The Stock Market and Investing

carnaught · January 2021

Tried to do a transaction of my E-Trade and transactions "are not available - try again later". Anyone else noticed this with their financial company? Many are predicting a precipitous drop in the market due to the new policies on the horizon.

What do you gurus think?

ab348 · January 2021

carnaught said:
Many are predicting a precipitous drop in the market due to the new policies on the horizon.

Please provide details.

carnaught · January 2021

Some financial advisors on financial sites are not recommending "sell", rather are predicting a >50% market drop. Who knows??

ab348 · January 2021

Are you talking about the ones featured in clickbait ads displayed on the bottom of certain website pages?

cdnpinhead · January 2021

As always, when things look like they're out of the ordinary, like the significant runup of the market last year, followed by a major change in the U.S. Government, I rebalance. Right after the first of the year I let the winners (equities) pay the losers (though the bond index fund wasn't all that shabby) which in my world are the bond and money market funds. Either way I'll either continue to win on the equities going forward or I'll lose quite a bit less than I would have if stocks take a bath.

YMMV

qbrozen · January 2021

This morning was rough. Both TD and Etrade were not functioning. By the time they were back, the market was 500 pts down. Most are blaming the whole Gamestop game to be the cause of the system problems.

carnaught · January 2021

carnaught said:
Some financial advisors on financial sites are not recommending "sell", rather are predicting a >50% market drop. Who knows??

Nope...

kyfdx · January 2021

qbrozen said:
This morning was rough. Both TD and Etrade were not functioning. By the time they were back, the market was 500 pts down. Most are blaming the whole Gamestop game to be the cause of the system problems.

Without a doubt

kyfdx · January 2021

carnaught said:
Some financial advisors on financial sites are not recommending "sell", rather are predicting a >50% market drop. Who knows??

Those aren't financial advisors, those are pundits.

If your financial advisor predicts stocks are going to drop by 50%, ask him if he's Nostradamus, and find a new advisor.

carnaught · January 2021

kyfdx said:

carnaught said:
Some financial advisors on financial sites are not recommending "sell", rather are predicting a >50% market drop. Who knows??
Those aren't financial advisors, those are pundits.

If your financial advisor predicts stocks are going to drop by 50%, ask him if he's Nostradamus, and find a new advisor.

Like I said, “who knows”?

kyfdx · January 2021

carnaught said:

kyfdx said:

carnaught said:
Some financial advisors on financial sites are not recommending "sell", rather are predicting a >50% market drop. Who knows??
Those aren't financial advisors, those are pundits.

If your financial advisor predicts stocks are going to drop by 50%, ask him if he's Nostradamus, and find a new advisor.

Like I said, “who knows”?

That is exactly my point. Investing on pundit predictions is no way to build wealth.

corvette · January 2021

kyfdx said:

carnaught said:
Some financial advisors on financial sites are not recommending "sell", rather are predicting a >50% market drop. Who knows??
Those aren't financial advisors, those are pundits.

If your financial advisor predicts stocks are going to drop by 50%, ask him if he's Nostradamus, and find a new advisor.

Better yet, read a couple of basic investing books, and you'll probably know 99% of the important stuff a financial advisor knows (so you can be your own advisor), plus you won't have a conflict of interest in trying to sell products to yourself.

corvette · January 2021

Thought this might fit here:

ab348 · January 2021

I have to think that those Reddit gamers are going to take it in the neck sooner or later.

stickguy · January 2021

last man left holding the bag is going to lose big. Though if there are enough people involved, won't be too bad per head.

imidazol97 · January 2021

The big companies supported by the fed laws and tax codes seem to have performed a Parler on the Robinhood trading company. Can't have anyone other that the big hedge firms squeezing money out of little people.

omarman · January 2021

I read a post on another topic regarding Robinhood restricting GME trades. The explanation given was that "Robinhood had to stop accepting orders, because their credit line with the clearinghouse couldn't cover all of the orders."

