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[2020] A little stock market sense

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For those foaming at the mouth about "record highs" of the stock market averages, the Dow 30 close today is slightly less than a 4% annualized gain (including dividends) from its December 31, 2021 close of 36404.89.

My Platinum Relationship Savings Account at Wells Fargo is currently offering 5.01% APR -- FDIC insured with no risk of loss.
and what did your savings account earn between 2009 and 2022? I earn more than that on short term treasuries and when they cut interest rates, I will have capital gains as the price of treasuries go up while the interest on your savings drops. Also did you forget about the Nasdaq and S&P 500? Oh, by the way, I pay no state taxes on the treasuries I have.
 

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If you are well diversified and believe in the 4% rule or close to it, there is no reason to sell during a crash. A well-diversified portfolio should look like a Christmas tree. Green and Red. Rebalance by selling the green and buying the red. It will trail the bulls and beat the bears.

I take so much grief from people because I grow slowly during bull rallies. But I enjoy getting my revenge during market down turns when I post pictures showing my portfolio still growing while others are crying.

I remember many of the corporate experts ignoring me when I told them to diversify in 1999. They blew me off and said they were. Yeah, they were. They all had the 7 baby bells after Ma Bell was broken up and were wiped out.
 

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If you are well diversified and believe in the 4% rule or close to it, there is no reason to sell during a crash. A well-diversified portfolio should look like a Christmas tree. Green and Red. Rebalance by selling the green and buying the red. It will trail the bulls and beat the bears.

I take so much grief from people because I grow slowly during bull rallies. But I enjoy getting my revenge during market down turns when I post pictures showing my portfolio still growing while others are crying.

I remember many of the corporate experts ignoring me when I told them to diversify in 1999. They blew me off and said they were. Yeah, they were. They all had the 7 baby bells after Ma Bell was broken up and were wiped out.

I really didn't make much doing the buy and hold. I do know many that were doing the buy and hold that got screwed right at retirement time that had to go back to work in the 2007-08 down turn.

I would say you are doing something right more than just buy and hold. I know many that have done well with buy and hold but they occasionally sell and take profits. What do you do ?

Bill
 

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and what did your savings account earn between 2009 and 2022?
Reading comprehension is not your strong suite. Where in anything I have ever posted was there a suggestion of money in a savings account from 2009 to 2022? Re-read my post #702 again, maybe a few times. It is simply a counterpoint to all the "new-all-time highs" hyped in the mainstream media and repeated on TUG.

The point of my post is that the "new" highs are not much different from the "old new-highs" in late 2021, and the current "new-all-time" highs just represent a flat stock market from late 2021 to now.

There is typically a "summer stock market rally." Maybe these recent gains might eventually turn into meaningful stock market gains and be something worth reporting.
 

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I really didn't make much doing the buy and hold. I do know many that were doing the buy and hold that got screwed right at retirement time that had to go back to work in the 2007-08 down turn.

I would say you are doing something right more than just buy and hold. I know many that have done well with buy and hold but they occasionally sell and take profits. What do you do ?

Bill
I am somewhere in the middle. I am basically buy and hold but I do not let the profits build up. I take them at 10%. I keep an equal amount in each investment. So I trim the top and buy the bottom.

So I am not fully 100% buy and hold but I am also not a day trader.
 

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Reading comprehension is not your strong suite. Where in anything I have ever posted was there a suggestion of money in a savings account from 2009 to 2022? Re-read my post #702 again, maybe a few times. It is simply a counterpoint to all the "new-all-time highs" hyped in the mainstream media and repeated on TUG.

The point of my post is that the "new" highs are not much different from the "old new-highs" in late 2021, and the current "new-all-time" highs just represent a flat stock market from late 2021 to now.

There is typically a "summer stock market rally." Maybe these recent gains might eventually turn into meaningful stock market gains and be something worth reporting.
you were bragging about your savings account rate. People I know who have never had success with the stock market are wanting to get out and go into those savings accounts. They were burnt in 2009, when they did that and a week later the market turned and went on a rally from 2009 to 2020.

The market is up 70% of the time. Up 2 out of every 3 years. Better odds than a lottery, a casino and sports betting. If someone is just living off their dividends or have money they do not need for several years not in the market but in short term treasury ETF's, they are better staying in the market rather than go into a savings account.

Off course a short term treasury ETF is not 100% that the price will remain stable and it is not FDIC insured. Its share price may drop a few cents. Whoopie Do. The Capital Gains I will get when interest rates drop will offset that while the interest rates on those savings accounts drop.
 
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Reading comprehension is not your strong suite. Where in anything I have ever posted was there a suggestion of money in a savings account from 2009 to 2022? Re-read my post #702 again, maybe a few times. It is simply a counterpoint to all the "new-all-time highs" hyped in the mainstream media and repeated on TUG.

The point of my post is that the "new" highs are not much different from the "old new-highs" in late 2021, and the current "new-all-time" highs just represent a flat stock market from late 2021 to now.

There is typically a "summer stock market rally." Maybe these recent gains might eventually turn into meaningful stock market gains and be something worth reporting.
One more point. Yes you are right, it is not much different then late 2021. But not is not correct when you consider people who have dollar cost average or reinvested their dividends since then. What is the return on that money since then?

