Investment discussion

Discussion, in general

Re: Investment discussion

Postby jbobsully11 » Sat Oct 10, 2020 1:26 am

It figures I'd read your post after putting my money (from selling some shares of a stock that has done well) in the total stock fund. Anyway, if you're looking for inverse ETFs, this Investopedia article lists a few inverse funds that have crashed lately.
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Crimson847 wrote:In other words, transgender-friendly privacy laws don't molest people, people molest people.

(Presumably, the only way to stop a bad guy with a transgender-friendly privacy law is a good guy with a transgender-friendly privacy law, and thus transgender-friendly privacy law rights need to be enshrined in the Constitution as well)
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Re: Investment discussion

Postby Pedgerow » Wed Nov 11, 2020 12:48 am

Well, I did it. I finally did it. I finally invested my "saving to buy a house" money into the stock market instead. I did it last night, when the markets were all flying up due to coronavirus vaccination allegedly being solved now. I know you're meant to buy low and sell high, but everyone seemed so delighted with the vaccination news that I don't think stock markets will be that low again, so I'd better get off my ass and hop on the gravy train before I miss my chance completely. You are now reading a post from the proud owner of a stocks and shares ISA containing a FTSE 100 tracker fund, because you can't outsmart the market and I certainly can't either. I made an initial deposit of £5,000, ready to cash in when it doubles in value next year. It is currently worth £4,887 after less than 24 hours. Goddamn it.
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Re: Investment discussion

Postby jbobsully11 » Fri Dec 11, 2020 4:21 pm

It recently occurred to me that, while month-to-month, my retirement account returns had mostly not seemed great to me (including four months since I started in November 2019 where I lost money overall, and at least four stocks that I sold all or part of prematurely), when I ran the numbers, I was actually up over 18.8% overall for the first 12 months my account was open (and >8.2% by the end of October). *braces for inevitable crash by the end of the day*
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Crimson847 wrote:In other words, transgender-friendly privacy laws don't molest people, people molest people.

(Presumably, the only way to stop a bad guy with a transgender-friendly privacy law is a good guy with a transgender-friendly privacy law, and thus transgender-friendly privacy law rights need to be enshrined in the Constitution as well)
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Re: Investment discussion

Postby cmsellers » Sun Dec 13, 2020 3:19 am

I've made over 20% on both my BrokerageLink account and my Roth IRA this year. This is all-the-more impressive when you consider that I didn't set up my IRA until around the start of June and my BrokerageLink account until July. However, it's also kind of predictable. The stock market averages around 8% in annualized returns, but with wild variation. Small cap value stocks and international value stocks, which make up around 50% and 20% of my discretionary portfolio respectively (then I have about 20% emerging markets and 10% across six tech ETFs) do better than that on average, but with even wilder volatility. So this has been a good year, but next year could easily see my portfolio losing 30% of its value.

Meanwhile, my total returns on the non-BrokerageLink part of my 401k are under 10%, even though it's my oldest retirement account by about three months. This is partially because small cap value and international value have done really well since October and I can't hold either of those in the non-BrokerageLink part of my 401k, but it's also because I allocated 5% of my portfolio to my employer's stock. There may or may not be some tax benefits to holding your employer's stock in a 401k, and since I couldn't determine whether there was, I decided to put in 5% of that account as my employer's stock.

That was a bad move, and an abject lesson on why you should never hold individual stocks. That 5% of my holdings in that account lost about 20% of its value. Throw in the fact that I had a 20% allocation to bonds in that account until a few months ago (and some bonds until a month ago, when I decided it doesn't make sense for me to hold any bonds until I'm at least 35), and the non-BrokerageLink part of my portfolio did really badly. I got rid of the company stock in August, and in October I ditched the bonds and invested that half of the 401k into a 6:3:1 ratio into my 401k's version of the Vanguard Value Fund, Vanguard Extended Market Fund (which for some reason has a massive allocation towards large-cap growth stocks or I'd do a 1:1 ratio of these two funds), and the Vanguard Developed Markets fund. Since then, this half of my portfolio is still underperforming my BrokerageLink and IRA, but by a lot less than it was.

