WELL......that was quite a week. 1168 points on the DOW. What a difference a week makes for investors: DOW year to date +11.39% SP500 year to date +14.62% The STRENGTH of the markets is shown by its REFUSAL to stay down. When we break out of this range and take the next step up it could be a BIG ONE.
We've been building cash since the first of the year. As well as that, we had a real estate investment come to a close and now we are sitting on more cash than we have ever had in our life. We bought some stock last week but it didn't make a huge dent in our cash. Based on analysis and speculation, we have decided to continue sniping deals as they come. We have a dragnet of limit orders that we will maintain until the end of the year. In 2020, I will reassess and decide what to do with the balance of the cash. In the mean time, it is earning a miserable 1.6% in money markets. These are great times but not ideal times for sinking a big nest egg into the market. Slow and steady...
Between Trump having the attention span of a 6 year old girl, Europe being a political mess, Canada stagnant at best, and china feeling the heat from the trade war, I see zero reason to place a market order. Times like this are ripe for change. The economic indicators are also a great lesson in perception versus reality. Depressions happen because people tighten up on spending. As long as everyone keeps spending, fiscal policy can be completely insane as proven by the current budget. Monetary policy has far, far more impact. I'm currently earning 1.6% on a decent sum of money. I could add to some tried and true REITs in our portfolio for 6-8% distribution return. I could buy some financials for less but still significant return. But... What are the odds the market will take a 5-6% dip in the next year? I'd say pretty high. A 6% dip would reduce the price more than the difference the best case dividend return would earn. We were able to pick up an industrial stock at a pretty solid discount last week so I pulled the trigger. I see no reason to pay retail for stock we don't need for retirement income, at this time.
WELL.......IT'S.....ALIVE. The most hated, disrespected, bitched about, dumped on, fear mongered, panic inducing, BULL MARKET in history. Here we are in year TEN of this historic BULL MARKET and at the moment just about every economic indicator that is ACTUALLY connected to and reflects the REAL economy is in a TOTAL sweet spot. Not too hot, not too cold, and we are even talking about lowering interest rates at times. This BULL MARKET could have a number of good years ahead of it. Impact of the China trade deal was completely discounted, BUT, now that they have backed off it is back on the table as a massive market driver if or when it happens. The stock market is closing in on its all-time high. Here’s what could clinch it https://www.cnbc.com/2019/06/11/the...all-time-high-heres-what-could-clinch-it.html (BOLD is my opinion and what I consider important content) Key Points Stocks are closing in on their all-time highs, and some analysts say the outlook for interest rates could determine which way the market goes. The S&P 500 was 2.3% away from its all-time high of 2,954 through Monday’s close while the Dow was 3.3% from its high and Nasdaq was 4% from its record. Stocks typically do well in June after a weak May, and strategists say the market has a chance to break to new highs if the trade outlook with China is positive. The decline in Treasury yields, which spooked stocks, is overdone, and that could help drive a stock rally, according to one market technician. The next big test for the stock market will be whether the major indexes can break through all-time highs, just a short distance away. Stocks have rallied on expectations that the Fed should be cutting interest rates in the near future, and that President Donald Trump would stand down from his threat to put tariffs on Mexico, as he did on Friday. The Dow Jones Industrial Average and S&P 500 are both up more about 5% in June. The Dow is up for six-straight days and futures pointed to another big gain Tuesday. “I think it goes back to its highs. This would be a pretty quick recovery from a pullback. Normally, it takes about a month and a half to get back to breakeven. This could happen in less than half a month,” said Sam Stovall, chief investment strategist at CFRA. Stovall said weak May markets usually lead to a boom in June. The S&P lost 6.6% in May. Going back to World War II, whenever there was a strong start to the year, the market traditionally fell in May but rose in June, and this year was very strong through April. The S&P 500 was 2.3% away from its all-time high of 2,954 through Monday’s close