Investing 102

[jkp41]

Originally Posted by ErikLS2

Here's my 2 cents worth, but remember it's free and you get what you pay for

1) Personally I think you're too young and 23 yrs out at least is too long to even worry about bonds in my opinion. T pays more than most bonds just in it's dividend.

That's what I was thinking, but I thought I'd double check. As I said, this is much more money than I am used to managing by myself.

2) See answer 1 but I would favor strong companies you are comfortable with that have taken a dip based more on overall market conditions than their own individual fundamentals. Scaling in, or "dollar cost averaging" is never a bad idea. Also, read this article: http://www.marketwatch.com/story/how...rly-2016-01-25

So how many positions would you look at in total with this amount of money to get a good diversification? I was thinking 10-15 positions total, but it definitely isn't set in stone.

And for scaling in, do you typically start with purchasing half of the position that you'd like and going from there?

3) Personally, I've learned to always have some cash on hand for when we have these sudden dips that really aren't based on much of anything concrete. I don't use it but HYG is a popular bond ETF for storing cash, it's not the most conservative though nor without risk. On the conservative side, T-Bills may or may not do much for you, depending on how much cash you are parking, to even be worth the trouble, but they are safe.

With the relatively low interest rates in bonds, would it be worth keeping money there or in cash over the month or months as I am putting the money into stocks.

4) Max out any free money company match 1st, then max out Roth contributions, then go back to 403b and max that out (like most plans, it probably doesn't have very many or very good choices).

That's what I was thinking.

BTW, changing jobs is a perfect opportunity to swap out of a limited set of poor choices in a 401k and into a Rollover IRA with unlimited choices without paying a penalty. That was a great move and most people don't even know they can do this. My company was sold and I didn't change jobs but it allowed me to do this too!

You're just fine tuning at this point so don't lose any sleep, you're doing it right! Good luck!

I have been watching this thread for around 3 years. It is what got me into investing and paying attention to my retirement. Any ideas that I have were heavily influenced by what I read here. I feel like I'm on a much better retirement path than I was a few years ago. I really appreciate the wealth of knowledge that has been shared here.

[jkp41]

Originally Posted by WSSix

Welcome Kenny. Erik pretty said everything I would have. You're smart to be doing this now. Keep up the good work. The only thing I would recommend is to further diversify. If you can continue to purchase more shares of what you own and diversify at the same time, great! If not, I'd lean towards diversifying as a priority over expanding current selections. Keep your eyes on your current selections though for any dips. Jumping in during dips isn't necessary but it's great when you can.

Thanks, Trey! I'm planning on using this as a chance to reevaluate several of the positions that I have. Some will be expanded and others may be eliminated completely. And as for dips, I am curious as to how the election will affect the market. That has been on my mind as well since it will probably happen around the time that the account transfer finalizes.

[ErikLS2]

Originally Posted by jkp41

I have been watching this thread for around 3 years. It is what got me into investing and paying attention to my retirement. Any ideas that I have were heavily influenced by what I read here. I feel like I'm on a much better retirement path than I was a few years ago. I really appreciate the wealth of knowledge that has been shared here.


1) Personally I think you're too young and 23 yrs out at least is too long to even worry about bonds in my opinion. T pays more than most bonds just in it's dividend.

That's what I was thinking, but I thought I'd double check. As I said, this is much more money than I am used to managing by myself.

2) See answer 1 but I would favor strong companies you are comfortable with that have taken a dip based more on overall market conditions than their own individual fundamentals. Scaling in, or "dollar cost averaging" is never a bad idea. Also, read this article: http://www.marketwatch.com/story/how...rly-2016-01-25

So how many positions would you look at in total with this amount of money to get a good diversification? I was thinking 10-15 positions total, but it definitely isn't set in stone.

And for scaling in, do you typically start with purchasing half of the position that you'd like and going from there?

3) Personally, I've learned to always have some cash on hand for when we have these sudden dips that really aren't based on much of anything concrete. I don't use it but HYG is a popular bond ETF for storing cash, it's not the most conservative though nor without risk. On the conservative side, T-Bills may or may not do much for you, depending on how much cash you are parking, to even be worth the trouble, but they are safe.

With the relatively low interest rates in bonds, would it be worth keeping money there or in cash over the month or months as I am putting the money into stocks.

4) Max out any free money company match 1st, then max out Roth contributions, then go back to 403b and max that out (like most plans, it probably doesn't have very many or very good choices).

That's what I was thinking.

BTW, changing jobs is a perfect opportunity to swap out of a limited set of poor choices in a 401k and into a Rollover IRA with unlimited choices without paying a penalty. That was a great move and most people don't even know they can do this. My company was sold and I didn't change jobs but it allowed me to do this too!

You're just fine tuning at this point so don't lose any sleep, you're doing it right! Good luck!

It's not as much about the number of positions but what percentage of your total you have in each one and what your comfortable with. Look at what happened to Hain Celestial today. I like the rule of never having more than 5-10% of your total in any one name, but keep in mind that the market is basically run by ETF's now, the individual investor doesn't buy enough to have any significant impact really on stock prices compared to ETFs. What that means is that when things go down, most of everything usually goes down at least in a given sector, the good with the bad (temporarily). Your job is to find and separate the good companies from the bad ones and buy at these times if possible.

Another thing to remember is you should be reading earnings reports, listening to conference calls, etc when they come out, gets to be too much if you have too many names.

