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a 5% discount on the amount of stocks you buy each month is such an inconsequential amount, why even bother about it consider the mental strain of actually caring about this poo poo to that level. checking your brokerage account every day even though you're not going to touch that poo poo for 30 years. why, why, why
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Feb 25, 2020 18:24
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please knock Mom! posted:consider the mental strain of actually caring about this poo poo to that level. checking your brokerage account every day even though you're not going to touch that poo poo for 30 years. why, why, why The only reason I'm aware the market is down is the whinging happening on an internet comedy forum.
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Feb 25, 2020 18:29
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Astro7x posted:I will never understand why the stock market is not considered one big pyramid scheme. It depends on other people constantly buying in at a higher rate, and then selling years later for more people at a higher rate. You don't understand what a stock is then. The basics are though you own some of the company, get enough shares and you effectively run the company. Some stocks prices are pure speculation, sometimes a company targets a price of 300m and someone goes "nah I bet they made 350m" then when they only make 280m sell their position, this is the stock going down. Probably something with options too. This isn't the gambling thread, so all you need to know Index funds are drat safe. edit: to prove this to yourself you get voting rights with your stocks if you hold any that aren't an index. You should be able to see any up coming votes and do an electronic vote. You very likely don't know anyone on the board of directors and likely don't have enough shares to move things so it's best to just ignore this but someone wants your shares to vote, that's what makes them valuable. pixaal fucked around with this message at 18:34 on Feb 25, 2020 |
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Feb 25, 2020 18:31
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The problem is, a lot of people think that Stock Market is a couple dozen guys in suits at Wall Street Building who hop up and down in unison while chanting "Up, up, up, up!!" but sometimes a chant of "Down, down, down, down!" takes over, and this determines if money becomes worth more or less. In reality it is that plus you also have fractional ownership of businesses!
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Feb 25, 2020 18:33
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The only stock you should own outside an index is BRK. So you can attend uncle Warren's Omaha jamboree.
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Feb 25, 2020 18:38
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I mean, if I buy a bond expecting 4% coupons and suddenly earnings roll around and whoops, 3% coupons, I’m going to think that bond is less valuable. Why would a stock be different?
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Feb 25, 2020 18:39
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Astro7x posted:I will never understand why the stock market is not considered one big pyramid scheme. It depends on other people constantly buying in at a higher rate, and then selling years later for more people at a higher rate. Theoretically, the value of a company's stock is a reflection of the company's value (mainly, profitability, because that's easier to think about, though companies have value outside of their ability to make a profit). Increasing profit means the company has sold more or spent less, which GENERALLY means it's more valuable. Way more complicated than that, but it's all easier to think about if you assume that stock price = actual value. Astro7x posted:It just reminds me of stocks tumbling because of things like like "Well you said you were going to make $300 Million this year, and you made $280 Million." Rather than "wow, you guys made $280 million! Good job!" Because the stock price is "set" in anticipation of making $300 million. Buyers decide that they want to own stock of a company that made $300 mil, so they buy it with that assumption. When the company falls short of that number, it means the buyer overpaid. Astro7x posted:Like I don't understand why everything largely goes up or down the same amount all the time based on speculation. As a kid, I was always told to invest in a company you think will do good. Speculation begets speculation. People react to each other assuming that everyone else knows what they're doing. Astro7x posted:But it all seems kind of irrelevant, because suddenly people think "oh the corona virus is coming! Better sell all my shares in Twitter because people are going to... Tweet less?" Like it all makes no sense to me. Because everything is connected. Let's say Twitter's value is based strictly on ad revenue. Ad sales require ad buyers. Let's say that Apple is a big buyer of Twitter ads. Well Apple's supply chain is actually being disrupted by COVID-19. Apple can't sell as many iPhones. If Apple's sales go down, they can't afford to buy ads. So they slash their ad budget, meaning Twitter is selling fewer ads to Apple. Multiply that by all the other ad buyers that are impacted by COVID-19, and suddenly that ad revenue starts to dry up. Now Twitter is less profitable, so it's worth less.