while the Dow was 3.3% from its high and Nasdaq was 4% from its record. “I think the market’s feeling like there really is nothing to be worried about,” Stovall said. “I think that’s because of the lower rates that will help pull the economy out of its death spiral.” Ari Wald, technical analyst at Oppenheimer, said the market is poised to move higher, and the fall in bond yields that spooked stocks was overdone. “We’re making the case that the S&P 500, with the snap back, is still in a position to surprise higher. We’re seeing a lot of similarities to the summer of 2016. … After a really strong run-up into the second quarter, the market just spent a few months backing and filling into the summer headwinds, before heading higher,” he said. Julian Emanuel, head of equity and derivatives at BTIG, says the market may actually have trouble breaking to the next level, though the S&P should end the year at 3,000. Emanuel said other hurdles remain for the stock market, including the unresolved China tariffs, which are a bigger threat than Mexico was in terms of the economic impact. He also said there is an increasing potential for a hard Brexit as Britain leaves the European Union. He said that could be a negative for risk assets. While he ultimately expects President Donald Trump to strike a trade deal with China, the trade war between the two could make for a bumpy ride for stocks. Emanuel also said investors are putting too much faith in the Federal Reserve. “The market has completely overestimated the Fed’s propensity to cut rates,” Emanuel said. “Friday’s [jobs report] was a weak number, but we’ve had a number of those over the years, and the Fed hasn’t reacted.” The government on Friday reported that only 75,000 nonfarm payrolls were created in May, about 100,000 less than expected. Economists in the last several weeks changed their forecasts to now expect as many as two Fed rate cuts before the end of the year. Even though the threat of tariffs on Mexico was one reason for the lower interest rates forecasts, Fed watchers continued to call for two rate cuts Monday, based on a weakening U.S. economy. “There are people who are talking about three or four rate cuts in 2019. That’s not going to happen,” Emanuel said. “The market has to work off a little bit of that rate-cut exuberance. That puts a ceiling on stocks. Conversely, the fact the Fed is prepared to act and the fact the market responded favorably to the outcome with Mexico tells you there is a floor under stocks as well,” Emanuel said. “The market needs to range trade for a while, as it waits to get more information on China.” MY COMMENT EXACTLY what I expected when we were in the middle of the fear and panic a few weeks ago. (see prior posts during that time) This market has a long way to go on the UP side. As I have repeated MANY times.......there will STILL be the risk of a big, dirty, black, swan as always. The greatest risk to the economy and stocks will be the election which will be a NATIONAL INTELLIGENCE TEST when it comes to economics and the economy. NEVER underestimate the ability of people to shoot themselves in the foot. REGARDLESS of Trump........a return to OBAMA economics or any of the tax hikes and economy killing plans that are be pushed by the "other party"........the socialists.......will be a disaster for the economy, jobs, and the country. CAN YOU SAY DEFLATIONARY DEPRESSION? For all those that want to be like various countries in Europe......well you have to take the bad along with the good, and for the past ten years if not longer, the "bad" has been a deflationary depression, with negative interest rates, and stagnation.
I am TOTALLY distracted from investing, stocks, and brokerage account at the moment. We are at MAXIMUM CHAOS, in the middle of our downsizing move into another house. PUSHING hard to get the old house ready and on the market for sale. I will be fairly free of this stuff about the first week or two of July. At least as of tomorrow I will have marked off 13 items from my list of workers, sub-contractors, trades people, etc, etc, on projects at one or more of the two houses. Only eight more scheduled items left on my list right now between tomorrow and July 8. BLEEDING MONEY at the moment between work at the old house and new house.......new floors, stove installation, fence work, furniture, handy-man, movers, replacing light fixtures, etc, etc, etc, at the new house. LUCKILY, being a, fully invested all the time, investor means that being distracted from my day to day portfolio is a non-issue. Being a LONG TERM investor it is not necessary for me to follow along with the markets and my investments during times like this when I am busy elsewhere.