I thought Robinhood was self clearing and found a link to a December 2020 list of exchanges and clearing houses indicating that Robinhood offers "Clearing by Robinhood."

And here's a link to an interview with Vlad Tenev Robinhood CEO dated Friday January 29, 2021.

The interviewer pointed out that, "You did Clearing by Robinhood, that's what you went that direction to internalize this stuff. So I mean, it sounds like this was the first time that system was stressed. So you know, at what point did you realize that might have been an issue here? And I guess, maybe retroactively, if you had gone with an outside clearinghouse, would some of these issues have happened?

VLAD TENEV: You know, it's hard to say the counterfactual. All I could say is, again, we're very confident about our future.

The interviewer pressed again saying, "And I just got to return to my question, because it doesn't really sound like you answered it, in terms of when you realized this was going to be a problem...And TD Ameritrade and Schwab didn't cut off buys...So at what point did you realize there were issues around this that you were going to need to raise a billion dollars?"

VLAD TENEV: Well, look, I don't really want to get into the details of exactly what happened when.

The interviewer also asked if Vlad would respond to, "...some of those conspiracy theories that we heard that you guys sold out to Citadel or said some of the things? Set the record straight on why you made this decision."

VLAD TENEV: "Our decision to temporarily restrict customers from buying certain securities had nothing to do with a market maker or a market participant or anyone like that putting pressure on us or asking us to do that. It was entirely about market dynamics and clearinghouse deposit requirements, as per regulation."

qbrozen · January 2021

https://www.cnbc.com/2021/01/28/robinhood-interactive-brokers-restrict-trading-in-gamestop-s.html

omarman · January 2021

A long time ago, last year, (December) Robinhood paid a $65 million penalty to settle SEC charges of failing to fully disclose payment for order flow revenue and also failing to obtain the best terms when executing customer trades.

Glad that's all behind them now! Could Robinhood's current issues with restricting customer trades and dependency on market makers for revenue have any possible connection to such old business from the past years? Their CEO thinks not. In this bright and shiny new year of 2021, Robinhood declares itself a hero of SEC compliance! See? They told you so before. It's the government's fault. Ok that's more like it.

I think Vlad should do more interviews.

dad23 · January 2021

Just a quick question, somewhat in light of current events, but something I've been considering for a while. How much of your portfolio is in single stocks opposed to mutual funds? We have about half of ours in single stocks, Amazon, Apple, Microsoft, etc, everything else in mutual funds/etfs/cefs.

stickguy · January 2021

see, this is why you should be fully invested in having a house, nice car, and being otherwise broke. No need to worry about the markets!

stickguy · January 2021

dad23 said:
Just a quick question, somewhat in light of current events, but something I've been considering for a while. How much of your portfolio is in single stocks opposed to mutual funds? We have about half of ours in single stocks, Amazon, Apple, Microsoft, etc, everything else in mutual funds/etfs/cefs.

some stocks, but probably would have been better off doing all mutual funds. That is for what we hold. 401ks are obviously funds.

kyfdx · January 2021

dad23 said:
Just a quick question, somewhat in light of current events, but something I've been considering for a while. How much of your portfolio is in single stocks opposed to mutual funds? We have about half of ours in single stocks, Amazon, Apple, Microsoft, etc, everything else in mutual funds/etfs/cefs.

About 18-20% of our financial assets are in individual stocks. 1/3 of that amount is from a stock purchase plan at our employer, that we accumulated in the late '80s.
We both worked at the same company for 30 years, so we have most of our holdings in the mutual funds of the 401Ks where we worked. (Vanguard).

Also, both retired, so that might skew our holdings, compared to someone that is still working.

carnaught · January 2021

All my holdings are under my mattress

.

cdnpinhead · January 2021

100% Vanguard mutual funds -- 38% various equity funds, 62% bonds & money market

xwesx · January 2021

My retirement account is in mutual funds, which I think are currently about 50% stocks. I have about 90% of my individual investment account in stocks, and the rest in ETFs.