While it's a generally considered good idea I don't typically scale in personally. If I like something and it's a bit down I'll buy some. With things at all time highs right now I'm not sure this is the time to buy but what do I know, could go much higher from here or crash tomorrow. I do think it's a very good sign we are finally above the highs of 1999-2000 at a much lower P/E.

I don't know enough about bonds to really comment. All I can say is Money magazine has something called the Money 50. Their 50 best stock and bond funds/ETFs. Here are a few from their bond list that I recognize and you can research:

DODIX
FTBFX
VFSTX
VWITX (tax exempt)

[GregWeld]

Originally Posted by jkp41

I have been watching this thread for around 3 years. It is what got me into investing and paying attention to my retirement. Any ideas that I have were heavily influenced by what I read here. I feel like I'm on a much better retirement path than I was a few years ago. I really appreciate the wealth of knowledge that has been shared here.

YOU just made MY day buddy!!


Stick to it -- good market and bad -- buy more in bad market conditions -- then hang on.....


You'll live to appreciate your efforts!

[GregWeld]

Originally Posted by YAMATHUMP

I am a long time lurker on this thread, and I just wanted to take the time to say thank you to all who have posted. It is funny how some of the most solid investing advice I have seen has been on a "car forum". LOL Another thing that's funny is how you go from "gambling" to "investing" and you feel so much more secure.
You know I wish I knew at 20 what I know now.......and I have always saved money, just sometimes made bad investment decisions (some good too!) Any how, I hope everyone who reads this thread gets out of it what I have! Thanks again and keep up the good work!
Brad

Brad! So easy a five year old can do it! In fact -- we should all START by putting money away for our five year olds! College is coming!


So happy you've gotten some nuggets you can use to help yourself to a better life! Yippppppeeeeeeeeeee

[captainofiron]

I have a pretty significant chunk of my portfolio in Lowes, and today they missed so they are down ~$5

I have a reasonable chunk of cash sitting (from being an idiot and not using the dividends reinvestment option), but I am really nervous about putting money into them on a dip, given that it has kicked me down hard when I did this the past couple years with COP and STX

Any thoughts?

[GregWeld]

Originally Posted by captainofiron

I have a pretty significant chunk of my portfolio in Lowes, and today they missed so they are down ~$5

I have a reasonable chunk of cash sitting (from being an idiot and not using the dividends reinvestment option), but I am really nervous about putting money into them on a dip, given that it has kicked me down hard when I did this the past couple years with COP and STX

Any thoughts?

The very best time to buy is when the market is DOWN not UP.


Having said that --- even when you have a bucket of money --- it's hard to follow this simple advice. I get it.


Whenever you get nervous..... GO TO THE CHARTS!!! Stretch 'em out ---- DO YOU NOT SEE THAT THEY'RE LOWER ON THE LEFT SIDE AND HIGHER ON THE RIGHT??


Now -- be a smart guy and pull up a comparo chart of Home Depot (HD) and Lowe's (LOW).... Personally I've always liked HD better. Lowe's - to me - is too "Chinese imports for the housewife" kind of a store.


How many years do you have before you actually retire --- and then --- wait for it --- how many years do you plan to live after retirement?? My guess is - no matter how many dips the market takes - it'll be higher in the long run.

[captainofiron]

Originally Posted by GregWeld

The very best time to buy is when the market is DOWN not UP.


Having said that --- even when you have a bucket of money --- it's hard to follow this simple advice. I get it.


Whenever you get nervous..... GO TO THE CHARTS!!! Stretch 'em out ---- DO YOU NOT SEE THAT THEY'RE LOWER ON THE LEFT SIDE AND HIGHER ON THE RIGHT??


Now -- be a smart guy and pull up a comparo chart of Home Depot (HD) and Lowe's (LOW).... Personally I've always liked HD better. Lowe's - to me - is too "Chinese imports for the housewife" kind of a store.


How many years do you have before you actually retire --- and then --- wait for it --- how many years do you plan to live after retirement?? My guess is - no matter how many dips the market takes - it'll be higher in the long run.

Greg you are the man.

I bought lowes at the time because it was worth half of what HD was, and it has really paid off. I have shopped at both, and I understand exactly what you say about contractor style of Home Depot vs housewife faux-renovation style of Lowes, BUT both are always packed everytime I go into one, PLUS the Lowes is easier to get to for me, haha

Im gonna take a look at the comparison, last time I looked they were pretty neck and neck for the past few years.

[GregWeld]

Originally Posted by captainofiron

Greg you are the man.

I bought lowes at the time because it was worth half of what HD was, and it has really paid off. I have shopped at both, and I understand exactly what you say about contractor style of Home Depot vs housewife faux-renovation style of Lowes, BUT both are always packed everytime I go into one, PLUS the Lowes is easier to get to for me, haha

Im gonna take a look at the comparison, last time I looked they were pretty neck and neck for the past few years.

I agree they are so similar that they're hard to differentiate.... like Verizon and AT&T... just close your eyes and toss a dart. LOL



And like I've always said ---- buy the one YOU like! And where YOU shop! That way you'll see any changes with your own eyes.

[WSSix]

Or, do like I did when I couldn't decide which industry giant to choose from and buy both. That's why I own both T and VZ. They both are doing well for me. I'm probably going to buy Nike and UnderArmor soon, too, because yet again, I can't decide which one to choose.