Hi all.. Been following this thread since it started and decided to jump in. Started TRADING when I was 19 with a taxed account and INVESTING company 403B plan. Thought I was a big time TRADER and made money but never the % I was making on the 403B plan. It took me many wasted years to sit down and figure this out! My 403B plan was in a S&P 500 fund which I picked and knew the history of the fund. Still wouldn't trade those trading years because I learned a lot, but it cost me. I am 47 now and I would consider myself an INVESTOR. I changed my holdings in my taxed account too Large, Mid, Small funds and still have some stocks. I will be posting my current position and my plan in future posts. I am open to all input.. Thanks
Here is some input..... Very few people have the objectivity and self awareness to realize they are under performing the market. Someone who recognizes this, as you do, is nearly certain to do well in life and with investing. Welcome to Stockaholics.net. This is a place that traders discuss and learn about trading while investors entertain themselves and wait since... they are investors... there is almost nothing for them to do.
It was very hard to kick the TRADER Habit. Once a trader always a trader! I set up some trust funds for my two young sons (I'm an older dad) for the purpose of showing them how money grows over time. I hope they learn what I wished I learned at 19. Boring is good one step up from a coma is where I want to be when Investing.
Every one of us has been where you are. Some break out of the compulsion. Some don't. You are going to do very well.
Welcome to the thread TRAHN. Please feel welcome to post anything you wish, agree or disagree. It is always good to see the experiences and results of others. Personally I never did fall into the TRADER TRAP. I am old enough that the concept of "trading" never entered my mind. The trading mentality seems to have taken off in the day trading era of the late 1990's and up to the dot-com crash of the early 2000's. At some point in there the word "trading" was substituted for "investing" in all the brokerage advertising. Here is a nice little article on International diversification. My personal investing style for a long time now has been to AVOID TOTALLY all International diversification, all emerging markets "stuff", etc. etc. I focus completely on AMERICAN companies. The cream of the crop. I figure that my AMERICAN companies that sell their ICONIC products all over the world gives me plenty of international exposure. I have no interest in second rate businesses from other countries. (BOLD is my opinion and what I consider important content) Opinion: International stocks just can’t compete with the U.S. market right now https://www.marketwatch.com/story/s...ith-international-stocks-right-now-2019-06-11 "Should U.S. investors even try to diversify their stock portfolio internationally? Many are wondering, and it’s easy to see why: international stocks, with few exceptions, have underperformed U.S. equities for quite a few years now — and not by just a little. Over the past 10 years, for example, international equities have lagged U.S. stocks by eight percentage points annualized. A glimmer of excitement and hope among those championing international diversification happened briefly in 2017. That’s when, for the first time in five years, international stocks beat U.S. stocks — by six percentage points, no less. But that hope was soon dashed, as U.S. stocks finished far ahead in 2018. The same is true so far in 2019. Those in favor of international diversification now have to justify their beliefs. Gil Weinreich of Seeking Alpha recently focused one of his excellent podcasts for financial advisers on whether “investors [should] finally throw in the towel on global diversification.” Weinreich argued that investors shouldn’t, and for the most part I agree. Yet I do think U.S. and dollar-based investors need to reduce their expectations for what international diversification can deliver. Perhaps the strongest argument for giving international diversification the benefit of the doubt is that the past 10 years are hardly exceptional, as shown in the accompanying chart. Notice that, though the S&P 500 SPX, -0.16% is well ahead of the MSCI EAFE index 990300, -0.49% over the most recent 10-year period, winning over a decade is hardly unique. Indeed, during the late 1990s and the early aughts the S&P 500 was far further ahead of the EAFE for trailing 10-year return. Yet EAFE eventually came back to life. For six straight calendar years — 2007 through 2012 — this index of international equities outperformed the S&P 500. Clearly, recent experience appears to be unique only to investors with limited memories and no sense of history. At a minimum, therefore, there is no reason in recent performance trends alone to