would still be in the top 5 of wealthiest people in the USA. When everyday people are older and loose 50% value of their investments they would need to play the long run scenario which is proven to work if there is enough time."​

What did that statement have to do with going against Warren's advice? Or did you just purposefully take a left turn in the conversation to throw people off?

Ok, I give up, you win (whatever point you think you were trying to make). Continuing this line of thought is pointless to me.

Kurt

 

[easyrider]

So why, when replying to my remark about how I think going against Warren's advice is a bad idea, did you reply with:

"Warren's investments could loose 50% of their value and he would still be in the top 5 of wealthiest people in the USA. When everyday people are older and loose 50% value of their investments they would need to play the long run scenario which is proven to work if there is enough time."​

What did that statement have to do with going against Warren's advice? Or did you just purposefully take a left turn in the conversation to throw people off?



Kurt

Do you really think Warren's advice applies to everyone ? I don't. At some point a person should adjust to a lower risk portfolio, imo. The number I used is just random to illustrate that Warren is not an average person with average wealth and that a person like him can afford to loose a good portion of his portfolio where an every day man can't. I thought this point was obvious.

Bill

 

[PigsDad]

Do you really think Warren's advice applies to everyone ?

Please point out where I said that Warren's advice applies to everyone.

Please, I'll wait.

Kurt

 

[easyrider]

Please point out where I said that Warren's advice applies to everyone.

Please, I'll wait.

Kurt

You will be waiting forever.

Bill

 

[PigsDad]

You will be waiting forever.

That's what I thought. Just another one of your nonsense posts.

Kurt

 

[easyrider]

That's what I thought. Just another one of your nonsense posts.

Kurt

Boy oh boy, you certainly waited a long time to get that off your chest. If you didn't want to talk about Warren why did you post the link ? Is it that the recent escalation of hostilities with Russia and China, along with a historically large world debt bubble have you worried about your paper investments ? Don't worry, just keep doing what Warren and Charlie do and things will be fine if your on that path already.

Bill

 

[PigsDad]

Boy oh boy, you certainly waited a long time to get that off your chest.

You were actually waiting for me to reply? Sorry to disappoint, I have a life outside of this board, but thanks for the laugh! Now go back to promoting some wackadoodle conspiracy theory over on the Covid forum -- at least there you provide some entertainment.

Kurt

 

[easyrider]

I have a life outside of this board

So do I but is only 8 degrees out.

Bill

 

[easyrider]

Interesting is some investors watch market patterns and notice that some of the signals in market movement repeat. One pattern is the 55 day rule to predict market downturns. While this doesn't always predict the exact date of a down turn a couple notable down turns have been at the 55 day mark or with in the 55 day mark of a market high. Tomorrow is one of those days that is exactly 55 days out from a market high on Jan 4 meaning Feb 28 is 55 days.

https://www.marketwatch.com/story/h...tock-market-amid-ukraine-invasion-01645716759

Market Insight: The 55-day rule
Most people don’t realize that the Crash of 1929 and the Crash of 1987 both occurred exactly 55 calendar days after the stock market had topped. All prices in this article are closing prices on the day being referenced.

1929: The peak in the Dow Jones Industrial Average DJIA, +2.51% was reached on Sept. 3, when it closed at 381.17, and 55 calendar days after Sept. 3 was (Monday)
Oct. 28. That was the exact date of the Crash of 1929, with the Dow down 40.58 points, or 13.5%.

1987: The Dow topped out at 2722.42 on Aug. 25, and 55 calendar days later was (Monday) Oct. 19 when the Dow collapsed 507.99 points, or 22.6% in one day!
This year, the Dow topped out on Jan. 4. And 55 days later is Monday (!) Feb. 28.

In both 1929 and 1987, there was a sharp market decline in the week preceding the Crash, so that is something else to watch for. These Crashes just didn’t appear out of thin air.

 

[PigsDad]

What a wild ride the last several days, right?!?

