The Long Term Investor

I am really not too familiar with the M1.....pie....concept. . Perhaps you can explain more about how it works Bigmaix.....I am sure I am NOT understanding the concept correctly.

Normally in a regular brokerage account....... selling a stock....outside a retirement vehicle..... for a profit generates a taxable event....a short term or long term capital gain. If you than move the funds to a bank account....that does nothing in terms of taxes.

BUT......I am not sure how the M1 pie system works....so I do not know if this applies to you or not. Your best bet would be to simply call a rep at the brokerage.

 

WELCOME.....Lori Myers. PLEASE......join us in posting any time.

You have certainly figured out the TRUE way to financial success.....quickly. You are so right.....the key is a lifetime investing program in HIGH QUALITY investments. FADS....will come and go.......interest in stocks and the markets will come and go.....but if you simply plug away and ignore it all....YOU will WIN.

YES......you did get lucky......you started investing during a time of rapidly rising prices as we come out of the pandemic....plus other reasons. BUT....for you.....why or how the markets do what they do....is TOTALLY IRRELEVANT. As a long term investor.....what and why things are happening day to day.....does not matter in the slightest. In fact MOST if not.....ALL....opinions as to what and why things are happening short term are.....simply wrong.....no one knows and it is not predictable.

I LOVE your portfolio. ESPECIALLY the NASDAQ 100 for a young investor......and......the fact that you have it balanced out by the SP500.....which doubles up on most of the holdings of the NASDAQ 100.

Just remember.....there will be times when things are down.....sometimes for a year or two. Just stick to your guns and keep investing....even if others are saying not to. YOU are......a smart lady to be doing.......and thinking.....the way you are.

 

So the markets TODAY..........yeah....how often do we hear a post start like this......or everyone talking about the market....TODAY. ALL the time.....myself included. WELL.....today we are seeing a NORMAL short term market. Over the short term....day to day....the markets will....BOOM, PLUNGE, LINGER, STAGNATE, CRAWL FORWARD, GO SIDEWAYS, GO DOWN, GO UP.....and everything in-between.

THIS.....is called a NORMAL MARKET. YET....in spite of ALL the above.....at the end of the year.....most years.....rational long term investors....WILL.....have made a GAIN in their account. THAT....is just how it works. SO......what is going on and why today? A.....NORMAL MARKET DAY.

I LOVE this little article.....it will be OBVIOUS why if you read it. The message is the SAME as....the message of this entire thread.

Yes, I Do Believe That the Stock Market Is Rigged

https://www.realclearmarkets.com/ar...e_that_the_stock_market_is_rigged_660117.html

(BOLD is my opinion OR what I consider important content)

"The hubbub surrounding GameStop’s recent boom—and bust—has many bemoaning retail investors getting the shaft. Brokerages halted trading in hedge funds’ favor, allegedly. Congressional hearings loom, with opportunistic politicians from both parties screeching about markets stacked against the “little guy.” As i see it, they’re rigged to benefit investors big and small. Today, it’s easier than ever to take advantage. Let me explain.

When starting my career, 49 years ago, investors faced high hurdles. Until May 1975, the New York Stock Exchange enforced strict—and steep—minimum commissions on stock trades. Depending on the stock, brokerages snatched mandatory commissions of as much as 2-3% per trade. Brokers caught subverting these minimums faced expulsion from the exchange. With commissions fixed, brokers had scant incentive to improve services. Bid-ask spreads—the gap between buyers’ and sellers’ offering prices—averaged about 0.6% to 0.8%, further impaling investors’ returns on every trade.

And data were negligible, as I detailed in July. Deep research required scouring library archives and infrequent reports and brokerage guides. There was no Internet to gather data, no spreadsheets to test hypotheses—just painstaking hours spent crunching numbers by hand and with slide rules. Few amateur investors had the time, resources or energy to succeed.

Today, though, notions of capital markets still being an exclusive, white-shoe tycoon’s club are bunk. Regulators’ 1975 “May Day” reforms scrapped fixed commissions, sparking competition that birthed discount brokerages. The advent of no-load and index funds brought low-cost alternatives to formerly dominant 8% load funds. Trading commissions cratered when online brokerages boomed. Recently many brokers scrapped them altogether. Account minimums? Increasingly rare. Small investors can easily buy fractional shares in high priced firms now, an impossibility back then. Bid-ask spreads—up since last winter’s shock—generally trended sharply downward for decades. Data is ubiquitous—anyone can research companies, track portfolios and test strategies with a few clicks on a smart phone.

