Investment Strategies

[Zander]

Want to become an investor? Go here......Bogleheads

Read it, apply it, benefit.

Trading is for gamblers, dummies, and people that already have lots of money. 26 year old people need to stay fully invested at all times.

 

[Wake]

I'm grateful for the help. At 26, I want to keep funneling money into wise investment, and start up a 401K or and IRA. Not sure which one it is that you can start right away that compounds by 6% biannually. Whichever one it is, I've got at least $1500 right now to put in it and let sit for 40 years. Problem is if something catastrophic happens while the money's locked up. Yikes.

 

[Flopper]

I'm grateful for the help. At 26, I want to keep funneling money into wise investment, and start up a 401K or and IRA. Not sure which one it is that you can start right away that compounds by 6% biannually. Whichever one it is, I've got at least $1500 right now to put in it and let sit for 40 years. Problem is if something catastrophic happens while the money's locked up. Yikes.

Follow the investment advice of the professionals. Set aside enough money to cover emergencies then fully fund your 401K. The chances are pretty remote that you will be able to beat the tax advantage of a 401K, employer contributions, and professional management. If you still have funds available, then considering investing outside of your 401K.

 

[HenryBHough]

Once upon a time, in states like California, "double tax frees" were a good investment. Those are state or municipal bonds, the interest on which is exempt from both state and federal income taxes.

But not now. Risk of default that used to be a minor potential downside has now become "certainty of default".

I still chortle over a 20-year mortgage loan I made to an allegedly smart person when interest rates were considered good if they were just 21%. He could have paid it off by refinancing about 3 years later but never did. Just kept paying and paying and paying. I still have some spare bucks I'd lend out at 21% should anyone be interested and have good collateral.

 

[Manonthestreet]

Want to become an investor? Go here......Bogleheads

Read it, apply it, benefit.

Trading is for gamblers, dummies, and people that already have lots of money. 26 year old people need to stay fully invested at all times.

even during crashes??? Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.

 

[Zander]

Want to become an investor? Go here......Bogleheads

Read it, apply it, benefit.

Trading is for gamblers, dummies, and people that already have lots of money. 26 year old people need to stay fully invested at all times.

even during crashes??? Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.

Good luck. are you 26?


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[Wake]

I was thinking that chaos breeds opportunity, and that I should wait with buying stocks until just before the market starts to recover from a serious crash. Is this a wise strategy?

 

[Manonthestreet]

Can be.......I'm not much investor but have done OK. Buy a subscription to Investors business Daily. Rules for selling, Rules on buying and chart reading tips chart reading tips...patterns and their meanings. Basic stuff but it can make or save you lot of trouble.

 

[Manonthestreet]

Want to become an investor? Go here......Bogleheads

Read it, apply it, benefit.

Trading is for gamblers, dummies, and people that already have lots of money. 26 year old people need to stay fully invested at all times.

even during crashes??? Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.

Good luck. are you 26?


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Doesnt matter what age you are , watching your capital needlessly dissipate is bad idea.

 

[Manonthestreet]

 

[Flopper]

Once upon a time, in states like California, "double tax frees" were a good investment. Those are state or municipal bonds, the interest on which is exempt from both state and federal income taxes.

But not now. Risk of default that used to be a minor potential downside has now become "certainty of default".

I still chortle over a 20-year mortgage loan I made to an allegedly smart person when interest rates were considered good if they were just 21%. He could have paid it off by refinancing about 3 years later but never did. Just kept paying and paying and paying. I still have some spare bucks I'd lend out at 21% should anyone be interested and have good collateral.

Moody's did a study of Muni defaults over the past 40 years. They found the rate of default was .01%. Over the past 5 years the default rate has risen to .03%, 3 bonds in every10,000 defaulted. Most all AAA and many AA bonds are now insured by MBIA, AMBAC, or FGIC. If you buy investment grade munis, the only thing safer are treasuries.

Moody s Municipal bond defaults remain low in number but new trends are emerging

 

[Zander]

Want to become an investor? Go here......Bogleheads

Read it, apply it, benefit.

Trading is for gamblers, dummies, and people that already have lots of money. 26 year old people need to stay fully invested at all times.

even during crashes??? Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.

Good luck. are you 26?


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Doesnt matter what age you are , watching your capital needlessly dissipate is bad idea.

Long term - Buy and hold outperforms.

But it's your money. Do what you think is best.


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[Manonthestreet]

Keep telling yourself that when you take a 50% haircut while I did not

 

[Flopper]

I was thinking that chaos breeds opportunity, and that I should wait with buying stocks until just before the market starts to recover from a serious crash. Is this a wise strategy?

What you're talking about is identifying the bottom. Take a look at 2007. In Oct, the Dow peaked at 13,270. Within 3 months it fell over 1,000 points. Then there were several short lived recovered and it fell 1,000 by June. Then there was another recovery. In the following 6 months, the Dow fell over 4,000 points. Many retirement plans had lost half their value. Investment advisers that were predicting a rosy future just a year ago were telling their clients to prepare for further loses. And suddenly the market bottomed and rose 4,000 points in 2 months. The financial news was terrible at this time. Walls Street firms were going under. The auto industry was on the verge of collapse. The largest financial institutions were losing money hand over fist. Many were predicting the government would collapse. Stock market gurus were warning their followers that this could be bear trap and they should wait

The other point to consider is suppose you miss that point just before the market starts to recovery. Then what? Most people in this situation wait for market to fall again so they can take advantage of the low prices. If you did then you would still be waiting and you would have missed a 60% rise in the market. Buy low and sell high only works if you have a crystal ball.

 

[Zander]

Keep telling yourself that when you take a 50% haircut while I did not

Good luck.

I weathered 2008 just fine. I have a very conservative asset allocation. I'd love to see the market fall another 50%. It'd make a great buying opportunity. I have lots of dry powder......


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[Flopper]

Keep telling yourself that when you take a 50% haircut while I did not

Good luck.

I weathered 2008 just fine. I have a very conservative asset allocation. I'd love to see the market fall another 50%. It'd make a great buying opportunity. I have lots of dry powder......


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The Dow's down about 800 points from it's peak last month. If it breaks below it's bottom made the end of last year, I'll start moving moving more cash into the equity market. I don't think the markets ripe for a major fall just a good correction.

 

[william the wie]

You might want to define those terms for Wake Flopper.

 

[HenryBHough]

I won't put another penny in until The Dow is below 9,500.

 

[Flopper]

I won't put another penny in until The Dow is below 9,500.

Why 9500?

 

[HenryBHough]

I won't put another penny in until The Dow is below 9,500.

Why 9500?

Because I believe once it has dropped to 9500 there will be brief downward excursions but recovery to that point will be a sort of new norm for a period of time. How long depends on the policies of who/whatever takes over government in 2016. If it's Democrat then November, 2016 as soon as 9500 (or anything suddenly higher) pops up it'll be time to jump out as the new bottom will be below 7500. If it's Republican (with strong house/senate majorities) then it'll still be a buying opportunity in anticipation of a long, moderately paced climb back to 17000 or beyond.

Between now and then a 9500 Dow will represent a good "parking space" for money since banks are paying peanuts and there aren't many suckers around willing to borrow at high enough interest rates.