[2020] A little stock market sense

[SmithOp]

I watched what the Chinese have done to invest internationally to invest money out of China prior to lockdowns. They were very smart to hedge their bets and place emergency money in another country.

At the time the USA required $1 million in a business to get a US Visas for their families. Some bought $1M condos as rental businesses and some bought businesses.

and some use those condos as landed baby birthing hotels.

 

[CalGalTraveler]

@WaikikiFirst everyone has different risk tolerance. It sound like you like to double down on the black 26 on the roulette table. Perhaps you are much younger and have years to recover. You do you.

My risk tolerance is different being close to retirement. I have been very successful at hedging bets across the table by using index funds and more recently moving gains to high rate CDs and bonds.

This market will fall down like a house of cards at some point due to several factors that I foresee. I will keep some invested in stocks as a hedge but I am moving gains off of the table to safety because we are close to retirement. High yield CDs and Bonds are part of that plan. International investing is another.

 

[SmithOp]

@WaikikiFirst everyone has different risk tolerance. It sound like you like to double down on the black 25 on the Roulette Table. You do you.

My risk tolerance is different and I have been very successful at hedging bets across the table by using index funds and more recently moving gains to high rate CDs and bonds.

This market will fall down like a house of cards at some point due to several factors that I foresee.

I like to sleep at night and now looking at the next step that works for my risk tolerance.

Care to share those factors? Which sectors are at the most risk? I wouldn't mind another dip to diversify some cash.

I've done very well in an energy sector ETF, picked up during the Covid dip.

Recently picked up dividend stocks like MO paying 8%.

My wife is risk averse, some of her 5+% CDs have been called in early, she is having to renew at 4+% now.

 

[emeryjre]

I am shortening my term on any interest sensitive products
Holding nothing beyond a two year maturity length

 

[WaikikiFirst]

sound like you like to double down on the black 25 on the Roulette Table. Perhaps you are much younger and have years to recover

you couldn't be more wrong. I'm almost 65. I retired twice, the 1st time being almost 25 yrs ago. I retired in my early 40s by having made a living of betting on WINNERS, not diworsifying. I retired in my early 40s having made a living in & around HEDGE funds. (old-school hedge funds who actually hedged)

Diworsifying is the worst way to HEDGE. People do it. I had some know-nothing recommend it to me recently. I simply said "It is time we stop talking now." People even applaud it. Diworsity is the knee-jerk reaction of people who don't know how to understand how winners win. Thanks Vanguard (I do own a couple of their index funds, but I wouldn't buy them simply to diworsify)

 

[CalGalTraveler]

I mainly focus on general total market and S&P 500 index funds and they have served us well.

But here are a few that are promising. YMMV.

AI will drive energy sector as it needs more juice to run AI models. With that said some utilities may not be great investments because of off-grid solar and wild-fire compliance regulations driving down profits.

NVidia will continue to be strong because they invested in an Open Source GenAI model that is very good - raising the bar for the for-profit GenAI players to compete. This strategy will drive more NVidia chips (which will drive more energy).

Duolingo and other foreign language learning stocks should do well as a segment of Americans seek to live overseas.

 

[CalGalTraveler]

you couldn't be more wrong. I'm almost 65. I retired twice, the 1st time being almost 25 yrs ago. I retired in my early 40s by having made a living of betting on WINNERS, not diworsifying. I retired in my early 40s having made a living in & around HEDGE funds. (old-school hedge funds who actually hedged)

Diworsifying is the worst way to HEDGE. People do it. I had some know-nothing recommend it to me recently. I simply said "It is time we stop talking now." People even applaud it. Diworsity is the knee-jerk reaction of people who don't know how to understand how winners win. Thanks Vanguard (I do own a couple of their index funds, but I wouldn't buy them simply to diworsify)

Perhaps you know some fancier ways to analyze and are willing to spend time to research.

I am not a financial pro and would rather spend my time elsewhere than investigating individual stocks. We have been successful with simpler Index strategies. Perhaps we left some on the table? Perhaps not. But I don't care to spend too much time researching the stock market.

We also have angel investments and that is the high risk/high reward element in our portfolio. For those we expect to hold for at least 5 years and eventually exit and avoid capital gains taxes entirely because these are classified as IRS Section 1202 Small Businesses.

 

[WaikikiFirst]

a few words to the curious:
You can hedge SYSTEMIC risk. You can hedge SPECIFIC risk.
Much of what people here call hedging really doesn't do either well. It is really nothing more than MARKET-TIMING. glwt

 

[WaikikiFirst]

would rather spend my time elsewhere than investigating individual stocks.

you just recommended people buy NVDA and Duolingo. 1 foot in & 1 foot out is a tough way to travel.

 

[CalGalTraveler]

you just recommended people buy NVDA and Duolingo. 1 foot in & 1 foot out is a tough way to travel.

That doesn't mean one can't make a few side bets...the bulk of our portfolio is in index.

 

[RENTER]

I do not understand all the arguing. Everyone has good and valid points. One must decide for themselves what works best for them.

 

[Brett]

I keep 5 - 10% in fine wine. But then I drink it. DOH!

Diworsity is the knee-jerk reaction of people who don't know how to understand how winners win

Loos like the recent stock market rally "winners" are Tesla, Crypto (coinbase, etc), small caps, banks and private prisons

"private prison companies CoreCivic and Geo Group—which are Immigration and Customs Enforcement contractors—are up 76% and 75%"

https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html

 

[PigsDad]

Loos like the recent stock market rally "winners" are Tesla, Crypto (coinbase, etc), small caps, banks and private prisons

"private prison companies CoreCivic and Geo Group—which are Immigration and Customs Enforcement contractors—are up 76% and 75%"


View attachment 101888
https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html

I used to own Geo Group for many years; I guess I should have bought it again before the election. It was a very good dividend stock back in the day and I did well with it, but it was just in my "f-around" account; didn't really move the needle much overall.