conclude that this time is different. That said, it is always possible this time is different — that international stocks will never come roaring back and beat the S&P 500. If that’s what you believe, you must base it on something other than these two categories’ recent relative returns. Why, then, do I believe investors need to reduce their expectations for the benefits of international diversification? Because those benefits have been exaggerated; it’s important to be realistic so that we do not become unnecessarily disappointed and throw in the towel. A bit of background is helpful. One of the main benefits of international diversification is that domestic and international equities have relatively low correlation to each other. That means that one is likely to be zigging when the other is zagging, and vice versa. So a portfolio divided between both asset classes should have less overall volatility than either one individually. The problem with this argument is that the correlation between international and domestic stocks is not constant. International stocks exhibit their lowest correlation with U.S. equities when the latter is in a bull market — precisely when you want diversification the least. International stocks exhibit their highest correlation with U.S. equities when the latter is falling, which is when you do want to be invested in another asset class with a low correlation. Consider the annual correlations between the S&P 500 and the EAFE index since 1970. In those years in which the S&P 500 rose, the correlation coefficient was 0.34 — while it has been 0.63 in years in which the S&P 500 fell. This idiosyncrasy of international-versus-domestic correlations is not new. Academic researchers have known about it for years. It’s just that most advisers and investors were unaware of it. This idiosyncrasy doesn’t mean that international diversification has no benefits. It does, since a 0.63 correlation is still a lot lower than 1.0. Assuming that this correlation holds in the future, and assuming that over the long term international equities produce a rate of return that is similar to that of U.S. equities, then a portfolio divided between the two categories will have better risk-adjusted performance than a portfolio that invests in U.S. stocks only. It just may not be quite as good as you expected." MY COMMENT I strongly prefer to get any needed international exposure from my AMERICAN multinational investments. I am not a fan of investing in businesses from dysfunctional or Socialistic, or Communist, or Semi-Socialistic ( the EU) countries, etc, etc. I prefer to invest in my own backyard where I have the best information and knowledge of what I an getting into.
THE FORCE is very STRONG right now. The markets MUST go up. FEELS like we are at the start of an old fashion summer rally. Or the alternative is we will continue in this little trading range that we have been in for the past few months. Dont see a lot of down potential.........BUT.......that will mainly depend on the news media and whatever they care to push to scare the sh*t out of investors. VERY strong day today. It will be interesting to see where we end up by the end of the week. A few more days like this and we could end up with a 600 to 1000 point week. SHORT TERM fun and games......BUT....for me it is the LONG TERM, fully invested all the time, strategy that counts.
In the history of time, has anyone gotten into investing with poise and studious research before they got into the pilot seat of the market airplane and started pulling leavers and twisting controls they didn't understand? You're going to do well. Cultivate your objectivity. It's the most important asset you have.
Thanks for the warm welcome.. My next adventure will be building a good group of ICONIC AMERICAN STOCKS that I will hope to hold long term. I have funds that own the market and have done well over the last 10 years. My current stocks owned are NOK, F, PPL, UPS, OPI, PAOTF. As you could tell my stock holdings are all over the board, left overs from the trading years. NOK, OPI, PAOTF are holdings at a loss. F, PPL, UPS are holdings with gains. I'll be not trying to time the market but will be looking to get out of these stocks and move into ICONIC STOCKS. As I have time I will be looking into making these moves with research being my main focus. HAPPY INVESTING!
WXYZ, Yes sir it's when I started and it was very easy to make good money at the time. Those where CRAZY years, but it was what got me started at a young age. HAPPY INVESTING!
If your plan is long-term investing, I'd suggest you take a look at the dividend aristocrats, at least as a starting point. Obviously look into them deeply and do your own due diligence, but they've historically beat the S&P fairly consistently and raised dividends over time. Good luck on your adventure.
