Investing General Discussion

Jysin · Mar 19, 2017

I'm convinced the way forward for me is Index Funds, but I am too scared shitless to invest anything right now. I spent the last few years playing individual stocks and did quite well last year playing the high market volatility when it would have wide swings month to month on completely irrelevant events like oil prices. I have been sitting on about $200k cash since December, but I do not think anyone expected to see this post-election rally. I feel like I am sitting on the sidelines missing all the action. This bull run can't go on forever.

Advice for someone sitting on cash?

Gravel · Mar 19, 2017

If your investing horizon is longer than 10 years, just get in now. Whatever volatility is in the market now will be irrelevant by then.

Time in the market > timing the market

You should also remember that something like 75% of the time, the market is trading within 5% of an all time high. And that people have been sitting on the sidelines since about 2012 when they originally thought "the market was overvalued." Meanwhile, if the market did have a 20% drop, those people in 2012 would still end up mis-timing (and missing dividends for 5+ years).

And finally, an interesting tid-bit, but if the market is flat for just 1 year, the PE ratio would actually be more in line with what the "overvalued" people think it should be.

Blazin · Mar 19, 2017

Jysin said:
I'm convinced the way forward for me is Index Funds, but I am too scared shitless to invest anything right now. I spent the last few years playing individual stocks and did quite well last year playing the high market volatility when it would have wide swings month to month on completely irrelevant events like oil prices. I have been sitting on about $200k cash since December, but I do not think anyone expected to see this post-election rally. I feel like I am sitting on the sidelines missing all the action. This bull run can't go on forever.

Advice for someone sitting on cash?

I'm in a similar situation, as long as you have a long term outlook buy the next dip, but it's quite likely you'll have to settle for as little as 3% we couldn't even muster 2% in the last round of weakness. If you really can't stand to be red then wait for 10% but there is a good chance that you'll be buying this exact level or higher. When the market is up Jan and Feb the last 29 times it has closed the year positive. We have not had a down 1% day in months it is bound to happen at some point. I would say be patient but not too patient. How is that for helpful advice!

I'm a nervous nilly and probably won't go all in without a retest back to SPY 220-225 range but if you are looking for cheaper than that I don't think it's going to happen until the next recession (if ever) which is likely at least 18 months out. We have never had a recession with the fed funds rate this low but as rates normalize a mild recession wouldn't surprise me at all. (late 2018-2019)

Jysin · Mar 19, 2017

Yea, I should have mentioned timelines. I work overseas (have for over a decade now) and this is essentially my pot of house / car money whenever I go back stateside. That could very well be in the next 2 - 3 years.

I have quite a lot more in 401k for retirement and that shit will just ride until retirement age.

Blazin · Mar 19, 2017

Jysin said:
Yea, I should have mentioned timelines. I work overseas (have for over a decade now) and this is essentially my pot of house / car money whenever I go back stateside. That could very well be in the next 2 - 3 years.

I have quite a lot more in 401k for retirement and that shit will just ride until retirement age.

With a 2-3 yr time frame I think caution is more than justified. We are indeed in the later stages of a bull run. It might have 30% left in the tank and it might not. Buy some short term A+ corporate bonds and at least get 2%. I personally like VCSH

Blazin · Mar 21, 2017

Market biggest red since election, still too early if it's a one and done deal or the beginning of a possible correction. We are only 2.5% off the all time high

Jysin · Mar 21, 2017

Yea, been watching it all day. Hoping for a continued correction!

Myst · Mar 28, 2017

I have been wanting to invest 5 000$ on the stock market for the past year or so. I have never bought any stocks, nor do I have a good knoweldge about the stock market. I am getting more and more tempted to invest now that Canada has annouced the legalization of Marijuana in 2018. That said, the more research I do, the harder the decision of picking the right company becomes. The sale of recreational marijuana will be controlled by the Provinces, which I assume ( I might be wrong) each Province will have a main company supplying the demand.

I am looking for any advice, link to information or anything to help guide me in the right direction. I know there is always a risk no matter the situation.

Tinycoffin · Mar 28, 2017

Myst said:
I have been wanting to invest 5 000$ on the stock market for the past year or so. I have never bought any stocks, nor do I have a good knoweldge about the stock market. I am getting more and more tempted to invest now that Canada has annouced the legalization of Marijuana in 2018. That said, the more research I do, the harder the decision of picking the right company becomes. The sale of recreational marijuana will be controlled by the Provinces, which I assume ( I might be wrong) each Provice will have a main company supplying the demand.

I am looking for any advice, link to information or anything to help guide me in the right direction. I know there is always a risk no matter the situation.

You can get a pretty good snapshot of the stocks here The Marijuana Index - Cannabis Stock Quotes and News - The Marijuana Index

I'm American so not 100% sure on what the laws look like in Canada. My biggest issues with getting these stocks right now is the risk is super high and it's all mostly 100% speculation. Items such as taxes, state and local laws are not 100% clear in all areas. There also isn't a ton of regulation on how it can be grown, inspections, licenses etc... The other wild card in my mind is big pharma and how they will work to either expand or limit the production outside of the recreation space. If you do chose to invest in any of the companies on the index I would research their accounting methods and really research the people running the companies, a lot of these people have some pretty shady and questionable backgrounds.

