What does your plan from a year ago tell you to do?

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Originally posted by MaThGr82:
What does your plan from a year ago tell you to do?

Oh God, I was supposed to "re-balance" e.g. sell-a-bunch a long time ago, but I've been happily riding the wave and happy to have not re-balanced because I'd have made less money. But it might be time to get back to my plan of only having 40% of net worth in stocks, given my age and time to retirement. But it's tough because the bond offerings suck so bad.

My dad freaked out in the stock market tank of 07/08. He was on a fixed income that depended on his long term investments. He sold nearly everything when 100+ year old financial companies began evaporating over night. Now he see the recovery and where he could have been had he rode it out. He is having to live far below the lifestyle he planned on. I think it pays to weather the storm and even buy if wisdom dictates.

quote:

Originally posted by darthfuster:
My dad freaked out in the stock market tank of 07/08. He was on a fixed income that depended on his long term investments. He sold nearly everything when 100+ year old financial companies began evaporating over night. Now he see the recovery and where he could have been had he rode it out. He is having to live far below the lifestyle he planned on. I think it pays to weather the storm and even buy if wisdom dictates.

I worked with a guy in the same boat. When the markets portfolio had lost about half its value, he bailed out because he said he just couldn't afford to lose yet even more. Yes, he too lost out on the recovery.

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Originally posted by Hay2bale:

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Originally posted by bigdeal:

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Originally posted by Hay2bale:
If there is a good reason to sell, I will sell. On January 24, Intel (INTC) was up nearly 10% in one day on better than expected earnings. In my experience when a stock pops up like that it will often drop again, so I sold it all at $69. Friday, one week later, it closed at $64. I missed a significant loss.

Hmmm. I've owned Intel stock for almost 20 years. Should I sell? Intel, like a number of stocks, is a very solid stock to buy and stay in for the long haul. Ignore the peaks and valleys and just let it ride.

Almost 20 years ago, in August 2000, Intel closed at $75.81, according to the chart on CNBC. So if someone bought Intel in August 2000, they are still at a loss. So we are still waiting on Intel getting back to where it was almost twenty years ago.

If you ignore the peaks and valleys, how do you determine if and when to buy an individual stock?

Research the terms "stock split", "stock dividend", and "cash dividend". You don't only make money on the value per share of a stock over time. Intel has worked out very well for me over the long haul (as has Microsoft), and it would have to plummet in value before I started losing money on it.

93% of all return is based on asset allocation. I work in Wealth Management with clients whose net worth is well over 7 figures. I tell them every day to manage risk and let return provide what it provides. We cannot control return. We can set our asset allocation/risk tolerance and rebalance whenever a position gets overweight or underweight. Keeping your risk constant ALWAYS leads to a better long term return.

Generally speaking, the average amature investor has nowhere near the time, experience, access, or expertise to purchase individual stocks and be successful over the long term. That is why mutual funds exist. A fund manager with hundreds of million dollars to invest wants to know the outlook for a company. An individual with tens of thousands of dollars to invest wants to know the outlook for a company. Which one do you think the company will respond to when the phone rings?

YMMV but I am an expert in this field and I do not own a single share of stock. All of my wealth is in mutual funds.

^^^^^^^^

For me only, but I can completely agree with the above advice. No one can live in the past. Sure it is interesting and might help shape how we feel about the future somewhat. But the above advice makes complete sense to me and is how I am managing our financial future to a great degree.

Great advice imho

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Originally posted by armedprof:
93% of all return is based on asset allocation. I work in Wealth Management with clients whose net worth is well over 7 figures. I tell them every day to manage risk and let return provide what it provides. We cannot control return. We can set our asset allocation/risk tolerance and rebalance whenever a position gets overweight or underweight. Keeping your risk constant ALWAYS leads to a better long term return.

Generally speaking, the average amature investor has nowhere near the time, experience, access, or expertise to purchase individual stocks and be successful over the long term. That is why mutual funds exist. A fund manager with hundreds of million dollars to invest wants to know the outlook for a company. An individual with tens of thousands of dollars to invest wants to know the outlook for a company. Which one do you think the company will respond to when the phone rings?

YMMV but I am an expert in this field and I do not own a single share of stock. All of my wealth is in mutual funds.

I have a fair amount in mutuals as well but my individual stocks' unrealized gain over 9 years has been 89%. Big winners have been Amazon, Netflix, Roku, Tesla, Disney, RH, Facebook and Home Depot. My mileage, to date anyway, has been pretty good.

Doesn't only 1 in 20 fund manager outperform the broad indices?