The sale of Fitbit to Alphabet was a good one for me - I more than doubled my money there. 2020 was a good year for my holdings, but sure makes me question the value of new share acquisitions.

corvette · January 2021

I'm at about 75% stocks, 25% bonds. Have a very small individual stock holding, the rest is in mutual funds. The conventional wisdom for those who hold individual stocks is not to have more than 5% or so of your portfolio in a single stock. Also, if too many are in the same or similar sectors (i.e., technology related), you may not be well diversified.

qbrozen · January 2021

Oh, at the moment, in my Etrade account, I’m about 10% chosen stocks, 10% employer stock, 10% cash position, and 70% ETFs.

dad23 · January 2021

Thanks guys, put a note on my calendar to call our guy Monday 🤓

Sandman6472 · January 2021

Fidelity for mutual funds and luckily, Enterprise also uses them for our 401K. Have a few stocks that I've held for awhile since I like the dividends they pay. My folks had bought some shares of stock in the company that bought out our company back in the mid 1960's and I was finally able to get them after my mom passed in 2005. Cashed those in and started investing on my own. Was lucky that when I did cash them in, it had just hit it's all time high a day or two before so it was still right up there. Dumb luck I guess...was just at the right place at the right time!

xwesx · January 2021

Sandman6472 said:
Fidelity for mutual funds and luckily, Enterprise also uses them for our 401K. Have a few stocks that I've held for awhile since I like the dividends they pay. My folks had bought some shares of stock in the company that bought out our company back in the mid 1960's and I was finally able to get them after my mom passed in 2005. Cashed those in and started investing on my own. Was lucky that when I did cash them in, it had just hit it's all time high a day or two before so it was still right up there. Dumb luck I guess...was just at the right place at the right time!

Yeah, dividend stocks are good beyond the individual share price. I hold a fair bit of Ford stock (within the context of my total holdings) for just that reason. Non-dividend stock only has value on paper until you sell it.

kyfdx · January 2021

xwesx said:

Sandman6472 said:
Fidelity for mutual funds and luckily, Enterprise also uses them for our 401K. Have a few stocks that I've held for awhile since I like the dividends they pay. My folks had bought some shares of stock in the company that bought out our company back in the mid 1960's and I was finally able to get them after my mom passed in 2005. Cashed those in and started investing on my own. Was lucky that when I did cash them in, it had just hit it's all time high a day or two before so it was still right up there. Dumb luck I guess...was just at the right place at the right time!
Yeah, dividend stocks are good beyond the individual share price. I hold a fair bit of Ford stock (within the context of my total holdings) for just that reason. Non-dividend stock only has value on paper until you sell it.

Too bad Ford suspended their dividend. 🙁

xwesx · January 2021

kyfdx said:

xwesx said:

Sandman6472 said:
Fidelity for mutual funds and luckily, Enterprise also uses them for our 401K. Have a few stocks that I've held for awhile since I like the dividends they pay. My folks had bought some shares of stock in the company that bought out our company back in the mid 1960's and I was finally able to get them after my mom passed in 2005. Cashed those in and started investing on my own. Was lucky that when I did cash them in, it had just hit it's all time high a day or two before so it was still right up there. Dumb luck I guess...was just at the right place at the right time!
Yeah, dividend stocks are good beyond the individual share price. I hold a fair bit of Ford stock (within the context of my total holdings) for just that reason. Non-dividend stock only has value on paper until you sell it.
Too bad Ford suspended their dividend. 🙁

Yeah, but I'll hang onto them for now. I think it will come back. They are making huge R&D investments, so it is wise for them to hold the cash.

kyfdx · January 2021

xwesx said:

kyfdx said:

xwesx said:

Sandman6472 said:
Fidelity for mutual funds and luckily, Enterprise also uses them for our 401K. Have a few stocks that I've held for awhile since I like the dividends they pay. My folks had bought some shares of stock in the company that bought out our company back in the mid 1960's and I was finally able to get them after my mom passed in 2005. Cashed those in and started investing on my own. Was lucky that when I did cash them in, it had just hit it's all time high a day or two before so it was still right up there. Dumb luck I guess...was just at the right place at the right time!
Yeah, dividend stocks are good beyond the individual share price. I hold a fair bit of Ford stock (within the context of my total holdings) for just that reason. Non-dividend stock only has value on paper until you sell it.
Too bad Ford suspended their dividend. 🙁
Yeah, but I'll hang onto them for now. I think it will come back. They are making huge R&D investments, so it is wise for them to hold the cash.

The stock has rebounded in price, nicely. Hopefully, they reinstate the dividend at some point. Suspending the dividend lowered my income by $900/yr.

Sandman6472 · February 2021

But I've also learned not to be greedy. When some of the stocks reach a certain high point, I do take some profits as I know eventually, they'll come back up again to maybe even higher numbers. Doesn't always work but just do like to take some profits every now and then on certain ones.

corvette · November 2022

Bringing this topic back from the dead to share an easy $150 if you don't already have a Fidelity account. Deposit $50, they pay a $150 bonus. Fine print says bonus needs to stay in the account 90 days before closing the account. Promotion ends 12/2. I did not read all of the fine print, but I think married folks might be able to open two separate accounts (one in each spouse's name) and claim two offers.

https://www.fidelity.com/go/special-offer/holiday

($150 won't pay for a car, but should be good for a nice set of floor mats.)

Sandman6472 · December 2022

Already have a Fidelity 401K, Roth IRA and a Traditional IRA. Which would be the best account for me to open? Thinking the Cash Management Account.

Sandman6472 · December 2022

Corvette, signed up with Fidelity today and will get that $150 in a few weeks. Thanks for the heads up!!

Sandman6472 · December 2022

Just wondering, are you other investors looking for growth stocks or ones that provide a good stream of dividends? My one co-worker is strictly looking for growth above all else but me, on the other hand, wants a good dividend payer. Above all else, I want a steady stream of dividends, monthly if possible, but do have some that pay it quarterly. I do usually re-invest so get more shares but, I decide that and have the income going into my checking account. Depending on what bills I have coming in and the price of the stock are the variables I use as to what to do with income. Did do some dollar cost averaging today on my newest stock choice as it's at a good price to get some more shares.
Was lucky enough to get into Apple a couple days before there last stock split. Had a good tax free muni bond get called early unfortunately so had a nice chunk of cash sitting in the brokerage account. A few days before Apple's stock split, used that income and bought some. Within a week, had four times the amount I had just bought which I felt wasn't too bad. But, do miss the tax free income I was getting twice a year from that muni bond and even though it wasn't callable until 2044, had no problem with it since if I wasn't around for some reason, the kids would still be getting that tax free income as they are the beneficiaries of my brokerage account.

Sandman6472 · December 2022

It's probably a good thing that one doesn't have to go through a broker anymore to buy/sell stock online. When I first started investing, it was like $7.95/trade, no mater how big or small. Now, one just needs an account and a computer to buy/sell and luckily the price is now $0.00...just makes things so much simpler to do. Like today, I've been able to dollar cost average a bit from home as prices are all over the place. And like that I can do it when I want to, and not having it done each time I get a dividend payment into the account. There are some months that I need that extra income for certain things yet some months, buying additional shares is the best thing to do. Bottom line though...I want to be in charge of that.
Using TD Ameritrade these past few years since they bought out Scottrade. Have had zero issues with them so far and plan staying the course in this volatile market. Am not fully retired yet and need my funds to work for me so when we do decide to fully retire, will be able to do so in good financial shape.