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Feb 25, 2020 19:09
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What I’m willing to bet on is that capitalists are all-in on the sunk cost fallacy and will do everything they can to try and keep the market going on some capacity for decades. Let’s see if it works out.
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Feb 25, 2020 20:06
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Pollyanna posted:What I’m willing to bet on is that capitalists are all-in on the sunk cost fallacy and will do everything they can to try and keep the market going on some capacity for decades. Let’s see if it works out. the us isn't going to turn syndicalist or socialist so yeah the stock market is gonna be a thing for the foreseeable future even if every single Bernie policy gets enacted
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Feb 25, 2020 20:25
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Pollyanna posted:What I’m willing to bet on is that capitalists are all-in on the sunk cost fallacy and will do everything they can to try and keep the market going on some capacity for decades. Let’s see if it works out. Pretend I quoted every post you've made in the past week. I think your future self will thank you (as will your father if you end up supporting him in retirement) if you were to consume the following: Easy Mode: https://jlcollinsnh.com/stock-series/ Intermediate:  Your posts absolutely drip with misconception, misunderstanding, and generally bad strategies & mindsets. Please consider spending an hour on the link and, ideally, 10 hours on the book! It will keep you from losing your shirt and will make you money (lots)
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Feb 25, 2020 20:26
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Does Dollar-cost averaging still apply if I'm trying to invest into a non-tax advantaged account? Or should I dump in all the money at once? (I do this with my Roth).
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Feb 25, 2020 20:35
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Pollyanna posted:What I’m willing to bet on is that capitalists are all-in on the sunk cost fallacy and will do everything they can to try and keep the market going on some capacity for decades. Let’s see if it works out. Think about it this way. A) we stick with capitalism. A1)You'll benefit from investing and reaping the profit from your investments, or, A2)You'll live in a dystopian nightmare created by the excesses of capitalism. B) the revolution comes. B1)You'll benefit from the state providing your comfortable retirement, or, B2)we'll live in a dystopian nightmare created by the dictator-for-life in our one-party nightmare future. Under which of these options should you NOT invest your money? If A1 you win. If A2, your investments will help you not suffer the worst. If B1 you'll win. If B2, you'll be among the majority of Americans who have some investment for retirement, and they can't all be put against the wall, can they? Worst case scenario you give all your investments to the State and pledge yourself to the Beloved Dictator. The only risky scenario is B2, and it requires Americans to support the Revolution, which they're nowhere near doing just yet. I think if you want to hedge your bets, go ahead and invest, but also get some Bernie stickers on your car and start organizing a union at work. Probably that's enough.
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Feb 25, 2020 20:37
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Dollar cost averaging almost always underperfoms compared to lump sum investing. If you have money that you intend to invest, invest it.
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Feb 25, 2020 20:38
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My understanding is that the only reason dollar cost averaging "exists" is to make people feel better that they're not super-rich and can't afford to make big lump sum investments. I read somewhere that the math is total bunk for long-term investments, and that you should always invest your money as soon as you are able to. edit: Also consider that by dollar cost averaging, you're missing out on dividends.
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Feb 25, 2020 20:38
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obi_ant posted:Does Dollar-cost averaging still apply if I'm trying to invest into a non-tax advantaged account? Or should I dump in all the money at once? (I do this with my Roth). Dollar-cost averaging doesn't apply for long-term investing. It's a strategy for moving in and out of a single position while hedging against volatility risk: for long-term investing you are already hedging against volatility risk, and anything that involves not putting your money into the market as soon as you can is giving up on the expected long-term gains. Remember, the whole point of long-term investing is that you are betting that on average your investments will go up: why would you intentionally shorten the period in which your investments are in the market?