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Originally posted by kkina:
Doesn't only 1 in 20 fund manager outperform the broad indices?

I seem to remember reading that 85% of fund managers underperform the indexes each year, so that would be 1 in 7 , but they seldom beat the indexes two years in a row, so if you look at two years it might be 1 in 20. That is why money has been rushing out of mutual funds and into index ETFs like the SPY.

Please keep in mind that the fund manager's primary goal is to turn your money into his/her new Mercedes.

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Originally posted by bigdeal:

Research the terms "stock split", "stock dividend", and "cash dividend". You don't only make money on the value per share of a stock over time. Intel has worked out very well for me over the long haul (as has Microsoft), and it would have to plummet in value before I started losing money on it.[/QUOTE]

Intel has not had a stock split since August 2000. https://www.stocksplithistory.com/intel/

August 2000 was the peak for Intel, you must have bought before or after if you have a gain on your position the stock. But the fact is that Intel is still selling for less than it was at it's high twenty years ago.

"Stock dividend" is like kissing your sister. "Cash dividend" is beer money. I didn't need to look it up.

In my opinion, Buy and Hold is not the best tactic with individual stocks. You got to know when to hold them and know when to fold them. I have a simple test. Every time I look at a stock that I own, I ask myself if I would buy it at this price. If I wouldn't buy it at this price, I may put in a limit order to sell, particularly if there is something else I want to buy. The bulk of my liquid assets are in IRA accounts, so frequent trading is not a problem.

I sold all of my MSFT last month, too. At $149 and now it's at $171. You can't win them all!

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Originally posted by ensigmatic:
The common wisdom is if you try to chase market trends you'll end up losing.

Personally, I tend not to look at our retirement account during downturns.

I have been in the market for decades. The above statement is extremely accurate.

You have to know what sectors have strength like MSFT and AMZN are big in the Cloud with 5G being the future like $15T world wide.

Fidelity Select Funds are good to trade while looking at performance. You have to remember that stocks decline twice as fast as they increase so a correction can be a big loss and take longer to get back.

One of the best indicators of market performance are the new highs/new lows. Stocks start to top out so the new highs decline and the new lows increase. Using exponential moving averages, you can plot the performance during a downtrend or an uptrend.

https://www.investorvillage.co...&pt=msg&mid=20237301

Age, asset allocation, timeline & other factors need to be considered.

I don’t make emotional moves on news events. At the most I may reallocate a bit, adjust future contributions.

Yes, but the vast majority of mutual funds don't beat the market (S&P 500.) A lot can be said for buying cheap (low fee) index funds, and letting them run.

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Originally posted by armedprof:
93% of all return is based on asset allocation. I work in Wealth Management with clients whose net worth is well over 7 figures. I tell them every day to manage risk and let return provide what it provides. We cannot control return. We can set our asset allocation/risk tolerance and rebalance whenever a position gets overweight or underweight. Keeping your risk constant ALWAYS leads to a better long term return.

Generally speaking, the average amature investor has nowhere near the time, experience, access, or expertise to purchase individual stocks and be successful over the long term. That is why mutual funds exist. A fund manager with hundreds of million dollars to invest wants to know the outlook for a company. An individual with tens of thousands of dollars to invest wants to know the outlook for a company. Which one do you think the company will respond to when the phone rings?

YMMV but I am an expert in this field and I do not own a single share of stock. All of my wealth is in mutual funds.

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It depends on your orientation. If you're a trader, then you should already be out - depending on the time frame you're working in.

If you're a value or 401K investor, then you should already have a list of desirable companies that you can buy when the market dips.

Again, know your orientation and stick to your rules.

V.

looking like a big bump at the open today ...

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Originally posted by BBMW:
Yes, but the vast majority of mutual funds don't beat the market (S&P 500.) A lot can be said for buying cheap (low fee) index funds, and letting them run.

^^^
THIS RIGHT HERE!

We have our money with Fidelity and have since the 80’s. Sold off in the ‘87 crash and regretted it ever since. Fortunately I was young and the loss wasn’t that great but it taught me a great lesson.

Now part of our money is in a managed account as a way to reduce my overall risk (at least according to my advisor!). Last year it returned about 20% which is nothing to sneeze at.

The majority of the rest is in indexed funds and a couple of long term high performers with Fidelity and those bundles returned over 31% last year.

When we have our semiannual review my advisor is always trying to steer me into more conservative managed bundles and my response is when you can show me that you can consistently outperform my indexed funds I’ll switch....crickets...

Full disclosure...I am fortunate in that even though I’ve recently retired we don’t anticipate touching these funds for at least 10 years.