Sanrith Descartes
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It's why I am always amazed that screenwriters pen really shitty movies. You dont need to make shit up. Real life is more than enough for a good script.
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Investing General Discussion
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Guest, it's time once again for the massively important and exciting FoH Asshat Tournament!
Go here and give us your nominations!Who's been the biggest Asshat in the last year? Give us your worst ones!
Sanrith Descartes
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In a fee-less investing world, only the crazy will still be paying fees.
markets.businessinsider.com
Charles Schwab says it will cut online stock and ETF fees to zero — and all the major brokers are getting clobbered
The competing brokerages TD Ameritrade and E-Trade plummeted roughly 20% apiece amid the latest escalation in the exchange pricing war.
markets.businessinsider.com
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sleevedraw
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In a fee-less investing world, only the crazy will still be paying fees.
Charles Schwab says it will cut online stock and ETF fees to zero — and all the major brokers are getting clobbered
The competing brokerages TD Ameritrade and E-Trade plummeted roughly 20% apiece amid the latest escalation in the exchange pricing war.
I wonder how they plan on staying profitable. The only two moneymakers left that I can think of are wealth management and the expense ratios on their first-party ETFs, and Fidelity is squeezing them pretty hard with FZROX and their other no-ratio ETFs.
Sanrith Descartes
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I looked at the "big" ETFs. Even at 3 basis points they bring in a fuckton of cash because of the AUM. That's all I can think of.
I read somewhere it's between 3-4% of their overall revenue. Getting people in the door gives them an opportunity to cross sell them managed products. They also make money on the flow order of the trades themselves. It's how RobinHood makes a chunk of their money. Though that may not last forever.
www.investopedia.com
How Robinhood Makes Money
Robinhood generated most of its revenue from interest in 2023 due to the favorable rate environment
sleevedraw
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Looks like TD Ameritrade has "Me too!"ed on no commissions. Schwab and TD were the two most expensive of the discount brokers, so if they've both gone to zero, I anticipate it'll only be a matter of time before Fidelity, E*Trade, and Ally follow suit.
Merrill doesn't really need do much because something like 75% of their trades are already commission free due to BofA Preferred Rewards. If anything, they might make it so that anyone in Preferred Rewards has unlimited free trades rather than tiering it by level.
Merrill doesn't really need do much because something like 75% of their trades are already commission free due to BofA Preferred Rewards. If anything, they might make it so that anyone in Preferred Rewards has unlimited free trades rather than tiering it by level.
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Sanrith Descartes
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I manage my Mom's account with Merrill. While I personally dislike them, she has so many free trades on her account I cant justify moving it to another brokerage. Their free trade reward thing is pretty solid.
Sanrith Descartes
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WeWork's debt got downgraded to CCC+ after they cancelled their IPO. With the insane amount of real estate their own and leveraged this is something to keep an eye on.
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Siliconemelons
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my 2 funds in Stash today lost all their gains in the past ~6months
taking all my will power not to sell it at "flat" and just to let it be.
I know this is small peanut dust to all the big boys on this forum ;-)
taking all my will power not to sell it at "flat" and just to let it be.
I know this is small peanut dust to all the big boys on this forum ;-)
Sanrith Descartes
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Are you setting stops? If you lost 6 months worth of gains then I am guessing no. The market goes up and down. Are there technical reasons for your losses today or is it the tide lowering all boats?
sleevedraw
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The research is great, too; I love the Portfolio/Fund Story thing they have; makes going over all the basics like expense ratio, volatility, whether or not it has a short-term redemption fee, etc. super-easy. Could see why professionals might like a bit more depth, but for a layman, it's definitely the easiest to understand of all the brokers I've tried.
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Sanrith Descartes
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It is nice. I just find the Merrill guys to be dicks. When they were managing my mom's account they did some investment decisions to their benefit and not hers. Shocking I know. That's why I took it over.
The Fidelity (what I use) active trader pro software is pretty nice.
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Siliconemelons
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Just the standard market "omgerd Trump I'm peach mint!" I am sure..
It's in STASH app- I guess like robinhood app? Its a few $ a month no trade fee but also not really like "live" and it's usually funds...
It's like 5k in each- one is a dividend fund and the other is "defending America"
It's not my retirement or anything- but it was +1k now it's +10$ and the 40ish$ I have in dividends that it just paid out.
I most likely need to look for a better system than Stash
Sanrith Descartes
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Get off the apps. With that amount, or anything more than 2500$ or so, you can open brokerage accounts with all the majors for no fee to open. They all have good apps for trading. My personal preference is Fidelity, but Schwab, TD, Etrade, Merrill etc are all solid. Unless you are doing buy and hold long term, set stops and roll them up as your positions increase. 15 and 20% are common.
