Investing 102

[GregWeld]

Originally Posted by toy71camaro

Welcome Tyler!

I unfortunately don't have the answers to your questions.

But, I dont base my actions based on what Greg does. He is in a different situation than most of us. I am investing for long term retirement. So short term ups/downs dont matter a whole lot to me. He is investing for short term gain (his income) and sustained investing for his future income.

You'll learn as you read through these pages that "Timing" the market isn't very successful. Just look at today for example. The market dropped ~2% yesterday. My investments took a good hit (worse one i've seen since i started this). However, today, its back up. and one of them (KO) is up 5+% today. I would of likely "missed" that if i would have been trying to time the "low point" of the market, rather than just getting in whenever i could.

Good luck!

SUPER SUPER GOOD POINTS!!!!

[GregWeld]

Originally Posted by Tyler E

Question from the peanut gallery:

With the summer doldrums on the horizon along with the rumors of the fed exiting QE, which stocks or sectors are going to get hit the most by these two events?

I haven't been in this long enough to have seen either play out in the past, but if Greg is getting his ducks in a row, I'm paying attention.


P.S. I'm still reading and learning. Thanks to everyone for keeping this thread going.

Tyler --- #1 I didn't sell any long term positions -- I sold two stocks where I park cash....


#2 --- We'd need to know your time horizons and what kinds of account(s) you're talking about.... because if they're long term retirement accounts then as Albert stated... there's no need to be worried about "this summer" etc.


So without talking dollars --- just give us a clue about your investing goals - and time frames etc.


I'm leaving for a week plus on a nice car road trip so may not be on much.

[Tyler E]

Greg, I'm 35 and investing for retirement. I don't yet know what age that will be. I hope before 65. I'm working hard to make that happen.

As a budding long term investor, "this summer" isn't going to mean much for me, and I realize that. My question was more for learning. Maybe I asked incorrectly.

You wrote a few days ago:

It "appears" that the FED is readying the market for their inevitable exit from QE (easing) of interest rates... and I want to be AHEAD of that game. When you couple the usual "sell in May and go away" --- and the possible -- note possible -- reduced FED QE this summer.... I want to trade when I want to and lock in a nice gain.


I read into your statement that you see a good time for buying. In your opinion, what do you see happening? Anything the long term investor needs to be concerned or excited about?

[Tony_SS]

Originally Posted by Bucketlist2012

Tony SS. There is no questionmark about the manipulation of the PM market...

The Big banks and the FEDS are for sure manipulating the price. I did not sell at the peak but I did put in a large sell order on Thursday..Pretty much listening to Goldman Sachs. They told us they were about to lower the price...And boy did they..

That is why PM's are not an Investment...I do hold them but it is not really a wealth builder.. Real Estate and Stocks are..

You sold your 'paper holdings' ? I still think holding physical is valuable... at least the Queen agrees.

[Bucketlist2012]

Originally Posted by Tony_SS

You sold your 'paper holdings' ? I still think holding physical is valuable... at least the Queen agrees.

Tony....Yes some ETF's....I just lightened up my positions in PM's. I will still continue to hold some paper ETF's in Canada and also keep all physical Metals...

[GregWeld]

Originally Posted by Tyler E

Greg, I'm 35 and investing for retirement. I don't yet know what age that will be. I hope before 65. I'm working hard to make that happen.

As a budding long term investor, "this summer" isn't going to mean much for me, and I realize that. My question was more for learning. Maybe I asked incorrectly.

You wrote a few days ago:

It "appears" that the FED is readying the market for their inevitable exit from QE (easing) of interest rates... and I want to be AHEAD of that game. When you couple the usual "sell in May and go away" --- and the possible -- note possible -- reduced FED QE this summer.... I want to trade when I want to and lock in a nice gain.


I read into your statement that you see a good time for buying. In your opinion, what do you see happening? Anything the long term investor needs to be concerned or excited about?

I realize that with 300 pages -- it's going to take some time to slog thru all that is in this thread... but welcome and take the time to start on page one... :>)




The "market" has a history of being lower throughout the summer months... for no particular reason really - except that people take time off - they go on vacation - the traders and "market makers" are out in their swanky dumps at the Hamptons etc...