Because I don't like the vanilla international options in the basic half of my 401k, I'm overweighting American ETF, which I also don't love (especially the "small cap" option which is really a mid-cap growth option), but I dislike a lot less than the three international options I get: 1. vanilla developed markets (not awful, just not great), 1. vanilla emerging markets (I'm trying to avoid Russia, China, Brazil, and Saudi Arabia), and 3. an actively-managed developed market fund targeting growth stocks which is the exact opposite of the passively-managed fund tracking value stocks that I want for developed markets.
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Re: Investment discussion

Postby jbobsully11 » Sun Dec 13, 2020 6:17 am

cmsellers wrote:Meanwhile, my total returns on the non-BrokerageLink part of my 401k are under 10%, even though it's my oldest retirement account by about three months. This is partially because small cap value and international value have done really well since October and I can't hold either of those in the non-BrokerageLink part of my 401k, but it's also because I allocated 5% of my portfolio to my employer's stock. There may or may not be some tax benefits to holding your employer's stock in a 401k, and since I couldn't determine whether there was, I decided to put in 5% of that account as my employer's stock.

That was a bad move, and an abject lesson on why you should never hold individual stocks. That 5% of my holdings in that account lost about 20% of its value.

Ehh... maybe. It's certainly a bad idea to hold a significant percentage of your total portfolio in one company, but I would argue that's true of any one sector as well (unless, possibly, you're intimately familiar with that sector and you can accurately predict how it will perform over the medium- to long-term, and of course you can keep your emotions in check and not panic-sell in the meantime).

The individual companies I had this year have mostly done well, and the ones that didn't were mostly <$5 each, so meh. I sold some stocks that did well too early, either because I was nervous that they'd crash again or I was too eager to get my money back. "Never gamble more than you can afford to lose," I guess.

(And I'm no expert, but I can't find anything about tax benefits for holding your own company's stock in your 401(k), either. In fact, if your company is big enough, you might be exposed to it through some fund already.)
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Crimson847 wrote:In other words, transgender-friendly privacy laws don't molest people, people molest people.

(Presumably, the only way to stop a bad guy with a transgender-friendly privacy law is a good guy with a transgender-friendly privacy law, and thus transgender-friendly privacy law rights need to be enshrined in the Constitution as well)
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Re: Investment discussion

Postby cmsellers » Sun Dec 13, 2020 6:33 am

The only sector ETFs I have are in tech, and because I am invested on small cap value, I'm actually still underweight on tech. Without the tech sector ETFs, I'd have about 10% of of my US holdings in tech, which represents 27% of US market capitalization. With my tech sector ETFs, about 20% of my US holdings are in tech. For the record, the tech ETFs I am currently holding are PRNT (3d printing) IZRL (Israeli tech), LOUP (factor-based general tech), TDIV (dividend-weighted general tech), XBI (biotech), and XT (exponential tech).

Now, adding high-cost tech sector ETFs to offset underweight tech sector weighting in a small-cap value heavy strategy is still a questionable approach to investing, and Ben Felix, whose videos are the reason I'm so heavily invested in US small-cap value and international developed value ETFs, recently did a video on why.

But it hasn't burned me yet, and has evened out day-to-day volatility in my portfolio (the tech ETFs, US small cap value ETFs, and emerging market ETFs seem to have largely uncorrelated behavior with each other), so I'm still doing it, even though rationally I recognize that it's probably dumb. At least I'm not holding any ETFs that are heavy on Tesla, though!
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Re: Investment discussion

Postby jbobsully11 » Sun Dec 13, 2020 10:54 pm

I actually was waiting for the price of PRNT to drop a bit, but I don't know how realistic that is any time soon.