cdnpinhead · December 2022

I have a fairly simple approach which involves keeping no more than 110 minus my age in equities. The remainder goes into money markets or bonds. I'm down 9% for the year, which I consider decent these days. Paying someone (or something) 1 or 2% a year doesn't interest me at all. I've been doing this for 40 years. Add it up.

corvette · December 2022

My approach is similar to @cdnpinhead - I use low cost index funds and plan to decrease equity allocations with age. My work offers a free retirement planning service through Captrust where they spend about an hour going over your portfolio and projections for growth, future additions, Social Security, etc... I did that once and thought it is a nice fringe benefit, but the results were the same as most of the other popular online retirement planners.

kyfdx · December 2022

Mutual funds are great for retirement accounts. If you want to make the equity percentage thing even easier, you can use Target Date funds.

But, for brokerage accounts, I like dividend paying stocks. That way, I can control capital gains and dividends, reducing taxes.

Because when you turn 72, those RMDs have to go into some sort of taxable account. I'm dreading the tax consequences, then. I convert as much as I can to Roth, now, but it's a drop in the bucket, in the big picture.

stickguy · December 2022

My goal at 72 is to be getting massive MRDs and paying lots of taxes.

Hopefully by then they bump 72 (formerly 69.5) out some more!

stickguy · December 2022

My 401ks at this point are primarily in target date funds. Makes the balancing pretty easy.

kyfdx · December 2022

stickguy said:
My goal at 72 is to be getting massive RMDs and paying lots of taxes.

Hopefully by then they bump 72 (formerly 69.5) out some more!

Actually, it was 70.5 before.. now 72. I'd be shocked if that changed.

Yes, more money means more taxes. But, it's still good to mitigate it, as much as possible. I'm in the sweet spot, right now, where I can make decent Roth conversions, and still fall in the 12% Federal tax bracket. In that bracket, all long term capital gains and dividends are taxed at 0%.

stickguy · December 2022

oops. I just combined 59.5 and 70.5 and got 69.5. More embarrassing is that I spent a long time in that end of the business (and have run or checked more non-discrimination type testing than I care to think about)

I probably should have done some roth conversions years ago when it might have made sense but there was never a time (at least when I was thinking about it) when cash on hand for taxes, and tax bracket, lined up. Definitely don't now (at least the bracket part) but at least some years back we switched all the new contribs into being Roth (no more FAFSA filings help).

there should be a gap between retiring and filing for SS (at least there better be!) so will look to cram some conversions in there if possible.

kyfdx · December 2022

stickguy said:
oops. I just combined 59.5 and 70.5 and got 69.5. More embarrassing is that I spent a long time in that end of the business (and have run or checked more non-discrimination type testing than I care to think about)

I probably should have done some roth conversions years ago when it might have made sense but there was never a time (at least when I was thinking about it) when cash on hand for taxes, and tax bracket, lined up. Definitely don't now (at least the bracket part) but at least some years back we switched all the new contribs into being Roth (no more FAFSA filings help).

there should be a gap between retiring and filing for SS (at least there better be!) so will look to cram some conversions in there if possible.

My wife hits full retirement age in four months.. A little over 2 years, for me. But, our goal is to wait until we are 70 to draw SSA. We are both long retired from our full-time jobs.

With me still working, we can both contribute to our Roth, which is nice. Also, I convert as much as I can from a regular IRA, right up to the edge of the 12% tax bracket. I've been able to do that for the last six years, except for one year, where we sold a big real estate holding.

Michaell · March 2023

Three month T-bills eclipsed 5% today....

If inflation wasn't running higher than that, it might be a good place to park some extra money.

corvette · March 2023

I doubt it will or can stay that high, forever...

4.5% yield on Vanguard Federal Money Market. Sitting tight with my 2.375% ARM. When the rate resets in about 34 months, my payment should actually go down due to the extra principal I threw at it right after I refinanced.

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