So with that said -- the old saying "sell in May... and go away" -- is an old saying for a very good reason. Generally the market is higher going into May and then seems to just ebb down -- and comes back for the 4th quarter (September thru December). The "odds" are that happens more often than not.

We have another large market factor hanging over our heads -- that is -- the ECONOMY.... and if it really is making a comeback or not -- which means whether or not the FEDERAL RESERVE starts to let interest rates climb... We have no crystal ball... but IF -- always a big IF -- the economy is good and rates rise a little -- that will affect INTEREST RATE SENSITIVE stocks -- such as the two I just sold (JNK and NLY).

Okay -- so if you couple those facts with the "sell in May and go away" odds... and the "usual" market swoon in the summer.... It's a pretty good chance that the market will be buyable at lower prices than today. Maybe. Maybe not. We might just rally all summer... NOBODY -- and I mean NOBODY can tell you what it will do. It's GUESSING. It's PROBABILITY. It's ODDS.

So ----- now that you've read all of that.... I personally would WAIT -- if you're not already in the market --- for the summer swoon and plan exactly what you're going to buy -- and how much -- and I'd be picking away at that list sometime in July and August. Maybe we rally and you just pay higher prices -- and maybe we get the usual swoon and you save a buck a share.


Here's the fudge factor. If you're buying DIVIDEND paying stocks... You want to time your buy on the EX DATE.... and then you'll pick up the dividend for the following quarter. So if you have a list -- you'll want to note the EX DATES for each stock - and set a reminder on your phone or whatever - and be ready to put in a purchase for those shares.

But the real fudge factor is -- how much are you investing. In other words -- how much money in each stock --- if you plan to buy 100 shares of each company -- and they're trading at $45 a share.... in the long run - does it really matter if you paid $44 or 45.75? Not really. Not really at all. It's a nice ego stroke to have bought in on the dip but for your retirement it won't count one iota. ZIP. NADA. And you may have only paid $44 but you missed the .35 dividend payment by a week -- and now must wait 3 more months to get another dividend payment.... so now we're talking even less of a great buy.

That's why market timing doesn't work. You'll not get in at the bottom -- and you'll never sell at the top. And if you read this thread -- you're going to finally understand that you have 30 years to retire -- and just because you retire in 30 years doesn't mean you're dead! Ya got another 30 years to live! So now your real "horizon" is more like 55 or 60 years!! My advice is to just get going. If you want to -- wait for the "maybe" summer swoon.... it'll make ya feel better if it happens.

Does that make sense?

[Bucketlist2012]

Again Greg..Thanks for taking the Time to give your input on things...

[GregWeld]

Originally Posted by Bucketlist2012

Again Greg..Thanks for taking the Time to give your input on things...

My input isn't worth the paper it's written on.... it's just the ramblings of a worn out old guy with nothing better to do. Hey! That sounds like a description of CONGRESS!!



NOTE TO TONY.... how many people do you know that have the ability to safely store precious metals? If you pay for offsite storage you've lost your ability to access in an emergency... so it needs to be at home. I don't know about you -- but I'm not storing 50/100 grand or more in "cash"/"metals" in my house. And I have some pretty bitchin' safes (at least TWO of them and they're far larger than the average guys!) It's hard to keep a secret -- and these days -- with kids posting crap on the internet -- who knows what they tell their friends and then their friends tell someone else - and the next thing you know you're duct taped to a chair with a gun to your head or worse. No thanks.

I think that's why they invented BANKS in the first place. I don't keep stock certificates either. They're all electronic -- somewhere...

I guess that after 200+ years -- I have to place some faith in my government even as F'd up as they seem to be... ya gotta trust someone... and if our government goes to hell... I don't think we'll be worrying about a few lousy bucks stored out back in our buried coffee cans.

Take the money - put it in a brokerage - invest it wisely - let it grow... let it EARN money... next thing you know - you'll only be worried about which car you're going to have to wash tomorrow before you head off to a show somewhere.

[toy71camaro]

crazy week this week in the market (from my portfolio's perspective). Big Gain followed by big loss, followed by KO shooting up 5+% in one day, and now my KMB is hitting 4+% today. crazy.

[GregWeld]

Albert,


#1 -- I hope your Dad is doing fine!



#2 -- The "market" is always a hoot when things are going well.... Nothing better than "money for nothing" <stolen from the old Dire Straits song>