Investing 102

[glassman]

Good discussion here this morning guys. I wish I can add to these comments to help out, but I'm still learning. With my hyper brain the one thing I have learned (albeit slowly) is too keep it simple, basic fundamentals

Watching the closing hours of the Rolex Daytona24

[GregWeld]

Originally Posted by Vegas69

Is there really any doubt a correction is coming on the horizon? When you team what Greg said with the debt cycle, it seems likely in the near future. Think about what happened 7-10 years ago. Many wiped out there excessive debts through foreclosure, short sales, and bankruptcy. When the economy came roaring back, they now had a large percentage of income that could be displaced with debt. The fact is that roughly 85% of cars are financed. The US economy is very reliant on consumers taking on debt to make purchases of houses, cars, boats, furniture, etc.. When Americans start getting toward the end of their available monthly income due to excessive debt load, spending slows down. Team that with higher interest rates and.... I know I've seen people spending similar to 12-15 years ago.

I recently read in the Wall Street Journal that the stock market had it's second best run under Obama vs. any other president in history. That's 8 years of serious gains. Housing has been appreciating for 5-6 years in most markets.

Are we there yet? Who knows, but we are much closer than yesterday. If I was closing in on retirement, I'd be making some conservative moves with my money, that I know. Unless I lived off my dividends like Greg! 97% can't do that.

One thing is certain, cash will be king in the next low cycle. I hope to be ready.

I see a period of "between" --- where we are spending *thus - buying* FIRST..... as there's a rush to get things done BEFORE the rates go very much higher (we have time here)..... Then - as TODD rightly points out - the glass begins to fill with debt and spending slows accordingly. We're not talking about next week guys!!! But WE MUST BE OUT FRONT (that means to be thinking in ADVANCE) of this...... at some point. Not yet - but at some point you need to understand these relationships.

[Vegas69]

I'm with ya, my friend!

A great quote I read today:

"You must not only be in the right place at the right time, but you must be the "right person" at the right place and time." -T Harv Eker

[WSSix]

Originally Posted by XLexusTech

The company I work for was acquired recently. We were just told effective this month our existing 401k ( I contribute 15% ) is dead (we can't contribute and employer contributions are dead) when the new company takes over we have their 401k and ESPp that we can participate in... my question is where should I go with that 15% during the mulitiple months it's going to take?

My options ... my dividend stocks .... my mutual funds ... open a new Roth ? (Note 8% of the 15 mentioned above goes into a Roth)

I'd just keep it simple and put the extra money into your current dividend stocks after making sure your Roth IRA is maxed out for 2017. I'm assuming this won't be for a long period of time so there's no need to start a new retirement account to replace the no longer available 401K. Those are my thoughts anyway.

I hope the ESPP is a good option for you, too. I took full advantage of mine when at Halliburton a few years ago. It's worked out nicely even with the downturn in oil.

[WSSix]

Along with what Greg and Todd have mentioned this morning, what are people's thoughts on industries that Trump has specifically called out and might be affected by his tariff demands? For example, I was thinking about opening a position in Ford just for the dividend. I'm concerned though that they may take a hit since many vehicles are made in Mexico. I'm also concerned about my own employer, Cummins. We have a lot of engine plants in other parts of the world. We sell engines here that were made in India, China, and Japan. I don't like it when I see certain industries specifically targeted for legislative abuse.

[68Cuda]

Originally Posted by XLexusTech

our existing 401k is dead

What are your options there? Can you roll this over into a self directed IRA? That may give you more flexibility than just rolling it into the new 401k plan.

This is essentially what we did with one of my wife's old employer's 401 plans. When she left they put her in some plan outside the company that has stupid high fees so I just had her roll it into a E-trade IRA where we choose the stock investments and only pay for trades.

[JKnight]

The issue in the interim period will be that you can't contribute pre-tax money from your pay. I'm a little surprised they are handling the transition in a way that doesn't have you participating in the acquiring firm's plan prior to stopping contributions into the existing. Trey's point about funding a Roth during that period is valid, but those will have to be after-tax dollars. I'd ask your firm's HR group for more info about your options during this period. If they don't provide a mechanism for pre-tax contributions, you don't really have an option to continue that.

[JKnight]

The potential cut in corporate tax rates has undoubtedly contributed to the DOW surpassing 20.000, if the optimism around that changes, we'll see a correction, and vice versa. I won't be betting against it happening in this political environment. Whether or not you agree with it, investing in stocks is one way to capitalize on it.

[So Cal Camaro]

Originally Posted by GregWeld

I see a period of "between" --- where we are spending *thus - buying* FIRST..... as there's a rush to get things done BEFORE the rates go very much higher (we have time here)..... Then - as TODD rightly points out - the glass begins to fill with debt and spending slows accordingly. We're not talking about next week guys!!! But WE MUST BE OUT FRONT (that means to be thinking in ADVANCE) of this...... at some point. Not yet - but at some point you need to understand these relationships.

Yes, but with Trump proposing to reduce regulation and cut corporate taxes, hoping for business to spend those huge piles of cash they have been sitting on during Obama's reign....I anticipate things are gonna roll up higher, there may be a correction, but in the long run this party is just starting if you look in the right places...

[Vegas69]

Give us some details on the "right places".