All this leveled the field for individual investors. There isn’t much hedge fund managers can do that you can’t. But it doesn’t guarantee success. Too many trade too frequently, chase heat or base big bets on well-known information already reflected in prices. Instead of diversifying, sitting still and letting compound growth work its miracles, too many fall prey to emotions, get spooked by volatility and react at the wrong times—selling after stocks fall, buying after they rise.

Too many overlook this simple, basic truth: Stocks rise much more often than they fall. Since 1925, the S&P 500 increased in 75.2% of rolling 12-month periods (including dividends). And 88.0% of rolling 5-year periods were positive—94.3% of 10-year stretches. There have been zero negative rolling 20-year stretches. Zero! Does that sound “rigged” to you? It’s good rigging.

But rather than participating and reaping stocks’ roughly 10% annualized gains since 1926, too many bet on the next Amazon, Netflix or Apple. Meanwhile many try to dodge any and all downside. Some fail to start, believing they need huge sums to impact their financial future. Those falsehoods blind them to what is really necessary: consistency, discipline—and time.

Consider: A $2,400 annual investment—$200 saved per month—not exactly high-roller money. But compounded at 8% over 30 years, it becomes nearly $300,000. That isn’t infeasible if you diversify and stick with it. That road to riches isn’t lined with flashy portfolios and get-rich-quick schemes. As detailed in my 2008 book, The Ten Roads to Riches, it‘s the least sensational but most reliable path to wealth. No one-day windfalls and high-wire-act day-trading. No gushing profiles in the financial press.

This isn’t to advocate a “set it and forget it” investment approach. But the call to action is when you know something others don’t—which is a tall order. The Redditors’ case makes this clear. Efficient markets price in all well-known information near-instantaneously. Hence, the Redditors succeeded because their social media short squeeze developed under the radar of most observers.

It won’t repeat. Those big, bad hedge fund managers many love to hate got fooled once, but they aren’t fools. It’s just like politics or sports. Donald Trump shocked Democrats with his unconventional 2016 approach. By 2020, they were waiting for him. In 1978, an overlooked Leon Spinks (who, sadly, passed away February 5), just eight bouts into his professional career, stunned Muhammad Ali to win the heavyweight championship. But Spinks wasn’t sneaking up on anyone after that—including Ali. He lost a rematch seven months later, and won only half his 38 post-title-win fights.

Now eyes everywhere fixate on trying to profit from social media stock sentiment swings. One fund firm is launching an ETF that buys and sells on social media buzz. More will come. Even if you judged their initial fundamental analysis spot-on, the Redditors’ strategy won’t shock again. Markets will pre-price any potential impact.

So if you can spot an oncoming shock that few see, good for you and more power to you! But long-term success doesn’t depend on that—because the whole crazy thing is rigged—for you.

MY COMMENT

OF COURSE.....I agree completely. HERE is the key to investing.....that hardly anyone acknowledges or follows:

"basic truth: Stocks rise much more often than they fall. Since 1925, the S&P 500 increased in 75.2% of rolling 12-month periods (including dividends). And 88.0% of rolling 5-year periods were positive—94.3% of 10-year stretches. There have been zero negative rolling 20-year stretches."

The.....ACTUAL.....odds ARE in the favor of long term investors. This is why the SP500 is my vehicle of choice for novice investors, experienced investors, those that dont have time to fiddle around with investments. THIS....is why Warren Buffett directed that his trust for his heirs.....HIS FAMILY.....be 90% invested in the SP500.

YES......I and many others own individual stocks. BUT....this is why I compare my return to the SP500. My view......when your individual stocks are FAILING.....and things look bad......and you feel like you HAVE to sell those stocks and HUNKER DOWN......do NOT leave the markets....just put it all in the SP500 and reinvest ALL dividends and capital gains. Take REFUGE in the averages.....rather than give up on investing. You...might find out.....that all the work you have been doing FIDDLING around with individual stocks is NOT NECESSARY.......for investing success.

WHAT is necessary? A simply......lazier focused......commitment to long term investing.......with NO market timing. PLUS....the ability to......BE YOUR OWN PERSON.....and IGNORE all the FADS and PRESSURE from those around you to.....conform to what they think YOU should do. People LOVE to have confirmation that what......they.....are doing is the right thing. SO....they try to convince others around them to do what they are doing. It makes them.....FEEL GOOD......even if they are WRONG. HAVE the GUTS to do your own thing and IGNORE the NOISE around you. At times it will be.....DEAFENING. BUT.....if you want financial success......IGNORE IT and the pressure others will put on you. Even your.......OWN BRAIN....will conspire against you in those times. BUT....ignore the EMOTION......go with the LONG TERM ODDS.

