New To Investing Thread

[slucat]

Yes I realize things are at record highs…I’ve made some $$ while riding this for the last several months, however, typically the market pulls back in the summer and is due for a correction.  As I understood it from this thread and other information, index funds go with the market, no reason to buy and hold and ride it back down.

I'm probably one of the only ones in this thread that is fervently against the buy and hold strategy.  But others are certainly right about timing.  You can get shaken out of positions pretty easily if your stops are too tight.

Will we see enough movement to warrant selling with a plan to buy back?  Right now the S&P is 6% over 90DMA, and 10% over 180DMA.  Seems too soon to sell stuff, especially considering the fundamentals.  Maybe thin positions you want out of anyway and wait for a good buy point on stuff you want.  I'm wait and see and moving up stops.  But if we get down to 150 or 180DMA, I'm shorting a bunch of stuff.

Thanks, of course I'll reinvest, but it would be nice to cash in...take my profit and put in again this summer after the pull back...I'll keep all my stocks, they are paying dividends after all.  This is just my play account, not my retirement. I'll wait to see if the market does another run up before I sell off the index fund; I'm up over 40% on it...I can afford a small pull back and still come out ahead.

[sys]

slu, if you're going to try to time the market, pick a system that has a track record and stick to it.  doing it by hunch or emotion is not a proven system.

and, if you're doing this in a taxable account, you're going to have to hurdle the taxes you create for yourself before you even get back to even.

[Emo EMAW]

Question:  is doing anything other than buying and holding considered "timing the market?"

[sys]

Question:  is doing anything other than buying and holding considered "timing the market?"

if you buy or sell because you're trying to time the market, then it is.  if not, then it's not.

[ben ji]

Random investing story I heard this weekend from my bro down at the Ozarks.

His family is from Versailles and his gpa was one of the original developers of the Ozarks. Back in the day old Bud Walton(Brother of sam) was going door to door in Versailles selling walmart stock/raising capital, knocked on his gpa's door and gave him the pitch but got shot down.

Apparently Bud's widow still lives in a non descript house in versailles despite being worth hundreds of millions. 

[lopakman]

Sold a couple pud stocks and just put a buy order in for 100 shares of ConocoPhillips to hold onto longterm.  Great p/e ratio at just over 10 and currently paying over 4% yearly dividend.  Hope it doesn't tank when all cars run on corn.

 

[raquetcat]

Random investing story I heard this weekend from my bro down at the Ozarks.

His family is from Versailles and his gpa was one of the original developers of the Ozarks. Back in the day old Bud Walton(Brother of sam) was going door to door in Versailles selling walmart stock/raising capital, knocked on his gpa's door and gave him the pitch but got shot down.

Apparently Bud's widow still lives in a non descript house in versailles despite being worth hundreds of millions.

I love stories like that. I had a great uncle who was a hermit, no wife, no kids, but apparently he was an investing guru. The guy was so cheap he wore clothes with holes in them. My grandparents tell a story about when he got new carpet in his house he just had the carpet layers put the new carpet directly over the old carpet so he didn't have to buy a new carpet pad. The guy died with millions and left it all to the local public library.

[sys]

I love stories like that. I had a great uncle who was a hermit, no wife, no kids, but apparently he was an investing guru. The guy was so cheap he wore clothes with holes in them. My grandparents tell a story about when he got new carpet in his house he just had the carpet layers put the new carpet directly over the old carpet so he didn't have to buy a new carpet pad. The guy died with millions and left it all to the local public library.

you don't need outsized returns if you don't spend your income.

[raquetcat]

I love stories like that. I had a great uncle who was a hermit, no wife, no kids, but apparently he was an investing guru. The guy was so cheap he wore clothes with holes in them. My grandparents tell a story about when he got new carpet in his house he just had the carpet layers put the new carpet directly over the old carpet so he didn't have to buy a new carpet pad. The guy died with millions and left it all to the local public library.

you don't need outsized returns if you don't spend your income.

Don't ruin a childhood folk hero for me sys, ok?

[sys]

didn't mean to.  plus, he left his money to a public library, so he was a great man.

[raquetcat]

didn't mean to.  plus, he left his money to a public library, so he was a great man.

 

[sys]

i just learned this.  should be of interest to you low-cost index investors.


https://www.fidelity.com/learning-center/etf/etfs-tax-efficiency

[Kat Kid]

i just learned this.  should be of interest to you low-cost index investors.


https://www.fidelity.com/learning-center/etf/etfs-tax-efficiency

That is true but probably misleading.  Most of the investors in this thread are exclusively investing in tax sheltered accounts (401k, 403b or IRAs).  For the few that aren't, they should run the numbers on the cost of opening and maintaining a brokerage account in the first place.  They may well exceed any potential tax benefits that would be gained by investing in ETF.  For example, Vanguard requires you to have a brokerage account to buy/sell ETF's with them.  Now they don't charge a commission but there are fees associated with each trade and the opening and maintenance of the brokerage account. 