By the way, I do not reinvest my dividends when they are distributed. Usually, it is the end of the year and the market is high. I take them in cash and then I reinvest them into the investments I want which are the one's whose market value is on the bottom of my list. Thus I am selling high and buying low. My treasury ETF's dividends come monthly.

Many do not realize when they reinvest at the end of the year they are usually buying high,
 

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Reading comprehension is not your strong suite. Where in anything I have ever posted was there a suggestion of money in a savings account from 2009 to 2022? Re-read my post #702 again, maybe a few times. It is simply a counterpoint to all the "new-all-time highs" hyped in the mainstream media and repeated on TUG.

The point of my post is that the "new" highs are not much different from the "old new-highs" in late 2021, and the current "new-all-time" highs just represent a flat stock market from late 2021 to now.

There is typically a "summer stock market rally." Maybe these recent gains might eventually turn into meaningful stock market gains and be something worth reporting.
When my husband died, close to two years ago, equities got moved to his trust with date of death as cost basis, the account is up about 80% in two years. So how could the stock market be flat?
 

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When my husband died, close to two years ago, equities got moved to his trust with date of death as cost basis, the account is up about 80% in two years. So how could the stock market be flat?

It's not flat. Pretty much all asset prices have increased or are inflated.

Bill
 

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When my husband died, close to two years ago, equities got moved to his trust with date of death as cost basis, the account is up about 80% in two years.
You can thank good stock market timing for that excellent return.

So how could the stock market be flat?
Read post #702 to understand how the new "all-time-highs!" are about the same level as the "all-time-highs" in December, 2021.
 

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When my husband died, close to two years ago, equities got moved to his trust with date of death as cost basis, the account is up about 80% in two years. So how could the stock market be flat?


Some would say the stock market in the past two years has not been "flat". (but not 80% returns!)
Did your husband invest in tech stocks?
 

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When my husband died, close to two years ago, equities got moved to his trust with date of death as cost basis, the account is up about 80% in two years. So how could the stock market be flat?
It all depends on when you got in and what you are invested in. The market had dropped late spring 2022 which is why it is flat from 2021 as he said. But it then rallied mainly because of 7 tech stocks. If you are up 80%, I would be concerned that you are too heavily invested in those 7 techs stocks and be aware that anytime they can crash. Look at what happen to Cisco in the dot.com crash.
 

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It all depends on when you got in and what you are invested in. The market had dropped late spring 2022 which is why it is flat from 2021 as he said. But it then rallied mainly because of 7 tech stocks. If you are up 80%, I would be concerned that you are too heavily invested in those 7 techs stocks and be aware that anytime they can crash. Look at what happen to Cisco in the dot.com crash.
Nope
 

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Some would say the stock market in the past two years has not been "flat". (but not 80% returns!)
Did your husband invest in tech stocks?
Not Avery high proportion of tech,band I did the investing.
 

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Then you are comparing apples to oranges. He was talking about the overall stock market and he is correct since 2021. What you are doing is not the overall stock market. The rest of us can only guess. If it was not tech stocks then maybe it was on one of those meme stocks and you were smart enough to get out early before others were wiped out. But whatever it is, it is something I would not do. I do not put all my eggs in one basket. I spread it out and I will never get 80% returns and I can live with that.
 

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Then you are comparing apples to oranges. He was talking about the overall stock market and he is correct since 2021. What you are doing is not the overall stock market. The rest of us can only guess. If it was not tech stocks then maybe it was on one of those meme stocks and you were smart enough to get out early before others were wiped out. But whatever it is, it is something I would not do. I do not put all my eggs in one basket. I spread it out and I will never get 80% returns and I can live with that.
Some very erroneous assumptions. My eggs are not in one basket. There are other stocks beside tech that have gone up in past two years. All the stocks have been held a long time, so I don’t think they are risky, unless you think diabetes and obesity are going away. I do have tech in that portfolio, but bought during the Dip after 9/11 It is about 15% of that portfolio. And I have other portfolios, one is entirely in bonds. They haven’t gone up as much, but most others have gone up . One stock I own has gone up tremendously in last five years, but I originally bought it in 1986. I don’t fool around with trying to take big risks.
one stock has been in family since the 1940’s, when my husbands father was the comptroller.
 

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Some very erroneous assumptions. My eggs are not in one basket. There are other stocks beside tech that have gone up in past two years. All the stocks have been held a long time, so I don’t think they are risky, unless you think diabetes and obesity are going away. I do have tech in that portfolio, but bought during the Dip after 9/11 It is about 15% of that portfolio. And I have other portfolios, one is entirely in bonds. They haven’t gone up as much, but most others have gone up . One stock I own has gone up tremendously in last five years, but I originally bought it in 1986. I don’t fool around with trying to take big risks.
one stock has been in family since the 1940’s, when my husbands father was the comptroller.
Yes you are correct. other stocks like Eli Lilly went up. But the assumption was made because he was talking about the whole stock market not just one stock. The whole stock market did not go up 80% in 2 years which is why I assumed you had all your eggs in one basket or sector.

