Investing 102

[96z28ss]

Well a few weeks ago I sold all my stocks in my IRA and bought some Bitcoin. I lost my shirt I should of just stayed to the basics of this thread.

[CamaroMike]

Originally Posted by 96z28ss

Well a few weeks ago I sold all my stocks in my IRA and bought some Bitcoin. I lost my shirt I should of just stayed to the basics of this thread.

April fools or for real?

[GregWeld]

If you remember - I recently posted about the "value" shown in an account (mine) vs it's intended purpose (dividend cash flow) and that --- here's the important part --- at some point a loser would become a winner (green) and a winner might suddenly be a loser (red)...


Today my FORD (F) stock is up .80 per share --- and with 20,000 shares --- that becomes a decent move. It was in the RED - but with it's 16K move today - went from loser to gainer. That holding is (today) in the green by 5K.


My point? I can't go around worrying about which name is red vs green day to day... they'll change - they are fluid - they all PAY ME regardless of their current green or red status. I just don't use that metric to stew over. I stew over the general economy - how that might affect ME long term.... I stew more over having MISSED a good opportunity because I was "afraid".... (as in - I should have bought a lot more property investments when they were giving them away).

[GregWeld]

Originally Posted by 96z28ss

Well a few weeks ago I sold all my stocks in my IRA and bought some Bitcoin. I lost my shirt I should of just stayed to the basics of this thread.

HAHAHAHAHAHA good one!!!

[GregWeld]

Originally Posted by CamaroMike

I shaved a little earnings this morning, nobody even went broke taking a profit right?


Hopefully this momentum continues throughout the week. Maybe kmp will jump back up if they stay out of Barrons... Until then bring on those dividends!

Shave a little when the gains make the holding more than your 5% allowable investment. Or when you've bought a speculative name just for that purpose.

The problem with always selling your winners -- you're left with losers and you're paying taxes on the gains...

I'm not saying you shouldn't sell... just make sure you understand why you're selling... the tax implications... and do you have your eye on a name to put the gain back to work.

It's always hard to see a "TOTAL RETURN" number of 100% or 400%.... when looking at the numbers BEFORE investing.... and then selling when you have a 20% gain. You won't double or triple your money if you're always taking the gain. If you're not well diversified -- then yes -- take the gains and keep branching out.

[96z28ss]

Originally Posted by CamaroMike

April fools or for real?

April fools

[GregWeld]

Everyone has their own plan Mike! Glad you're working yours.

Remember that when I respond to a post -- I'm writing for EVERYONE that reads this. Not really responding directly to the poster as much as I am trying to use the info as a learning tool for everyone.

I own Ford --- and it's been an okay stock. I really bought it because I was pretty sure the autos had bottomed... and I think there was lots of rebound room there. Same with my purchase of Wells Fargo (WFC)... the banks had been killed and I figured they were done going down. You have to be EARLY to catch big moves - and sometimes "we" are too early and suffer along the way -- but as long as your theory holds up or comes to be correct then Viola!

Right now - WFC is my biggest gainer.

[GregWeld]

Cut and pasted this from an article about how LOUSY Amercians are about saving for their own retirement. You've all heard me say it before --- fees and expenses can and DO affect your savings over time. Whether it's 20 or 30% really doesn't matter --- those are HUGE numbers over time!






401(k): High costs, poor returns

By far the most common way employees save for retirement these days is through a workplace 401(k), which over the last three decades has supplanted pensions as the employer plan of choice. Here's the problem: As originally conceived, that's not what 401(k) plans were designed to do.

Created in 1978 as a minor part of a major tax law, 401(k) plans were intended to help well-paid corporate executives shelter income from taxation. Congress later decided to expand access to the plans to rank-and-file workers, and even then the idea was for such investments to merely supplement, not replace, ordinary pensions.

Critics point to a number of defects in 401(k) plans. The most serious, some experts say, is that they require individuals to manage their investments, exposing them to risks they lack the expertise to discern. That point was driven home during the financial crisis, when millions of people saw the value of their 401(k) holdings plunge.

"Employees are neither equipped nor trained to handle risk," Webb said.

Another strike is the high administrative, marketing, asset-management and other fees many financial firms charge for 401(k) plans. Hiltonsmith calculates that such fees diminish a person's nest egg by an average of about 30 percent. Webb comes up with a slightly lower figure, saying that relative to a low-cost index fund, an actively managed 401(k) reduces retirees' wealth by about 20 percent.

Notably, meanwhile, higher fees don't add up to better investment returns.

"If the fees on actively managed funds were buying better investment performance, then those fees might be money well spent," Webb said. "But evidence suggests that the average actively managed fund underperforms an index fund."

[GregWeld]

History shows the last 13 bear markets* lasted an average of 21 months, with an average 40% decline.
But no matter how long or strong these bear markets, the subsequent bull markets were almost always longer and stronger. On average, bull markets have returned 164% and lasted over 57 months--almost five years!

[CamaroMike]

Originally Posted by GregWeld

Everyone has their own plan Mike! Glad you're working yours.


Right now - WFC is my biggest gainer.

Thanks! I am happy to hear that my employer is paying you well