With that said I'm very interested in finished products such as high-end edibles such as Defonce Welcome I think these types of products are going to be huge winners as pot moves up the economic scale. I haven't found a good list of public companies in this space yet, most of it is still private VC.

Intrinsic · Apr 4, 2017

Jysin said:
I'm convinced the way forward for me is Index Funds, but I am too scared shitless to invest anything right now. I spent the last few years playing individual stocks and did quite well last year playing the high market volatility when it would have wide swings month to month on completely irrelevant events like oil prices. I have been sitting on about $200k cash since December, but I do not think anyone expected to see this post-election rally. I feel like I am sitting on the sidelines missing all the action. This bull run can't go on forever.

Advice for someone sitting on cash?

I'm in a somewhat similar situation as you, but living stateside. I have plenty committed to 401k, IRA, savings (at like 1.5% or some shit), but am sitting on cash that I'd like to have some type of growth yet still be liquid and accessible if needed. Not that I'd ever -need- quick access to this amount, especially considering the savings available... I think I'm hung up on the mental aspect of it and not having it sitting there. I should probably stick it somewhere on a 3 - 5 years plan and not stress.

Gravel · Apr 4, 2017

Just how liquid are you talking?

Throw it in a Vanguard fund. It doesn't even have to be an index fund, choose a fucking bond fund. As long as you can float yourself for a week with credit cards or something, you should be able to access the account.

It's not as liquid as cash, but it's close enough.

Cad · Apr 4, 2017

Gravel said:
Just how liquid are you talking?

Throw it in a Vanguard fund. It doesn't even have to be an index fund, choose a fucking bond fund. As long as you can float yourself for a week with credit cards or something, you should be able to access the account.

It's not as liquid as cash, but it's close enough.

This is true.

Picasso3 · Apr 4, 2017

You wont get it in a week when war breaks out though

Intrinsic · Apr 4, 2017

Gravel said:
Just how liquid are you talking?

Throw it in a Vanguard fund. It doesn't even have to be an index fund, choose a fucking bond fund. As long as you can float yourself for a week with credit cards or something, you should be able to access the account.

It's not as liquid as cash, but it's close enough.

It doesn't at all, I was just rambling. I have basically no expenses or debt other than regular living, same with my wife. I was just frustrated reading the thread and realizing I have money sitting here doing nothing for me other than looking good when I check my checking account.

Gravel · Apr 4, 2017

Picasso3 said:
You wont get it in a week when war breaks out though

The "war breaks out" scenario means you've got way more to worry about than your investments. If we get to the point where you can't access your investment accounts, it means the economy is gone and I hope you invested in guns and ammo.

Jysin · Apr 5, 2017

I took Blazin's advice and dumped ~85% of my cash into VCSH. It's Vanguard's short term corp bond fund. It's basically paying monthly dividends far better than any bank is going to give you, plus the recent market instability has boosted the share price a small quarter percent since I bought it a few weeks back. Happy to sit on this until a clearer market picture emerges. Hoping we see a correction sooner rather than later.

Fogel · Apr 5, 2017

And what if that correction is still a year+ out? Even that little blip a few weeks back didn't really go anywhere as people were proclaiming it to be the correction they were all waiting for. You said it yourself that index funds were your future, so stop waiting for the bull to stop and just get in. I bought in near the end of last year and still dumping in through till now as we speak. Even if we have a correction tomorrow I know in a few years that'll all be erased either way.

Blazin · Apr 5, 2017

Jysin keep an eye out here short term. The reversal today could mean buying opportunities in the near future. The recent pullback was rather mild and at under 3% and appeared to be over. Market started strong today and had gaped up and then turned on its heel with FED minutes release and gave it all back. If we gap down tomorrow means we should be looking at a better discount. This bull market has been about as resilient as you get so we may not get much of a pullback, personally I would not sit waiting for 10% plus. I will start nibbling at down 3% and just start increasing buy size as it drops so that if it turns on a dime and heads back up at least you get some skin in the game.

VCSH has had a nice run last two weeks and trimmed some off this afternoon. It pays .15 a month and I was up .50 in capital appreciation (in just 2 wks) so I took some gain to get ready to buy some VOO and/or VYM

Jysin · Apr 6, 2017

Fogel said:
And what if that correction is still a year+ out? Even that little blip a few weeks back didn't really go anywhere as people were proclaiming it to be the correction they were all waiting for. You said it yourself that index funds were your future, so stop waiting for the bull to stop and just get in. I bought in near the end of last year and still dumping in through till now as we speak. Even if we have a correction tomorrow I know in a few years that'll all be erased either way.

Oh, I get it. You probably didn't catch my earlier posts but this VCSH pool is short term money. I am looking to make a significant change in job / country of residence by the end of the year. This will be house money if I decide to go back stateside. I am not willing to risk this pool of cash on the broader market on such a short time horizon.

My long term investments (401k), etc have all been sitting S&P and Target Date and will remain there until retirement.

Picasso3 · Apr 6, 2017

My wife an ally high yield savings getting 1%. Wonder if i should try to convince to move to trade account. Vcsh doesn't seem much riskier, but it also won't be that much more interest.
She has investing ptsd because her mother apparently tried trading and about lost the farm.

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