When I am looking for potential companies to research and perhaps add I sometimes pull up a list of the total content of the SP500. That index represents the cream of the crop, the greatest 500 companies in the American economy. I than skim through the list and look for companies that catch my attention for further research. There are a lot of great companies on there that you just dont think about on a day to day basis. Trahn, keep us posted on your research and picks as you go forward. For those that might be new.........here is a listing of what i hold for the LONG TERM. I try to re-post this every three or four pages since it is the basis for what I do and have been doing for the past 45+ years. MODEL PORTFOLIO: "Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 55% of the total portfolio and the fund side at about 45% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing. As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a VALUE style component (Dodge & Cox Stock Fund), a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 12 stock portfolio. STOCKS: Alphabet Inc Amazon Apple Boeing Chevron Costco Home Depot Honeywell Johnson & Johnson Nike 3M MUTUAL FUNDS: SP500 Index Fund Fidelity Contra Fund Dodge & Cox Stock Fund CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (65+). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE." MY COMMENT: HOPEFULLY the stock portion of the portfolio will now be stable for many years into the future with good performance on the part of the various companies in their business and no trades necessary. I prefer to NOT make changes or trades, but if necessary I will pull the trigger without hesitation or emotion. #420
For THE HISTORICAL RECORD........here is what my portfolio looked like a few years back BEFORE I modernized it in a SATURDAY NIGHT MASSACRE intended to position the portfolio for the MILLENNIAL ERA. STOCKS: KO CL PG MO MMM CVX HD JNJ PEP PM KHC AAPL COST MDLZ NKE GOOGL FB AMZN MUTUAL FUNDS: VANGUARD SP500 INDEX FUND DODGE & COX STOCK FUND (in a couple of the six portfolios) FIDELITY CONTRA FUND A few years back I could see that a MAJOR change was occurring in consumer behavior and taste. I saw it as a huge generational change similar to the consumer era that kicked off in the late 1940's and into the 1950's and 1960's following WWII and the baby boom. Many of the companies in the above list become major household names in that era and continued to DOMINATE for decades after. These companies became the focus of my investing for many decades. Some came and went a number of times from my portfolio over the decades, but this was my core go to list of companies. These were long term companies that I considered ICONIC and DOMINANT in their markets world wide. You can see that many of the consumer names have now been sold from my portfolio. For some reason companies like KO, CL, PG, MO, PEP, PM, KHC, and MDLZ just could not seem to make the transition to connect with the current crop of younger consumers and importantly young mothers. I see it as a total failure of vision by their marketing teams and of course general management. For some reason they just missed the boat when it came to seeing the consumer behavioral changes that were sweeping in around them. Many of these companies are still struggling with making the transition to the "modern" consumer era. Perhaps they became like the big ship that just takes a long time to bring to a stop. These are still GREAT name companies BUT time will tell whether they can continue to be dominate in the NEW ERA of consumer taste and behavior that we are in right now. I suspect that many of them over time will continue to dominate as they acquire and finally fine tune their marketing to take into account the new consumer reality. Others, will simply fall away. They will continue to exist, but will just never be able to make the transition.
KO, CL, PG, MO, PEP, PM, KHC, and MDLZ I SALUTE these companies......they served me very well for a very long time. Those tobacco companies were a dividend and investing gold mine for decades in spite of the tobacco litigation. KO was and is a long term holding by Warren Buffett. BUT.....times change and as a LONG TERM INVESTOR you have to change with them. I try to NOT make rash moves or trades, but when long term trends become clear and financials deteriorate over a time span that shows a longer term trend it is time to move on. I try to RIDE a mutual fund or company to the max. For example I was an long time owner of Magellan Fund in their glory days. I ended up selling shortly after Lynch retired. I like to hold long term, but, when it is time to sell, it is time to sell and move on, nothing lasts forever in business and investing and life. Not a bad day today considering the BIG gain yesterday and the upcoming Fed blather. At the moment we are enjoying a shallow erratic market, but a kick ass year to date: Dow year to date +13.63% SP500 year to date +16.41%