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Feb 25, 2020 20:39
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please knock Mom! posted:a 5% discount on the amount of stocks you buy each month is such an inconsequential amount, why even bother about it I get what you are saying. If I am going to buy anyways and have some freed up cash, why not. There really isn't any mental stain to it
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Feb 25, 2020 20:46
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DaveSauce posted:My understanding is that the only reason dollar cost averaging "exists" is to make people feel better that they're not super-rich and can't afford to make big lump sum investments. Not true. Dollar cost averaging is about avoiding the regret you experience if you invest all your available investment money last Friday. It's done for psychological reasons and as such it isn't valueless - if you have $X to invest, it's better to invest it in bites of X/12 monthly over the next year than not invest it at all because you're afraid of a crash. If you invest periodically as you have money available to do so, that isn't dollar cost averaging. Dollar cost averaging is explicitly when you have a lump sum of money available to invest and choose to invest it over a span of time instead of doing it all at once.
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Feb 25, 2020 20:56
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Dollar cost averaging isn't just a psychological tool. It's actually also a useful strategy for investors buying a single equity such as a stock who are concerned about short-term volatility affecting what they intend to be a medium-term investment. For example, if I want to buy some Acme and hold it for six months, I might ease into my Acme position over the course of a week or a month; this hedges against the possibility that the stock tanks right after putting in 100% of the investment. Similarly, that investor rather than choosing to sell on a particular day or at a particular price, might ease out of that position over the course of a day or a week or a month, to avoid missing out on a spike in price that might happen during that period. An individual stock can be expected to experience much more day-to-day or even hour-to-hour or minute-by-minute volatility than a large fund. And, the value of easing into and out of a position is higher for medium or short terms; with long-term investing in a very diversified portfolio, you're hedged against volatility by both time and diversification. With a single stock you are not hedged at all by diversification and your time hedge goes down the shorter your intended period of holding. This can compress all the way down to a day-trader averaging into a stock (say) once every minute or every five minutes with the intention of holding for a few hours or until just before market close, for example. That said, dollar-cost averaging is not the only or even necessarily the best way to hedge volatility in the short or medium term. You can hedge using actual hedges, for example: buy a stock and simultaneously hedge by buying a put option; wait a while, then sell the put. The period during which you held the put hedged against a sudden move in the position that forced you to sell before you had a chance to take advantage of the movement you expected in the longer (but still short) term.
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Feb 25, 2020 21:06
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GoGoGadgetChris posted:Pretend I quoted every post you've made in the past week. I think your future self will thank you (as will your father if you end up supporting him in retirement) if you were to consume the following: Seconding this post. That book is a great cash course on the fundamentals, to the point where I gift it to literally everyone who expresses an interest in investing
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Feb 25, 2020 21:14
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Leperfish posted:Dollar cost averaging isn't just a psychological tool. It's actually also a useful strategy for investors buying a single equity such as a stock who are concerned about short-term volatility affecting what they intend to be a medium-term investment. Ah, interesting. I don't buy individual stocks so I didn't know about this usage.
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Feb 25, 2020 21:18
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Not a Children posted:great cash course on the fundamentals Not sure that was intentional but nice.
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Feb 25, 2020 21:21
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DaveSauce posted:Because everything is connected. Let's say Twitter's value is based strictly on ad revenue. Ad sales require ad buyers. Let's say that Apple is a big buyer of Twitter ads. Well Apple's supply chain is actually being disrupted by COVID-19. Apple can't sell as many iPhones. If Apple's sales go down, they can't afford to buy ads. So they slash their ad budget, meaning Twitter is selling fewer ads to Apple. And this is already happening too. iPhones, iPads and Apple watches are back ordered anywhere from 1-3 weeks, which is super unusual for this time of year, and plus it’s not just the current models, but models like the iPhone 8 are back ordered. Which means lower sales, possibly loss of customers (if their phone is broken and they can’t get a new one, they switch carriers), and lowered income of the people selling said phones (both don’t have phones to sell, and if a phone is backordered people are even more likely to go online). So yeah, I can see the economies getting dinged around a decent bit due to coronavirus.