 

I agree completely wit what you said above Zukodany. Historical and other drama with a touch of the romantic......will capture the WIDE audience. In other words....women and all the men that also watch along with them and get addicted to the show.....even if the men will not admit to watching. For example....."The Queens Gambit". Too many of the Action....comic based shows....have gotten to simply be "Hallmark movies" for boys and young men. It gets BORING to the general subscriber public.

Interesting......but NOT unexpected....to see Disney down today.

 

YES......I see that the markets are turning positive........time for me to take off into the weather to get my wife to her second vaccine appointment.

 

Gtrudeau88. I wish I could give you an opinion. But I do not follow many of your holdings. With Lori.......I own and follow many of her stocks and funds.

You asked if I would sell some Tesla if I was her. Actually......I did sell enough of......MY......Tesla as reflected a week or so ago....in this thread......to take my initial investment PLUS a 50% profit off the table. I was able to do this and still have a NICE investment in Tesla....since I had over a 300% return in......8 months.

NOW....whether Lori wishes to take some Tesla money off the table....that is her decision.

 

I have talked about my local housing market many times on here......prices and sales through the roof. HERE is the DANGER of getting caught up in a HOUSING MANIA:

These people rushed to buy homes during COVID. Now they regret it.

https://www.foxbusiness.com/economy/these-people-rushed-to-buy-homes-during-covid-now-they-regret-it

(BOLD is my opinion OR what I consider important content)

Stella Guan spent months searching for a home to buy, getting outbid again and again in the white-hot real-estate market of the Los Angeles suburbs. Finally, her offer on a "beautiful" Santa Clarita house was accepted in August, she says. The graphic designer, 30, paid roughly $600,000 for the house. But after sleeping there for only a few nights, she had an unfortunate realization. "I was like 'uh oh, I hate this house,' " she recalls. "I hate this house so much."

Looking back on it, she reflects, "I should have seen all of the warning signs, but the pandemic housing fever got the better of me."

A house, unlike expensive jewelry or clothing, cannot be returned if the buyer is unhappy with it, so a cardinal rule of home buying is 'don't rush into a purchase.' But in 2020, millions of Americans did just that.

Fleeing small apartments, buying vacation homes or simply looking for a change of scenery amid the crushing boredom of lockdowns, people scrambled to buy houses amid the pandemic, spurring bidding wars and supercharging real-estate markets across the country. Now, many are discovering the pitfalls of these hasty purchases, ranging from buyers' remorse and financial strain to damage caused by unexpected problems.

This spring especially, "people were so panicked," said Priscilla Holloway, a Douglas Elliman agent in the Hamptons, a popular spot for New Yorkers seeking refuge from the pandemic. "Buying a home is a huge commitment. You have to be thorough. But people were getting all crazy, and they weren't as thorough as they usually are."

Many home buyers were apartment dwellers looking for larger spaces to shelter in. "It was a land grab for houses," said Cheryl Eisen, CEO of the interior design and property marketing firm Interior Marketing Group. "People wanted out of apartments."

At the same time, inventory dropped as many homeowners hesitated to list their properties in the pandemic. The result is that much of the country saw a price spike and bidding wars, brokers said, leaving buyers with little to choose from. In these conditions, many are tempted to waive inspections or skip other due diligence they would normally perform before buying a home.

This summer, Ms. Holloway said she helped a family move after discovering that the Hamptons house they had just bought had an infestation of wasps' nests in the backyard. The family didn't find the wasps until after closing because they had waived the inspection in the midst of a bidding war, says Ms. Holloway, who wasn't representing them at the time. Deciding the property was unsafe for their young children, they immediately put the Westhampton Beach home on the market. Ms. Holloway and a colleague helped them find another house to buy.

Over the past two years, the insurance company Chubb has seen large, non-weather-related losses increase in frequency and severity, according to Fran O'Brien, division president of Chubb North America Personal Risk Services. She attributes these losses in part to hasty home purchases: Buyers moving from a small city apartment to a large home in a rural area may not be well versed in how to prevent the pipes from freezing, for example.

"People are moving to places that they don't know a lot about," Ms. O'Brien says. "They're thinking, 'this looks like a nice place to live' for amenities it may have. They don't understand what risk there could be with that home."

People are even more likely to overlook those risks, she said, when they are in a hurry to snap up a home before someone else does. "You run into this lack of awareness and lack of time, which is not a good combination."

A HomeAdvisor report found that Americans did an average of 1.2 emergency home repairs in 2020, up from 0.4 in 2019, while emergency home spending jumped to an average of $1,640, up $124 from the 2019 average.

