Investing 102

[captainofiron]

I work at a start up, so we have plenty of rich investor types come in, most of them are pretty cool and I regularly chat with one of them about investments and frugality (think Mr Money Mustache)

The other day he was talking about how he is building up his savings to buy a bunch of assets when the market crashes in the next year or 2

this got me thinking... A LOT

what all are you guys doing to limit the damage if the market crashes or if we hit another Great recession? Any tips for us lowly newbs? haha

[GregWeld]

Originally Posted by captainofiron

I work at a start up, so we have plenty of rich investor types come in, most of them are pretty cool and I regularly chat with one of them about investments and frugality (think Mr Money Mustache)

The other day he was talking about how he is building up his savings to buy a bunch of assets when the market crashes in the next year or 2

this got me thinking... A LOT

what all are you guys doing to limit the damage if the market crashes or if we hit another Great recession? Any tips for us lowly newbs? haha

Great question — and the correct answer is..... “it depends”. Depends on your time horizon — depends on your job security — depends on your debt load...

Dodging the question? Nope....

But “trying to time the market” is almost impossible - even if you’re a professional. The correct way for the average guy to invest is to invest when you have the money... particularly if your horizon is 5 / 10 /20 years. The idiots that BAILED out of stock that they’d bought high going in to 2009.... and SOLD... they lost their you know what. Was there a bunch of handwringing and worry while the market sunk 40%... you bet! But had they held the course - and in fact bought instead of sold - they’d have made a bundle plus.

I do investing AND I also “trade” a bit.... very little on the trading - but if Amazon is going up and down $50 a day - I might play with that a bit... but that’s a whole different question — but to answer your question — right now I’m not buying much of anything because nothing seems to be working. So I’m long cash and sitting back to see what happens.

HOWEVER — my CORE investments don’t change very much because that’s where my income comes from - and they keep paying dividends regardless of their stock price...

If your horizon is “retirement” — and you’re investing in your 401/IRA/ROTH — just keep buying and putting money to work. We’ve discussed this all in the thread a million times.

If you have a 2 or 3 year horizon — that’s pretty short term and if that’s the case — and you’re going to need the money for something — then taking some profits (or selling some losers before they’re bigger losers) never hurts.

[captainofiron]

Originally Posted by GregWeld

Great question — and the correct answer is..... “it depends”. Depends on your time horizon — depends on your job security — depends on your debt load...

Dodging the question? Nope....

But “trying to time the market” is almost impossible - even if you’re a professional. The correct way for the average guy to invest is to invest when you have the money... particularly if your horizon is 5 / 10 /20 years. The idiots that BAILED out of stock that they’d bought high going in to 2009.... and SOLD... they lost their you know what. Was there a bunch of handwringing and worry while the market sunk 40%... you bet! But had they held the course - and in fact bought instead of sold - they’d have made a bundle plus.

I do investing AND I also “trade” a bit.... very little on the trading - but if Amazon is going up and down $50 a day - I might play with that a bit... but that’s a whole different question — but to answer your question — right now I’m not buying much of anything because nothing seems to be working. So I’m long cash and sitting back to see what happens.

HOWEVER — my CORE investments don’t change very much because that’s where my income comes from - and they keep paying dividends regardless of their stock price...

If your horizon is “retirement” — and you’re investing in your 401/IRA/ROTH — just keep buying and putting money to work. We’ve discussed this all in the thread a million times.

If you have a 2 or 3 year horizon — that’s pretty short term and if that’s the case — and you’re going to need the money for something — then taking some profits (or selling some losers before they’re bigger losers) never hurts.

Awesome thanks

Ok so you wouldn't do anything like change asset mix or something along those lines?

My horizon right now is hopefully ~10 years, my goal is to retire before I'm 50 and be able to live off of 4% of our portfolio

The wife and I are trying to save at least 25% of our income, lately I've been putting this into either VTI or FZROX

I've been using FZROX kinda like a savings account

Speaking of savings accounts, I've transferred all our savings (emergency fund and car fund) to an online bank with 1.9% vs .25% at our credit union

[SSLance]

We have a savings account at Capital One that is FDIC insured and paying 2% on balances with no fees or restrictions. Just food for thought.

I'm with Greg, powder dry holding course and collecting divies...

[pontiacgtp97]

Originally Posted by SSLance

We have a savings account at Capital One that is FDIC insured and paying 2% on balances with no fees or restrictions. Just food for thought.

I'm with Greg, powder dry holding course and collecting divies...

I have the same type account. When I opened it, Capital One was paying a $500 bonus for opening the account.

[Flash68]

Makes sense to me.

https://www.cnbc.com/2018/11/19/gold...next-year.html

[GregWeld]

If you’re INVESTED in the things we’ve discussed here (not names but the premise for good investing) — then everyone will be fine and will be rewarded.... Let the few down days or periods shake you out.... and you’ll never catch up... Choose WISELY — don’t be greedy — stay the course - get the rewards.

[XLexusTech]

Originally Posted by GregWeld

If you’re INVESTED in the things we’ve discussed here (not names but the premise for good investing) — then everyone will be fine and will be rewarded.... Let the few down days or periods shake you out.... and you’ll never catch up... Choose WISELY — don’t be greedy — stay the course - get the rewards.

I am with you ... been buying for about 15 years .. only thing I sell are losers just enough each year to get 5he tax benifit.... I know it’s situational your horizon is and lifestyle are huge...

But is their ever a time to take some of you winnings off the table ? Even it you plan to buy the same holding back later at a lower share price?

I am being advised to take some money off the table but I am struggling

[Flash68]

I guess there's that old saying.... no one ever got hurt taking a profit.

Happy Thanksgiving all.

[XLexusTech]

Originally Posted by Flash68

I guess there's that old saying.... no one ever got hurt taking a profit.

Happy Thanksgiving all.

Yep just not sure how to take some profit without getting hit with taxes? I don’t want to end up in a higher tax bracket or pay short ter rates.:

Pardon my ignorance those both nay be completely wrong assumptions?