Investments

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tvenuto
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Investments

#1

Post by tvenuto »

So a thread on the General forum got started asking if knives are a good investment vehicle. It's clear to most that there are better investments out there, and I got the idea to see what people are into.

I've recently gotten to the situation where it makes sense to start investing cash instead of letting it sit in a savings account. What a time to get into the market! Seems like it was whipsawing crazily for the past two weeks.

So, what do you invest in purely for returns? Stocks? Bonds? Index funds? Have any particular strategies that you want to share? Companies that interest you? Companies that are hot right now but that you don't like for some reason? Companies that took a hit but that you like to rebound? Companies that you think have farther to fall? All investment chat welcome!

I'll start:

I've recently been pretty fed up with all the executive backscratching and abuses that I've been seeing. Sexual predators being given payouts to leave quietly. CEOs doing illegal things and leaving with their golden parachutes. What do all these people have in common? They're part of largely male (if not exclusively male) good ole boys clubs that all cover each other's butts. So, I found an index fund that invests in companies with gender diversity in upper management (ticker: SHE). My thesis is: a woman is far less likely to get an upper management job due to her last name, or because she was in the same frat as 3 guys on the board. She's also far less likely to be involved in a sexual scandal with her subordinates, and far less likely to tolerate that from other key members of management. As a result, companies run by women will spend less resources caught up in all that nonsense. We'll see how that shakes out.

Canada just legalized recreational marijuana, but I'm staying well away from that for now. Companies with no track records with insane valuations to their earnings. Not into buying lottery ticket stocks.

Staying away from Netflix for now. I know that people have made millions on that one, but Disney is jumping into the streaming game, and they have been making content for a lot longer than Netflix (and have deep pockets to buy more). I'm actually staying away from the FAANG group all together. I know one or two of those will continue to rise but I can't be sure which. I think that especially facebook and google could be facing some regs or antitrust in the near future. I could be wrong on this but right now I'd rather diversify into a few different things than put all my eggs into this basket.
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The Deacon
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Re: Investments

#2

Post by The Deacon »

I don't play the market but, before I retired nine years ago, I took part in a "deferred compensation" plan my agency offered for about ten years. My contributions were invested in several mutual funds which I feel have all done well. To the point that, even after taking the minimum required distributions for the past two years and the effects of the market downturn this past week, it's still worth roughly three times as much as my total contributions.
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tvenuto
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Re: Investments

#3

Post by tvenuto »

The Deacon wrote:
Sun Nov 04, 2018 9:42 am
I don't play the market but, before I retired nine years ago, I took part in a "deferred compensation" plan my agency offered for about ten years. My contributions were invested in several mutual funds which I feel have all done well. To the point that, even after taking the minimum required distributions for the past two years and the effects of the market downturn this past week, it's still worth roughly three times as much as my total contributions.
Perfectly timed on your part. The market, prior to last week, was on a 9 year streak of steady gains that was unprecedented.

My life, by contrast, has been a series of ill-timed financial moves. Were I born 10 years earlier or 10 years later, my net worth would be 3-5 times what it is now. Oh well, you do what you can. When's the best time to plant an oak tree? 50 years ago. When's the second best? Today.
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Re: Investments

#4

Post by The Meat man »

Right now, I don't do any investing outside of my IRA. Got money in a couple different mutual funds.
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demoncase
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Re: Investments

#5

Post by demoncase »

I do have a couple of investment accounts (one low risk/zero tax/low returns and a smaller one with high returns/higher risk)- and a stakeholder pension.

My advice on investment comes from all the things I wouldn't invest on:
1. Art
Buying art purely as an investment is the ultimate gamble- Market tastes and relative popularity drive price.
Yep, a recognised Rembrandt is always going to be worth big money.
But buying or collecting relative cheap art today that you hope will appreciate is a recipe for disaster.
And let's not get into when a market gets flooded with fakes....

2. Jewellery
Like Art, tastes change and value changes.....A great example if Victorian jewelled brooches- these used to go for £20-50 at most. Now they are 10x that due to tastes changing.
Yes, pure scrap value tends to increase. But scrap value of the gold in a Rolex is nowhere near the cost of the watch or the necklace itself.
Also- when it comes to expensive watches- you're also going to need to drop £100-300 every year or two on a service to keep it running.

3. Cryptocurrency
Too opaque and too volatile.....and I have a lingering suspicion that it's a long con type scheme.
Plus there's a new one every day.
I'm sure some clever people have and are making money out of it- but I'm risk averse and wary to boot.
Warhammer 40000 is- basically- Lord Of The Rings on a cocktail of every drug known to man and genuine lunar dust, stuck in a blender with Alien, Mechwarrior, Dune, Starship Troopers, Fahrenheit 451 and Star Wars, bathed in blood, turned up to eleventy billion, set on fire, and catapulted off into space screaming "WAAAGH!" and waving a chainsaw sword- without the happy ending.