Kurt

 

[PigsDad]

I keep 5 - 10% in fine wine. But then I drink it. DOH!

Diworsity is the knee-jerk reaction of people who don't know how to understand how winners win

Thank you so much for sharing your expert knowledge to us knuckle-draggers who just invest across the board. It is very helpful, but I'm doing just fine in my early retirement -- spending like a drunk monkey and still having our portfolio grow. But if I'm ever on skid row, I'll know it is because I didn't listen to your fantastic advice! Please, please, please keep it coming!

 

[Elan]

I do not understand all the arguing. Everyone has good and valid points. One must decide for themselves what works best for them.

Exactly. I've got decades of experience with all kinds of options strategies, investing, swing trading, day trading, etc. Now that I'm retired, I mostly just dabble. I use TA effectively, even though some here are apparently not able to do so. Some mornings I scalp a couple hundred dollars and call it good -- if I feel like doing any trading at all, that is. My exposure is always pretty minimal. I don't need massive gains to accommodate my lifestyle and I sleep pretty well at night. To each their own.

 

[WaikikiFirst]

sharing your expert knowledge to us knuckle-draggers who just invest across the board

That is exactly what knuckle-draggers should do. Stick to your knitting. How many famous investors have you heard that from? Ignoring such advice was the first bad idea CalGal came up with today, topped with some bad assumptions / paradigms.

 

[WaikikiFirst]

I do not understand all the arguing. Everyone has good and valid points. One must decide for themselves what works best for them.

should we discuss the "N" invalid points? N > or = 3. Not knowing the difference between the two is what makes the world go round I guess.

 

[RENTER]

you couldn't be more wrong. I'm almost 65. I retired twice, the 1st time being almost 25 yrs ago. I retired in my early 40s by having made a living of betting on WINNERS, not diworsifying. I retired in my early 40s having made a living in & around HEDGE funds. (old-school hedge funds who actually hedged)

Diworsifying is the worst way to HEDGE. People do it. I had some know-nothing recommend it to me recently. I simply said "It is time we stop talking now." People even applaud it. Diworsity is the knee-jerk reaction of people who don't know how to understand how winners win. Thanks Vanguard (I do own a couple of their index funds, but I wouldn't buy them simply to diworsify)

Winners are those who understand their limitations of time to research but still can make money in the stock market without getting wiped out so they can retire and live comfortably. If that means leaving some money off the table, so be it.

Jerks are those who mock them.

 

[CalGalTraveler]

That is exactly what knuckle-draggers should do. Stick to your knitting. How many famous investors have you heard that from? Ignoring such advice was the first bad idea CalGal came up with today, topped with some bad assumptions / paradigms.

I do not care about famous investors. Most are too busy shilling their scam methodology to enrich their own returns.

The only portfolio that matters is ours.

This is not rocket science. Some choose to make this more difficult than it needs to be. Buy low sell high. Harvest some gains off of the table when markets are high and convert to safer investments to compound returns over the years. We have made some good angel investments in Silicon Valley including one that had as successful IPO exit and a few other successful exits. However we are smart and humble enough to know, just like the VCs that only 1 in 10 will be a unicorn and 4 in 10 will be base plays and the other half will lose so we don't make those investments lightly. As we age I prefer to move those gains to safer investments and leverage the power of compounding.

We can retire comfortably if we want, travel and do what we want. By many measures that what differentiates a successful investor from a gambler.

So please stop preaching to others on how they should approach their portfolio. There is no one right way to be successful in investing.

 

[MULTIZ321]

These Closed-End Funds Pay $1,000 A Month On Every $100K Invested​

These Closed-End Funds Pay $1,000 A Month On Every $100K Invested

Some closed-end funds (CEFs) are currently yielding 12%, meaning you’ll get $1,000 per month for every $100,000 you invest.

www.forbes.com

Richard

 

[WaikikiFirst]

So please stop preaching to others on how they should approach their portfolio. There is no one right way to be successful in investing.

Preaching to others? LMAO. You're the one who came here saying it was a good time to sell the USA and trade into Europe, while basically admitting that you have no idea what to do in Europe. And the reason? You have some paranoia about the US govt.
Yeah, all that.

The thing you're talking about doing would almost get FINRA to penalize a FA (RIA) if they pushed it on you and definitely get a penalty if one of them did it in your account without loads & loads of warnings.

 

[WaikikiFirst]

I do not care about famous investors.

Well, the ones who actually DO preach here all care about famous investors. Should we name the half-dozen people who preach nothing but "Buy the broad index and just hold forever". Lessee, Buffett, Bogle, etc etc etc all preach the same thing.

I will say, if you think you should sell the USA and buy Europe, then, nope, you don't care about famous investors, because none of them have done that without soon saying "DOH! That was dumb!" since ... idk ... the 1920s.

 

[easyrider]

Many fund managers and financial advisors are talking about this melt up. The interesting thing about a melt up is how fast they melt down.

Bill

 

[WaikikiFirst]

If that means leaving some money off the table, so be it.

The best thing you've ever said on this thread. I guess you still don't want to discuss the "N" invalid things CalGal said & implied, where "N" > or = 3.

 

[WaikikiFirst]

interesting thing about a melt up is how fast they melt down

stocks take the stairs up & the elevator down. Calling this a "melt-up" is just another example of how people love to let their cutesy rhetoric outrun the facts.
Yes, the market is going up, too quickly probably. Yes, it will be lower than this in the future. How much lower and when? Place your bets!
I focus on companies, not "the market", so ... have at it.