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Feb 25, 2020 21:22
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I need to take my father's advice of "I only look at my numbers when my monthly statement comes out." Seeing the numbers drop yesterday, this morning, and right now feels bad (but no, I'm not touching it).
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Feb 25, 2020 21:35
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I am grinding up all this New Investor Nervousness into a powder and just snorting it by the mile The recently-became-conventional wisdom is going out the window as people post essays on the importance of holding your age in bonds, how the "true" value of the S&P 500 is only 2,300, a 10% cash allocation is wise, etc I am going to buy all of their stocks
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Feb 25, 2020 21:38
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Maybe it's because I'm so far from retirement, but I just dgaf about my account. Numbers go down, who cares? They're just abstract at this point.
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Feb 25, 2020 21:45
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GoGoGadgetChris posted:I am grinding up all this New Investor Nervousness into a powder and just snorting it by the mile Look at this market timer holding cash and waiting for dips 
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Feb 25, 2020 21:47
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Kylaer posted:Look at this market timer holding cash and waiting for dips  I will buy their stocks through regularly scheduled payroll deductions and dividend reinvestment!!
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Feb 25, 2020 21:48
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Pls buy
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Feb 25, 2020 22:14
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I fully funded my Roth IRA for this year literally last week lmao Sometimes you just get got.
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Feb 25, 2020 22:19
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Not a Children posted:I fully funded my Roth IRA for this year literally last week lmao Same but last year’s too lol.
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Feb 25, 2020 22:21
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Always Be Funding. Or I guess, Always Be Investing.
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Feb 25, 2020 22:42
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Pollyanna posted:Same but last year’s too lol. You can fund last year's IRA now?
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Feb 25, 2020 22:47
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Nitrousoxide posted:You can fund last year's IRA now? Yup until tax day.
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Feb 25, 2020 22:47
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Residency Evil posted:Yup until tax day. Oh nice. I got just a bonus and had only put 500 into my IRA for last year. I assume I would need to contact Fidelity or whatever to tell them this is funding last year's rather than this years?
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Feb 25, 2020 22:49
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Mine is with Vanguard and when I go to fund it, there's a drop down to select which year
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Feb 25, 2020 22:50
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Residency Evil posted:Even with the ridiculous drop yesterday, it wasn't enough of a drop to give me the opportunity to sell anything for TLH purposes, even the lots I bought at the end of January. Several lots of my international index fund were red when I looked today. I exchanged them for the domestic total market fund.   I hope I did it right I'm on a decent amount of pain killer right now.
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Feb 25, 2020 22:53
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Nitrousoxide posted:Oh nice. I got just a bonus and had only put 500 into my IRA for last year. I assume I would need to contact Fidelity or whatever to tell them this is funding last year's rather than this years? Fidelity has a drop down to select the year you are funding
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Feb 25, 2020 22:56
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Looks like I'm the odd one out, I'm selling most of my investments. Hello cash money! ...because (simplified) I want to buy property "soon" and reading this thread and some other resources recently made me realise my timescale was way off and super risky, even before this week's demonstration. In hindsight I'm lucky it didn't backfire beforehand, but it still definitely beat my HISA. And don't worry, I didn't mess with the retirement account.
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Feb 25, 2020 23:47
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uvar posted:Looks like I'm the odd one out, I'm selling most of my investments. Hello cash money! Good for you on understanding an investible time horizon. This tumble it just a little sting, not the multi-year plan derailing event you are wisely protecting yourself against.
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Feb 25, 2020 23:59
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There’s no way I’m buying property for at least 5 years (houses are expensive + commuting into Boston sucks rear end) so the next best thing is save up for retirement.
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Feb 26, 2020 00:01
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