Stock Market Discussion

[sixstringer]

Once discussions like this start popping up ("I'm dipping my toes in the market!") it's usually a sign that the party is coming to an end.

Picking individual stocks is a zero sum game; your competition in that game is hedge funds, pensions, mutual funds staffed by leagues of MBAs,CFAs, PhDs and more importantly now, algorithms.

I would sell your Netflix position, and put 70% in an S&P 500 ETF, 30% in Total International ETF. This combination has proven to outperform the S&P with less risk over time.

I'm no financial guru but I totally agree with this. In addition to buying MBW posters, I've been doing a weekly auto invest into a super low fee S&P 500 Index fund for years. Watch out for those mutual fund management fees...a couple of % points a year may not seem like much but over time it can really kill your nest egg. There's a PBS Frontline doc called "The Retirement Gamble" that's a must watch imo.

[optimusGRRR]

Once discussions like this start popping up ("I'm dipping my toes in the market!") it's usually a sign that the party is coming to an end.

Picking individual stocks is a zero sum game; your competition in that game is hedge funds, pensions, mutual funds staffed by leagues of MBAs,CFAs, PhDs and more importantly now, algorithms.

I would sell your Netflix position, and put 70% in an S&P 500 ETF, 30% in Total International ETF. This combination has proven to outperform the S&P with less risk over time.

Definitely. Almost all of my savings is in a Roth account and in mutual funds. I'm a worker by nature and quite conservative financially so the 5% that I buy individual stocks with is just to satiate the wannabe hustler in me. The dumbest thing I do with my money is going out to eat too much and buying pop culture posters every 5 minutes.

aint nuttin wrong with the hustle. dark pools are a bunch of fudge. hopefully you've been able to participate in the last 6 year bull market

I manage money for a living, and write in-the-money covered calls on a monthly roll for most of my returns. When analyzing non-professionally manage portfolios however, 9 out of 10 produce negative risk adjusted returns (negative alpha for those CFA folks), hence the ETF recommendation.

[john38103]

From what I'm told the below advice is only applicable for Gemini's in the month of June.

BUY GOLD. BUY BUTTER. BUY STEEL. BUY APPL. BUY GOOG. SELL DIAMONDS. SELL PORK BELLIES. SELL CVX. GREEN ENERGY. ART.COM. GUITAR CENTER SESSIONS. EVERYTHING THAT IS NOT INFINITY IS A MERE DISTRACTION. THING IS, NOTHING IS NOT INFINITY.DUBAI. DIPLOMATS. BLUES BROTHERS. WAVVES. BEST COAST. TYGA. BLACK CHYNA. THE FADER. PLAYBOY. CULT DAYS. KOOL A.D. GEMINI. SCORPIO. LIBRA. ARIES. CAPRICORN. AQUARIUS. TAURUS. TOYOTA. CADILLAC. CHEVROLET. ACURA LEGEND. GIVENCHY. ROLEX. GUCCI. REAL TRAP fudge. LIFE AND TIME. HIP HOP. LAS VEGAS. MIAMI. EVERYBODY LOVES MIAMI. OH PS HAPPY BIRTHDAY. THE TIME IS NOW AND AS SOON AS NOW GETS HERE UR THERE, FURL MEH? EVERYTHING IS EVERYTHING. ONE LOVE. BLESS UP. JAH BLESS. I LOVE U.

[jjttdw]

This thread will really deliver in a few years when some stocks are real winner while others were dogs. Kinda like flipping prints. I just hope people don't edit their losers out.

[theghost206]

Damn. Netflix up $40 today. Anyone still think it's a buy?

[CaptNemo]

optimus is closest to the mark here. Pay off your high interest debt then maximize monthly contributions to retirement accounts. Invest retirement savings in broad index ETFs (if available -- many 401k plans only have mutual funds), including S&P500, International, bonds. Never touch the money.

Picking individual stocks is fine as long as you're not playing with more than 5-10% of your nest egg. Be ready to take a loss. Don't spend the investment returns before you've earned them. Don't spend them at all.

Regarding AAPL, its market cap is so big (over $700B) that any index ETF or MF is going to have a chunk of AAPL in it; for instance AAPL represents 4% of the S&P500 index. See http://etfdb.com/stock/AAPL/

Enjoy. Keep saving. Don't do drugs.

[theghost206]

I am having a hard time differentiating between ETF's and mutual funds. What I can gather is that ETF's trade like stocks (i.e. can be traded during the day) while mutual funds settle after closing. But assuming that both ETF's and mutual funds are to be held long term what's the difference? What are the pros and cons of each and why are ETF's becoming more and more popular?

[optimusGRRR]

I am having a hard time differentiating between ETF's and mutual funds. What I can gather is that ETF's trade like stocks (i.e. can be traded during the day) while mutual funds settle after closing. But assuming that both ETF's and mutual funds are to be held long term what's the difference? What are the pros and cons of each and why are ETF's becoming more and more popular?

You can only buy and sell a mutual fund once a day at the close, so if the market is down at 11AM and place your trade, and the then it goes back up 3:45PM, you get the market close at the end of the day. So you can't place stop or limit orders. ETFs trade like stocks.

In addition to being a lot more liquid, ETFs tend to have much lower internal expenses then mutual funds, which can add up considerably over time with compounding. You can also buy/sell them for free at Fidelity, Schwab, etc.

They are far more tax efficient as well, which I won't delve to deep into since most people are investing in IRAs.

[CaptNemo]

ETFs and mutual funds are similar in some important ways. http://en.wikipedia.org/wiki/Exchange-t ... tual_funds

[o4phish20o]

My success was passed on to me by my grandfather, who was born in 1918 and lived right through the depression.
He left me with the single greatest bit of investing advice, something which helped make him millions over his lifetime, (which is crazy coming from the GD era.)

Buy stocks... BUT, only buy companies that were around before you were born and will out live you.


And the advice from my father..... Always buy the #1 Supplier, the #1 Competitor & the #1 Customer... for the company you work for.
Not only does it keep you more vested in your work, but also gives you a return on what you put in to it and happens.
My dad happened to work for a corrugated box supply company in the mid 70s... a little known company at the time, Walmart started using them exclusively. Boy did that investment help set our family up nicely.

[Vytis33]

Forgot we had this thread...SGYP running like Seabiscuit today fellas! Been a damn good day.

[evilpresence]

Why did I doubt Netflix years ago?

[ZLandrum]

GWPH has done really well for me, first and only stock investment... well, along with several other penny stocks that have lost me equally what I've earned on GWPH. got in at 44.47

[maden]

My success was passed on to me by my grandfather, who was born in 1918 and lived right through the depression.
He left me with the single greatest bit of investing advice, something which helped make him millions over his lifetime, (which is crazy coming from the GD era.)

Buy stocks... BUT, only buy companies that were around before you were born and will out live you.


And the advice from my father..... Always buy the #1 Supplier, the #1 Competitor & the #1 Customer... for the company you work for.
Not only does it keep you more vested in your work, but also gives you a return on what you put in to it and happens.
My dad happened to work for a corrugated box supply company in the mid 70s... a little known company at the time, Walmart started using them exclusively. Boy did that investment help set our family up nicely.

Dude's got stacks on stacks on stacks!

[mattkardish]

Why did I doubt Netflix years ago?

lol PCLN is worse. NFLX is just $800 a drymounting share right now / 7 for 1 split