Nature had an unpleasant surprise in store for Richard and Meaghan Weiss when they bought their first home in Northern California after moving from Brooklyn.

When Covid hit, the couple left their Brooklyn apartment to stay with Ms. Weiss's parents in Sonoma, Calif. Ms. Weiss was pregnant and they had a toddler at the time. "Being cooped up in an apartment, not being able to see people in New York, sounded like a miserable existence," said Mr. Weiss, 40, who works in commercial real estate.

After a few months they decided to relocate permanently to the Bay Area, where Ms. Weiss grew up, and started looking for a home to buy. They found the market to be "super-duper competitive," Mr. Weiss said. They were outbid on one house and backed out of a contract on another when they found out it had serious foundation issues.

Finally, they were able to buy a four-bedroom house they loved in the East Bay, paying about $100,000 over the $1.89 million asking price to beat out another bidder. "We were a little bit overeager because we'd been burned twice," he said. "We probably didn't do the due diligence we should have and looked at everything as thoroughly as we probably should have."

They closed on the hillside house in November. When they returned a few weeks later to move in, "we see all these holes in the siding," Mr. Weiss said. On closer inspection, they found that the wood on one side of the house was "absolutely devastated," with some 90 holes in it. It turned out that the culprits were acorn woodpeckers living in the large oak trees surrounding the house. "Come to find out, it's a systemic problem in the neighborhood," Mr. Weiss says.

The seller hadn't said anything about the birds, he says, and coming from Brooklyn, he and his wife didn't know to ask. Since then they have tried various deterrent devices and consulted with exterminators, but the only permanent solution is to replace the home's wooden siding with cement at a cost of roughly $150,000.

If it weren't for the frothy pandemic market, Mr. Weiss believes, they would have discovered the problem before closing. "I think we would have been slower and more thoughtful and more methodical," he says. "Buying a home becomes emotional. Because we were emotional from losing the first two and the competitiveness, we just kind of dropped our level of diligence and plowed through."

Ms. Guan started bidding on houses in the L.A. suburbs even before she moved there from the New York City area in July. She had a good experience with her first home purchase, a New Jersey condo, and with interest rates low, she was eager to jump into the California market. "I thought it's going to be the same as New Jersey. I'll enjoy the ownership and make money in a few years."

But she arrived in L.A. to find "the most insane housing market I've ever seen," she says. Every house seemed to get 15 or 16 offers, she says, and sell for $100,000 over its asking price. Her offer was eventually accepted on a circa-1975 house with a renovated kitchen in Santa Clarita. At that point, she had been outbid on seven other houses, she says, so she was determined to get this one, even when the inspection revealed toxic black mold and asbestos. "I was really trying to get out of where I lived," she says. "I spent five to six months looking. All of these factors made me say, 'OK, I have to just face it, I can't back out.' "

She sold the house a few months after buying it. After the repairs, agents' fees and transaction costs, she says, "I lost a lot of money." She now lives in a rented studio in L.A.'s Koreatown, where she says she's much happier. "It still hurts," she says, but "it's just good to have my money back and move on to other things. And never see the house again."

MY COMMENT

WASPS.......TOXIC BLACK MOLD......ASBESTOS......even....WOODPECKERS. Yes some valuable advice in this little article.

When we bought our second home......at age 27......after our little HUD shack on the wrong side of the tracks......we moved to the right side of the tracks. The house we bought was a BEAUTIFUL Dutch/Victorian. It was a duplex when we bought it........with the entry to the second floor unit being a outside door to the stair landing. The stairs had been closed in with a wall.

The seller told us he had the original stair case and he would restore it. He actually did.....and....it was GORGEOUS. We loved that home.

BUT.....our one surprize.....the kitchen had an entire wall....floor to ceiling with cabinets....massive amounts of storage. We were psyched to have that much cabinet space....probably 2-3 times a normal kitchen.

When we moved in.....we went over to put something in the cabinets......and......every one was a regular cabinet door....but.....the inside was ONLY about 4 inches deep. ALL we could put on any shelf was something about the width of a can of soup. WE NEVER looked inside the cabinets before we bought.

We STILL loved that house......BUT....we sold it and moved up to an even better part of town about a year later. It was a hot market and we made $16,000 on that house that we had purchased for $42,000. The girl that bought it from us....back in 1977.....still lives there....she is an old lady now.

 

duplicate post

 

GREAT market recovery today......I kind of thought it might happen. A really NICE way for us ALL to end the week. Congratulations to........US ALL. Although I have not looked at my account yet....and often......days like this can be very portfolio specific.