I was about to list the ETFs I was invested in, but it occurred to me that I have entirely too many to bother writing here on my phone (I'm at my dad's house), including multiple funds in the same sector (pharmaceutical and emerging markets, in particular). Suffice to say that sometime tomorrow, I'll be rebalancing my retirement account.
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Crimson847 wrote:In other words, transgender-friendly privacy laws don't molest people, people molest people.

(Presumably, the only way to stop a bad guy with a transgender-friendly privacy law is a good guy with a transgender-friendly privacy law, and thus transgender-friendly privacy law rights need to be enshrined in the Constitution as well)
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Re: Investment discussion

Postby JamishT » Tue Jan 05, 2021 12:43 am

Last week I got what was left from my security deposit from the last house I lived in, which was about $120, on the same app I use to invest, so rather than taking the time to send it to my bank account I invested it. I now own:

1.26 shares of American Airlines
2.03 of Spirit Airlines
1.38 of Carnival (the cruise company)
1.26 of H&R Block

I sorted through the companies available on the platform I was using (Cash App) by those whose stock prices had gone down by more than 20% over the past year. The airlines and Carnival have lost 40-50% of their value over the past year, but I think that the vaccines and change in government will either resurrect the tourism industry, bail them out, or both. Spirit is a favorite of cheapskates and I perceive American to be popular with the business class, and people in both groups have been cooped up for a year. Also, their stock prices were a better fit for my little game than the other airlines. I think I have already covered Carnival.

H&R Block is a weird one to me. It's down 33% over the year, and I don't know why. I am assuming that the incoming administration will push for new taxes and such, especially if the Georgia runoffs result in the Democrats taking the Senate, resulting in more people going to tax preparers. I noticed that Walgreens has also lost a lot stock value, and I almost bought one of theirs instead.
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Re: Investment discussion

Postby cmsellers » Sat Jan 09, 2021 5:41 am

Obviously, you know my views on investing in individual stocks, but at the levels you're investing, I think having fun is probably more important than maximizing your returns.

Any rate, because I watch Graham Stephan somewhat regularly (it's funny that he's now one of the best-known YouTubers), I keep getting other investment videos, which I also sometimes click on, which leads YouTube to recommend more. The problem is: unless you're giving evidence-based investing advice and reviewing papers (and only Ben Felix does this that I've found), there's not actually not a lot that you can say. Most of the advice is either redundant if you know the first thing about investing, or bad. This is true even for Graham, whom I don't watch for his advice.

Now, Graham's advice is pretty sound; I only have two quibbles: 1. He advises investing in the S&P 500, and 2. he advises picking some individual stocks. At the very least, invest in a total market index fund, not S&P 500. Ideally, you want exposure to international stocks and to the size and value premium above the market, but even with an extremely risk-averse and lazy investor, do a total market fund.

In these other videos, I'm seeing fairly frequent advice on picking individual stocks, which should always be one word: "don't." But more than that, I'm seeing two things that really frustrate me: 1. discussion of the active managers predicting an index fund bubble like that could actually happen, and 2. the assumption that all index funds are the S&P 500.

Obviously, #2 isn't remotely true, but I see a lot of people complaining that 2. a. index funds don't hold small cap stocks and that 2. b. growth is likely to be greater in small cap stocks. The first part is only true of S&P 500 index funds, not index funds in general. As I've noted, I hold no S&P 500 index funds (I did briefly hold one in the "core" part of my 401k), and if it were up to me, would be pretty much all in on small-cap value (55%), small/mid cap tech (10%), and assorted international ETFs. The second part is true, but not because anyone can reliably pick these small-cap stocks: we still have no evidence that's possible, and pretty convincing evidence that active managers cannot.

As for the supposed index-fund "bubble," it relies on the belief that index funds are muting the effects of discovery pricing, and therefore inflating the price of bad stocks. However prices are determined by trades and index fund purchases account for 5% of all daily trades. Papers which have looked at this have determined that you could have well over half of all trades, and likely up to around (IIRC) 90% be index fund purchases before you'd actually mute the effect of discovery pricing.