So if you are taking a buy and hold strategy in a taxable investing account (and you already max your 401k past employer match AND your IRA AND you don't have a good HSA to stash this cash or have maxed that out) then it might be a better option assuming you have enough to make the fees a smaller concern than the tax liability.

Proceed with caution friends.

[sys]

it's not misleading.  it should be obvious to anyone looking at it that tax efficiency isn't a concern if all of your investments are in tax advantaged accounts.

transaction costs (including any account maintenance fees) are usually equal or lower for etfs vs mutual funds.

[sys]

on a semi-related note - does anyone have a discount brokerage they'd recommend for fees and flexibility?  i've been toying with opening an ib account for options and foreign markets, but i'm not sure i'd be active enough to justify the maintenance fees (actually, i'm pretty sure i wouldn't be). 

[Kat Kid]

on a semi-related note - does anyone have a discount brokerage they'd recommend for fees and flexibility?  i've been toying with opening an ib account for options and foreign markets, but i'm not sure i'd be active enough to justify the maintenance fees (actually, i'm pretty sure i wouldn't be).

Yeah see my post above.

[sys]

Yeah see my post above.

i didn't see any recommendos in your post.

[steve dave]

sys, I think commodities are where it's at

[sys]

sys, I think commodities are where it's at

not for me.

[kostakio]

on a semi-related note - does anyone have a discount brokerage they'd recommend for fees and flexibility?  i've been toying with opening an ib account for options and foreign markets, but i'm not sure i'd be active enough to justify the maintenance fees (actually, i'm pretty sure i wouldn't be).

Fidelity doesn't charge any fees to open or maintain an account. 

[sys]

Fidelity doesn't charge any fees to open or maintain an account. 

that's the only viable alternative to ib for access to foreign markets that i've seen.  ib has lower trading fees, but if you don't hit the volume marks, you have the maintenance fees.  fidelity has higher fees and isn't as flexible, but no maintenance fees.

fidelity probably makes more sense for me right now.  gotta admit, ib would feed my ego a little.

[hemmy]

i just learned this.  should be of interest to you low-cost index investors.


https://www.fidelity.com/learning-center/etf/etfs-tax-efficiency

That is true but probably misleading.  Most of the investors in this thread are exclusively investing in tax sheltered accounts (401k, 403b or IRAs).  For the few that aren't, they should run the numbers on the cost of opening and maintaining a brokerage account in the first place.  They may well exceed any potential tax benefits that would be gained by investing in ETF.  For example, Vanguard requires you to have a brokerage account to buy/sell ETF's with them.  Now they don't charge a commission but there are fees associated with each trade and the opening and maintenance of the brokerage account. 

So if you are taking a buy and hold strategy in a taxable investing account (and you already max your 401k past employer match AND your IRA AND you don't have a good HSA to stash this cash or have maxed that out) then it might be a better option assuming you have enough to make the fees a smaller concern than the tax liability.

Proceed with caution friends.

With Scottrade, its $7 per trade, and the only fees are the fees charged by the funds themselves. There is no cost to having a brokerage account, you just lose out on the tax benefits.  My Roth IRA & brokerage account are both through Scottrade and the two accounts are basically identical - access to tons of ETFs should you so choose.

My investments are quite different though across the two, and in my IRA I make the max contribution in January and invest then, and then leave it alone pretty much.

[sys]

With Scottrade, its $7 per trade, and the only fees are the fees charged by the funds themselves. There is no cost to having a brokerage account.

i use scottrade currently.  no complaints, it's just too limited for some things i want to invest in the future.

[Kat Kid]

i just learned this.  should be of interest to you low-cost index investors.


https://www.fidelity.com/learning-center/etf/etfs-tax-efficiency

That is true but probably misleading.  Most of the investors in this thread are exclusively investing in tax sheltered accounts (401k, 403b or IRAs).  For the few that aren't, they should run the numbers on the cost of opening and maintaining a brokerage account in the first place.  They may well exceed any potential tax benefits that would be gained by investing in ETF.  For example, Vanguard requires you to have a brokerage account to buy/sell ETF's with them.  Now they don't charge a commission but there are fees associated with each trade and the opening and maintenance of the brokerage account. 

So if you are taking a buy and hold strategy in a taxable investing account (and you already max your 401k past employer match AND your IRA AND you don't have a good HSA to stash this cash or have maxed that out) then it might be a better option assuming you have enough to make the fees a smaller concern than the tax liability.

Proceed with caution friends.

With Scottrade, its $7 per trade, and the only fees are the fees charged by the funds themselves. There is no cost to having a brokerage account, you just lose out on the tax benefits.  My Roth IRA & brokerage account are both through Scottrade and the two accounts are basically identical - access to tons of ETFs should you so choose.

My investments are quite different though across the two, and in my IRA I make the max contribution in January and invest then, and then leave it alone pretty much.

That is good info.

[sys]

kat kid, almost all of the online discount brokers have no fees to open or maintain an account.  ib is the only one i've seen that does.


if you transfer in a significant amount of money, a lot will pay you to open and maintain an account.