There are going to be those days when you get fucked and stopped out and then it instantly does a 180 and runs up. It's the game. But those stops are designed to prevent what happened to you and seeing large increases vaporize in a single session of bad news.
None of this applies if you are buying and holding for long term. You will see many of these cycles and just consider them buying opportunities.
Siliconemelons
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No, none of this is "long term" - the wife and I have 403b's or whatever private education 401k's are called. I also have a Florida Retirement System pension that I converted from "Pension" to "investment" when I left my state college job- all calculations had it "even" in total payout as a pension for 25 years vs total investment value... She has a smaller FRS account - but from pregnancy she was on a leave of absence and didn't fully vest... but apparently we /can/ buy out the time as that is a qualified leave of absence and then she can vest that account and have a little pension when she retires. We are about 6-7% our contribution and a match from employer on the retirement so 10-15ish %. As we get raises (small ones...remember education) we tick up the retirement 1% or so.
I was using STASH because it was fairly liquid - if I needed the money, it could sell it and have it back in my bank within 2-3 days.
What investment account would you all suggest? I looked at Schwab and it looks to be "free" for their "500" ETF's and then 4-7$ for other stuff.
I have an etrade account because the place I was using was bought out a few times... lol... I used it for penny stocks...whew that was a ride I never will return to... anywho I have some account somewhere that has some BlackBerry stock and some leftover penny stock that would cost more to sell than not lol.... suppose I will find that and see what that place offers.
Sanrith Descartes
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I would start with finding out who holds your retirement accounts. If it is a big firm consider opening a brokerage account with them. You are already considered a customer with them. They will also factor in your retirement values when they look at you as a client. That is how I ended up with Fidelity. If it isnt a big firm you can consider transferring it to a big firm where you want to open a brokerage account. Again more funds together means you get treated better.
Each big firm has ties with ETF funds and provide commission free trades on them. Expect about 4.99 or so in commissions for non-option trades.
Gurgeh
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If you look up the documentation of the ETF, you'll notice that most (at least ALL those that I have checked) mention that there is a "counterparty risk", they are lending stocks. I've looked up Amundi for example, and all their physical tracker are lending stocks, 25 to 45%. It is a risk as if whoever they are lending the stock to bankrupt, they lose the stock. This can be bad, because there is also a liquidity risk. Some of the stocks they own aren't traded in large quantities, meaning if a lot of people are trying to sell, there is a problem, so in case of turmoil on the stockmarket you might not be able to sell as you'd like to, not only because of the direct liquidity risk but also because they're lending up to 50% of the stocks. And you'd better hope that whoever they're lending to isn't going down, or you lose an extra 50% or more.
Synthetic ETF are the same, but it's pretty much 100% that is exposed to counterparty risk, and liquidity is probable much worse than physical ETF.
I know that in here it's "get an ETF you dumbass", but to me it's really starting to be a concern when such a large part of the trading is done through them, and especialy only on an handful of indexes. Here's an illustration of why it's starting the be concerning :
Equal weight S&P 500 is increasingly outperforming S&P500, my opinion is that it's because too many people are trading exactly on S&P500, which would result in overweighted stocks in the S&P500 to be overvalued.
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Sanrith Descartes
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There is a lot to be said for equal weight SP500. The size has gotten so skewed at the top that cap weighted ETFs really feel like you are investing in like 10 stocks.
Gurgeh
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Which wasn't much of a problem until ETF trading became nearly 50% of the market in the USA. You're not diversified if you trade the same shit as 50% of the market.
Which makes the counterparty risk significant. ETF will lose more than the index if Banks start going under. Possibly.. 100% for a synthetic ETF.
Can you trust your Bank to not have lended the maximum amount of shares they allow themselves to, to a Chinese Bank.. And even if the USA are doing fine you'll have lost 25% to 70% for physical ETFs and 100% for synthetics.
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I've got some extra money from my bonus this year and I was considering using it to day trade. Basically I'd like to make some extra money and kill some time at work. My job is boring so if I can find something to fill the time that would be nice. I have no issue spending time learning first before going live. The only experience I have with stock, is picking a few long term dividend stocks. I dabbled in forex about 17 years ago but didn't have the time, patience, or capital to make it work. I've considered picking it back up but figured I'd see what is out there.
I already have money invested in some long term dividend stocks and a managed account with Merrill Lynch. My retirement account is paid for by my employer and I have no debts other than my house, so this money is literally sitting idle.
Having said all that, any suggestions/ideas/starting points for where to put this money to work without reading through this whole thread? I have about $40k just sitting around.
I already have money invested in some long term dividend stocks and a managed account with Merrill Lynch. My retirement account is paid for by my employer and I have no debts other than my house, so this money is literally sitting idle.
Having said all that, any suggestions/ideas/starting points for where to put this money to work without reading through this whole thread? I have about $40k just sitting around.