It's just ... I'm frustrated by how absolutely ignorant most financial advice channels are. It's kind of amazing to me that there's only one I know of which even attempts to use the literature to answer questions as opposed to just going from personal experience and gut feelings.
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Re: Investment discussion

Postby Pedgerow » Sun Jan 31, 2021 12:52 am

Does anyone here have any investments in the wonderful Gamestop story? It really is a great story. If you haven't invested by now, then for the love of God don't, because you will lose all your money, but it would be great if someone here had contributed.
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Re: Investment discussion

Postby cmsellers » Sun Jan 31, 2021 4:28 am

Like I said; I never buy individual stocks, so my involvement is limited to it being frustrated by crashing my brokerage's trading system pretty much all morning for two days in a row. (Unfortunately, Schwab is extremely prone to crashes whenever the market is even a little bit volatile.)

Even though I know you shouldn't time the market, whenever the market goes down by more than 3%, I put more money into my Roth IRA until I've maxed out my contributions for the year. Most of the time, the pattern is that it'll dip a little bit more the next morning and then recover end the day up. This is only the second time that hasn't worked out for me, and it's not even because the pattern failed (though it ultimately did, with the overall market ending down again on Tuesday, which is why I put more money in on Wednesday), it's because I couldn't trade until the rally hit its peak. So I ended up buying high on a day that crashed some more, but since it was only $300 I invested at that point, I'm gonna keep doing my "mini-timing" with the IRA.

But yeah, it sure is an amusing story. I will say that if someone had shown me the reddit thread and tried to explain how short squeezes work a month ago, I'd have rolled my eyes and reiterated that I don't buy individual stocks. It's a policy that I expect to continue, because even though I now know that a scheme like this can work, all the institutional investors now monitoring r/wallstreetbets know it too.
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Re: Investment discussion

Postby cmsellers » Tue Feb 02, 2021 4:45 am

I want to start a hedge fund which is just a fund to buy literal hedges.

...

I'm not sure what I'm gonna do with a bunch of hedges, but I still wanna do it.
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Re: Investment discussion

Postby jbobsully11 » Tue Feb 09, 2021 5:00 am

The inverse fund I invested in (HDGE) did a reverse split a few days ago, and I went from owning ten shares to only having one worth ten times as much. This interferes with my plan to sell only a little bit the next time the market crashes.
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Crimson847 wrote:In other words, transgender-friendly privacy laws don't molest people, people molest people.

(Presumably, the only way to stop a bad guy with a transgender-friendly privacy law is a good guy with a transgender-friendly privacy law, and thus transgender-friendly privacy law rights need to be enshrined in the Constitution as well)
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Re: Investment discussion

Postby iMURDAu » Tue Feb 09, 2021 11:30 pm

cmsellers wrote:I want to start a hedge fund which is just a fund to buy literal hedges.

...

I'm not sure what I'm gonna do with a bunch of hedges, but I still wanna do it.


There's so many things. You can have a garden that looks like famous sculptures, a maze, ok there's like two things.
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Re: Investment discussion

Postby cmsellers » Wed Feb 10, 2021 5:19 am

jbobsully11 wrote:The inverse fund I invested in (HDGE) did a reverse split a few days ago, and I went from owning ten shares to only having one worth ten times as much. This interferes with my plan to sell only a little bit the next time the market crashes.

Holy fuck, that expense ratio! Now I feel a lot less bad about the funds I have with expense ratios as high as .7! (LOUP and FDM are the two at .7 exactly, if you're curious)

Why are you betting against the overall stock market anyways? In the long-term it always goes up, which makes that seem like an unwise bet even before you take on short positions and active management.

iMURDAu wrote:There's so many things. You can have a garden that looks like famous sculptures, a maze, ok there's like two things.

I could also sell them to politicians to hide behind!
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