Kurt

 

[Brett]

What a wild ride the last several days, right?!?

Kurt

right, there's volatility in the stock market.
I'm just riding it out. Got plenty in fixed income - bonds, CD's, etc

 

[bogey21]

Back when I ran a large S&L we had one branch in an area populated with super Seniors (ages 75-90). At the time they all lived off their CD portfolios which at the time paid between 6% and 7½%. I've always wondered how they managed during the last 5-10 years or so...

George

 

[TravelTime]

I started investing our excess cash in a new account with Fidelity called the tax managed account (TMA). The goal is to match the market returns while producing tax harvesting “losses” to offset income. I was skeptical about this but it seems to work. The “losses” are called tax harvesting and they are paper losses from the way Fidelity trades in the account. Before we had this excess cash in mutual funds and we were paying taxes on earnings within the mutual funds even though we never sold any. In the last 4 months of 2021 (when we started this strategy), the tax harvesting came out to $26,000. That is a huge tax savings for us in just 4 months. I just moved a bunch more of our cash funds into the TMA. I am guessing the tax harvesting will be about $100,000 this year and the account with grow or recede depending on how the market does. But this is exactly what would have happened with the mutual funds but we would have paid taxes on sales vs having tax harvesting on sales.

 

[Brett]

I started investing our excess cash in a new account with Fidelity called the tax managed account (TMA). The goal is to match the market returns while producing tax harvesting “losses” to offset income. I was skeptical about this but it seems to work. The “losses” are called tax harvesting and they are paper losses from the way Fidelity trades in the account. Before we had this excess cash in mutual funds and we were paying taxes on earnings within the mutual funds even though we never sold any. In the last 4 months of 2021 (when we started this strategy), the tax harvesting came out to $26,000. That is a huge tax savings for us in just 4 months. I just moved a bunch more of our cash funds into the TMA. I am guessing the tax harvesting will be about $100,000 this year and the account with grow or recede depending on how the market does. But this is exactly what would have happened with the mutual funds but we would have paid taxes on sales vs having tax harvesting on sales.

I'm skeptical of a mutual fund that is primarily for "tax loss harvesting" -- passive index funds are already tax efficient (if you don't sell)

 

[TravelTime]

I'm skeptical of a mutual fund that is primarily for "tax loss harvesting" -- passive index funds are already tax efficient (if you don't sell)

Well, I will see how it does over time. The goal is not only to be tax efficient. The goal is to trade in such a way as to generate tax loss harvesting to have losses to deduct against income. In the past, even with tax efficient mutual funds, we were paying taxes on the trades within the mutual funds. That amounted to tens of thousands of dollars every year that we had to record as income even though we never sold any mutual funds. These mutual funds were investments outside of our retirement accounts.

The new account is more like a tax efficient ETF. It is called a tax managed US equity index fund. All the stocks are outside of mutual funds but it acts like an index fund or tax efficient ETF that matches the market plus generating tax loss harvesting. I had never heard of this until my financial adviser told me. The fee is lower than we were paying on mutual funds. Maybe it will not be great but it is worth a year or two to see. If it ends up losing against the market, I will consider a tax efficient ETF. For investments outside of retirement funds, ETFs are more tax efficient than mutual funds.

ETF vs. Mutual Fund: What's the Difference?

Mutual funds and ETFs both hold portfolios of stocks, bonds, or other investments, but there are differences between the two investment vehicles.

www.investopedia.com

Separately Managed Accounts | U.S. Large Cap Index Strategy | Fidelity

Fidelity U.S. Large Cap Index Strategy is a separately managed account (SMA) that seeks to pursue the long-term growth potential of US large-cap stocks and deliver enhanced after-tax returns.

www.fidelity.com

 

[PigsDad]

Well, I will see how it does over time. The goal is not only to be tax efficient. The goal is to trade in such a way as to generate tax loss harvesting to have losses to deduct against income. In the past, even with tax efficient mutual funds, we were paying taxes on the trades within the mutual funds. That amounted to tens of thousands of dollars every year that we had to record as income even though we never sold any mutual funds. These mutual funds were investments outside of our retirement accounts.