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sonoma
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Re: Investments

#6

Post by sonoma »

I like stocks and a few mutual funds.I was fortunate to get into Netflix at $20.00 a share back when they sent you dvd's in the mail to watch.Also a few oil stocks like Exxon and Occidental that give a good dividend.I do have a couple of weed stocks that I have made money on but they are very volatile and not for the faint of heart.I bought home depot several years ago at 35 a share and it hardly moved for 3 years and I was about to sell it then slowly it climbed to a little over $200.00 per share before I sold.
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tvenuto
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Re: Investments

#7

Post by tvenuto »

sonoma wrote:
Sun Nov 04, 2018 4:44 pm
I like stocks and a few mutual funds.I was fortunate to get into Netflix at $20.00 a share back when they sent you dvd's in the mail to watch.Also a few oil stocks like Exxon and Occidental that give a good dividend.I do have a couple of weed stocks that I have made money on but they are very volatile and not for the faint of heart.I bought home depot several years ago at 35 a share and it hardly moved for 3 years and I was about to sell it then slowly it climbed to a little over $200.00 per share before I sold.
Yea, the people I listen to say: "don't put money into a stock that you foresee needing in 3 years." Amazon is another story like that, looked promising at the outset, plummeted to like $5 after the tech bubble, and a lot of people jumped ship, to their eternal regret surely. Actually my first stock investment was my dad telling me to buy texaco in HS in like 1999. They were bought by chevron, and as you mention the oil companies pay a good dividend and it's quadrupled in value from the original investment (which was modest), but I bought it and haven't touched it for almost 20 years with the dividends just recycling back in that whole time.
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Re: Investments

#8

Post by sonoma »

Warren Buffet said I wouldn't hold a stock for 10 minutes if I wouldn't hold it for 10 years.There is a lot of truth to that.When facebook had its IPO it was at 35 or 38 dollars a share.I bought 200 shares at that time, then over the next few weeks it dropped to 21.So I bought 300 more shares.Then a few months ago it got close to 200 per share and I got out of it.I am not rich but I have been pretty fortunate with the stocks I have bought in the last 30 years.C.D.rates are just now getting to around 3% and that doesn't really keep up with inflation.When I make a profit I put that in something pretty stable.
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shunsui
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Re: Investments

#9

Post by shunsui »

One month T-bills are paying a bit less than 2.25 %.
Two month T-bills are paying a bit more than 2.25%.
Probably better than your bank is paying you for checking or savings accounts.

No state tax and if things go south, the Gov pays back all T-bills before the first FDIC account.
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Re: Investments

#10

Post by cabfrank »

So T-bills are fully insured? It's not that I have a lot to invest, I'm just tired of getting no interest at all.
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shunsui
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Re: Investments

#11

Post by shunsui »

They're relatively safe. I'd imagine If things went that bad, the money you got back wouldn't be worth the money you put in due to the Gov printing a lot of new money.

It certainly beats the alternatives though.

It's easy to set up a simple t-bill ladder by buying a one month bill, a two month bill, and a three month bill. Then you just buy a new 3 month bill every month as the next t-bill matures. You get a little more interest with the 3 month bill and renewing each month you would be taking advantage of rising rates if the Fed keeps raising the bar.
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Re: Investments

#12

Post by cabfrank »

Thanks for that info. It sounds like something to check into.
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tvenuto
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Re: Investments

#13

Post by tvenuto »

Yea obviously it's not guaranteed to but simple index funds beat 2.5% all year. Although I guess if you wanted to have cyclical liquidity like the system you were talking about it could be useful. Like if for some reason you want the cash you just don't buy back into the T-bill ladder.

As you mention it's absolutely more than your bank is paying for a savings account. This is the main reason for me looking into investments. I've finally gotten to the point where cash is accumulating and I don't want it sitting around doing nothing but losing value. Being relatively young, I won't need the money in the short term so I'm less risk averse, and can hold onto something for 5+ years if need be. I find it's incredibly instructive to bounce back and forth between 1 year and 10 year graphs of a stock. Often your impression of how the stock did changes entirely.
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Re: Investments

#14

Post by cabfrank »

My concern is that, like you, all of my investments, both bought and sold, have been at really bad times. Coulda shoulda woulda, didn't. I'm really worried about getting in at the top, again, and I'm definitely not the gambler I used to be.
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Re: Investments

#15

Post by JD Spydo »

I'm kind of surprised that none of you have mentioned precious metals or strategic metals as an investment :confused: One of my uncles did pretty well in that category. And there are all kinds of commodities/options strategies that are available. There are now some very interesting mutual funds in the areas of precious metals.