The DOW is up 22%, The 500 is up 35% and the Nasdaq is up 54% in the past 2 years. So, to get 80% in 2 years, it was reasonable to assume that you had all your eggs in one basket. That is because the 500 and the Nasdaq are closed to your 80% with tech being the sector they are invested in the most with the magnificent seven being the top holdings.

You said that you were not heavily invested in tech so it was reasonable once again to assume you had all your eggs in one basket.

But if you go back to Dec 31 2021 where he started from, the Dow is up 6.87%, the 500 is up 12.7% and the Nasdaq is up 14%. The bear market in 2022, the bank failures in the spring of 2023 and the downturn in October 2023 pulled down the percentages.
 

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Yes you are correct. other stocks like Eli Lilly went up. But the assumption was made because he was talking about the whole stock market not just one stock. The whole stock market did not go up 80% in 2 years which is why I assumed you had all your eggs in one basket or sector.

The DOW is up 22%, The 500 is up 35% and the Nasdaq is up 54% in the past 2 years. So, to get 80% in 2 years, it was reasonable to assume that you had all your eggs in one basket. That is because the 500 and the Nasdaq are closed to your 80% with tech being the sector they are invested in the most with the magnificent seven being the top holdings.

You said that you were not heavily invested in tech so it was reasonable once again to assume you had all your eggs in one basket.

But if you go back to Dec 31 2021 where he started from, the Dow is up 6.87%, the 500 is up 12.7% and the Nasdaq is up 14%. The bear market in 2022, the bank failures in the spring of 2023 and the downturn in October 2023 pulled down the percentages.
One thing I did two years ago was pull out of mutual funds using the opportunity of the new cost basis because of the capital gain distributions, which were screwing up my taxes.
 

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What are the top seven tech stocks? I haven’t invested in individual stocks for a long time. I do have individual stocks, but I bet I have held all over twenty years.
 

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Yes you are correct. other stocks like Eli Lilly went up. But the assumption was made because he was talking about the whole stock market not just one stock. The whole stock market did not go up 80% in 2 years which is why I assumed you had all your eggs in one basket or sector.

The DOW is up 22%, The 500 is up 35% and the Nasdaq is up 54% in the past 2 years. So, to get 80% in 2 years, it was reasonable to assume that you had all your eggs in one basket. That is because the 500 and the Nasdaq are closed to your 80% with tech being the sector they are invested in the most with the magnificent seven being the top holdings.

You said that you were not heavily invested in tech so it was reasonable once again to assume you had all your eggs in one basket.

But if you go back to Dec 31 2021 where he started from, the Dow is up 6.87%, the 500 is up 12.7% and the Nasdaq is up 14%. The bear market in 2022, the bank failures in the spring of 2023 and the downturn in October 2023 pulled down the percentages.
Do these numbers include dividends?
 

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One thing I did two years ago was pull out of mutual funds using the opportunity of the new cost basis because of the capital gain distributions, which were screwing up my taxes.
that was a good move.
 

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One thing I did two years ago was pull out of mutual funds using the opportunity of the new cost basis because of the capital gain distributions, which were screwing up my taxes.
I had a heated argument awhile back on the Wyndham page. I had mentioned how I refused to put money into a 401K plans so I can get match money. There were crappy choices of mutual funds I did not want. The same holds true for many people. Only a few people have 401K plans where they can choose anything they want.

So instead I chose a Roth IRA and my own non-IRA account where I can harvest tax losses. Where I will not have a RMD and my withdrawals will not be treated as ordinary income.

People think I am crazy. But when they are crying when their 401K is crashing, I am making money because I have choices they do not have. A few weeks ago, the market was down 386. I was up 0.21%.
 

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Yesterday was a good example why I do not want to do a 401K. Yesterday around noon, the market was down 0.56%. I was up 1.06%. MOST people in a 401K cannot do what I do which more than makes up for the match. Especially when you consider the taxes down the road.

Unf. most people cannot afford to do both a 401K and a non-retirement account. So they go for the 401K because it is is easier for them to have it taken out of their paychecks.
 

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If you are zigging when ‘the market’ is zagging then you are making an active bet to deviate from market weights - either from global stock/bond weightings, or away from total stock or total international to some kind of sector bet, market timing, individual stocks, individual bonds, etc. That’s not a bet I want to make long term. I do not think I’m smarter than the markets. I’ll take market returns and I reached financial independence that way.

Many 401k (and 403b, and 401a, and TSP) plans have great options. I don’t need to be able to ‘choose anything.’ If there is a very low cost total stock, total bond, and/or total international stock fund, I can make the rest work for my total portfolio.

If you are turning down 401k space (which has a 2024 maximum limit of $69,000) to invest in an IRA (max limit of $7000) you are giving up a lot of tax-advantage which is likely a mistake if you are in a higher income tax bracket. I don’t need to do that because my 403b has all I need: TSM, TISM, and TBM funds charging between 2 and 5 basis points each. I round out my portfolio using backdoor Roths, HSAs, TIPS, I-bonds, and taxable investing in tax-efficient, very low cost, passive index funds in TSM, TISM, and tax-free muni bond funds.
 
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