The new account is more like a tax efficient ETF. It is called a tax managed US equity index fund. All the stocks are outside of mutual funds but it acts like an index fund or tax efficient ETF that matches the market plus generating tax loss harvesting. I had never heard of this until my financial adviser told me. The fee is lower than we were paying on mutual funds. Maybe it will not be great but it is worth a year or two to see. If it ends up losing against the market, I will consider a tax efficient ETF. For investments outside of retirement funds, ETFs are more tax efficient than mutual funds.

ETF vs. Mutual Fund: What's the Difference?

Mutual funds and ETFs both hold portfolios of stocks, bonds, or other investments, but there are differences between the two investment vehicles.

www.investopedia.com

Separately Managed Accounts | U.S. Large Cap Index Strategy | Fidelity

Fidelity U.S. Large Cap Index Strategy is a separately managed account (SMA) that seeks to pursue the long-term growth potential of US large-cap stocks and deliver enhanced after-tax returns.

www.fidelity.com

It does look interesting. So effectively it is creating tax losses while you own it (resulting in lowered cost basis), but you would realize the normal gains, plus the gains you got over the course of owning it that produced those losses, when it comes time to sell it. Then those gains will be long-term gains, and if you never sold it and passed it on to heirs, the basis would be reset which would be a big windfall for the beneficiary.

Kurt

 

[pedro47]

Well, I will see how it does over time. The goal is not only to be tax efficient. The goal is to trade in such a way as to generate tax loss harvesting to have losses to deduct against income. In the past, even with tax efficient mutual funds, we were paying taxes on the trades within the mutual funds. That amounted to tens of thousands of dollars every year that we had to record as income even though we never sold any mutual funds. These mutual funds were investments outside of our retirement accounts.

The new account is more like a tax efficient ETF. It is called a tax managed US equity index fund. All the stocks are outside of mutual funds but it acts like an index fund or tax efficient ETF that matches the market plus generating tax loss harvesting. I had never heard of this until my financial adviser told me. The fee is lower than we were paying on mutual funds. Maybe it will not be great but it is worth a year or two to see. If it ends up losing against the market, I will consider a tax efficient ETF. For investments outside of retirement funds, ETFs are more tax efficient than mutual funds.

ETF vs. Mutual Fund: What's the Difference?

Mutual funds and ETFs both hold portfolios of stocks, bonds, or other investments, but there are differences between the two investment vehicles.

www.investopedia.com

Separately Managed Accounts | U.S. Large Cap Index Strategy | Fidelity

Fidelity U.S. Large Cap Index Strategy is a separately managed account (SMA) that seeks to pursue the long-term growth potential of US large-cap stocks and deliver enhanced after-tax returns.

www.fidelity.com

Thanks for sharing your information. I totally understand what you are saying.

 

[CO skier]

The Nasdaq 100 index closed in bear market territory today (down 20% from the peak in November), and erasing all the gains made in 2021.

 

[Ralph Sir Edward]

The Nasdaq 100 index closed in bear market territory today (down 20% from the peak in November), and erasing all the gains made in 2021.

My short NASDAQ 100 ETF is looking fine. . .

 

[CO skier]

My short NASDAQ 100 ETF is looking fine. . .

The 2X Inverse ETF (QID) has been a wild ride. When QQQ bounces 10 points off the lowest intra-day level, I will close out my QID position (for a fine gain in a down market), because it does not count until a position is sold.

 

[CO skier]

I don't know where an absolute bottom will be but I just buy on larger dips. I feel like there will be more dips coming, hence the "opportunity awaits" comment. Of course, I could be wrong, who knows? Not very confusing to me, at least.

Kurt

If you feel "more dips are coming" why are you (did you) buying now? That is what is confusing.