Also I find it kind of strange that you rarely ever hear of municipal bond investments anymore. Years ago I had a mutual fund with muni bonds and it did quite well during a really down market at one point.
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tvenuto
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Re: Investments

#16

Post by tvenuto »

JD Spydo wrote:
Thu Nov 08, 2018 6:50 am
I'm kind of surprised that none of you have mentioned precious metals or strategic metals as an investment :confused: One of my uncles did pretty well in that category. And there are all kinds of commodities/options strategies that are available. There are now some very interesting mutual funds in the areas of precious metals.

Also I find it kind of strange that you rarely ever hear of municipal bond investments anymore. Years ago I had a mutual fund with muni bonds and it did quite well during a really down market at one point.
All good points. Stocks and bonds are a bit like yin and yang, which is an oversimplification but not a bad way to think about it. We’ve been on quite the good run for the stock market so bonds recently have not been very attractive. So it’s not strange no one is talking about bonds. And I’m sure people are, just not your average Joe casual investors.

Metals are another similar one, when inflation gets hotter metals are good because their value tracks that basically. We’re not going to suddenly discover 3 tons of gold somewhere, so the supply is relatively stable. Also it’s a place people run when everything else is swinging too much due to that stability. Pretty sure you could have made a killing in metals before the housing crash. I do have a position in a gold mining company, which partially gets you exposed to the price of gold with the hedge that you’re also investing in a company that can succeed even with weaker prices (or conversely: fail despite strong prices). I think if I was going to invest in the metal directly I’d want to actually possess the physical article. May as well hedge against a full technology meltdown while I’m at it!

My financial woes were mostly due to the housing market and my timing starting a business. And “woes” are relative, I’ve never been hungry (or wanting for knives). The short story is my money was tied up in the opposite thing it should have been at every stage of my adult life. But, it was all a learning experience, and there was no way to know at the time. And I think that’s the big overall lesson: don’t get jaded! You can lose big in the past but that doesn’t mean opting out now is a good option. Fortune favors the bold!

I used to tell people at my gym: you can work out and risk an occasional injury or you can sit on the couch and be guaranteed to be sick fat and depressed. Investing is like that: take some considered risks and get burned occasionally or leave cash in the bank and be guaranteed to lose value over time. Now, obviously risk tolerance changes with time (in both) and so should your approach (in both).
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tvenuto
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Re: Investments

#17

Post by tvenuto »

And to be clear, I don’t consider myself an expert, the above is just my general understanding. If your understanding is different please share.
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Re: Investments

#18

Post by TomAiello »

If you are really interested in equity (stock market) investing, you should read this: https://jlcollinsnh.com/stock-series/

It's really long, but the bottom line is to save as much money as you can and keep plugging it into broad based index funds (the author recommends VTSAX, I think), and more or less ignore everything else. Saves time, headache, stress and money, and beats 99% of all individual stock pickers in the long run.
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Re: Investments

#19

Post by JD Spydo »

TomAiello wrote:
Thu Nov 08, 2018 9:44 am
If you are really interested in equity (stock market) investing, you should read this: https://jlcollinsnh.com/stock-series/

It's really long, but the bottom line is to save as much money as you can and keep plugging it into broad based index funds (the author recommends VTSAX, I think), and more or less ignore everything else. Saves time, headache, stress and money, and beats 99% of all individual stock pickers in the long run.
Before I got medically, financially shipwrecked back in 2009/2010 I had done pretty well overall in the stock market. I used the "Investor's Business Daily" newspaper as a good source for timely information. One of my late uncles who died about 5 years ago who was really good at playing the "options markets" ( puts & calls) and he really had a talent for picking those out. He told me that he got a lot of good information from "Barrons" magazine.

For the average investor you really can't go wrong with "no-load" mutual funds. We have one of the very best in that category here in Kansas City called American Century investments ( formerly 20th Century).

If I were to get back in at this time I would still go with precious metals>> particularly silver because there are a lot of new uses and markets for silver opening up particularly in the medical field.
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Re: Investments

#20

Post by shunsui »

Back when you could just park money in a Tax Free Municipal Money Market Fund, get 4% Federal tax free and mostly State tax free (depending on whether the fund manager was doing his job right).

These days Money Market Funds have big issues for investors due to new regulations.
I'm lazy so you read it yourself:

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