I will soon be doing more buying in two accounts that I manage. The accounts belong to my sibling, my kid and their spouse. In my siblings account I will be investing about $110,000 more. In the two accounts owned by my kid and their sibling....I will be doing $140,000........the profit from their house that just sold.....after paying a down payment of about $110,000 to my sibling......and.......holding out about $50,000 for property taxes, new furniture, an outdoor kitchen, and HO Insurance. I will post when I make these purchases. The money will be allocated to all NINE of my typical stocks in all three of these accounts.
I note in the news today: Freddie Mac gets approval to buy second mortgages on single-family homes It will allow homeowners to tap equity without giving up low interest loans https://www.consumeraffairs.com/new...-mortgages-on-single-family-homes-062524.html MY COMMENT A disaster in the making as this program will no doubt grow and grow and lead to extreme unexpected consequences. Case in point....the actions by Freddie and Fannie that contributed to......Liar Loans......and..... the 2008/2009 near world economic collapse. I note this from the Wall Street journal....although I can only read the first paragraph of this......pay-wall....article. Return of the Housing Godzillas Freddie Mac and its Biden regulator want to guarantee second mortgages. What could possibly go wrong? https://www.wsj.com/articles/return...annie-freddie-biden-second-mortgages-f7ac7d77 "Housing godzillas Fannie Mae and Freddie Mac are threatening the countryside again, and better hide the children. It’s not enough that taxpayers stand behind their $7.5 trillion in mortgages. Now Freddie wants taxpayers to back second mortgages—i.e., de facto consumer loans. What could go wrong?" Nothing like encouraging people to use their home as a piggy bank.
I ended today with a medium LOSS. I also got beat by the SP500 by....0.85%. Basically a nothing day for me today. My RED stocks were.....HD, COST, CMG, and NVDA. TGIF.......TGIF.
It has been a while now since I sold all shares of NIKE......but....I sure have no regrets. Nike warns of guidance cut as it posts slowest annual sales gain in 14 years https://www.cnbc.com/2024/06/27/nike-nke-earnings-q4-2024.html MY COMMENT This company is simply FAILING. It is all due to one thing.....management. They need to clean out their marketing team and their upper management. It is ridiculous that a DOMINANT company like NIKE....is continuing to do so poorly. YES....I have definite thoughts on the cause of this situation.....but I am not going to get into it on here. One thing I will mention on here that I thought it was IDIOTIC at the time was NIKE getting rid of many of their third party retail outlets.
Last day of the JUNE markets tomorrow. It has been a very good month for investors in general. We will be half way through the year. NOW....lets see if we get hit by a typical summer correction or at least a slow-down. If so....that is nothing to get all excited about.
As mentioned…dumb idea. We will all pay for this later down the road. If you didn’t get to experience 2008 as an investor, you get another opportunity.
Please, I need a bit of advice from you financial wizards I've built up a bit of debt over the last couple of years. This is probably due to me over-prioritizing investing. All the debt is on a credit card which is 0% interest. Having said that, the interest free rate is coming to an end soon so I have a couple of options. Option 1 is to sell some of my stocks and pay off the debt. My debt is equivalent to just under 10% of my portfolio. Option 2 is switch my credit card to another interest-free card at the cost of a 3% hit. Then prioritize paying it off over the next year or so. I've just had a fairly good pay rise at work, so going forward I will have extra cash to either pay off debt or invest, depending on what I do. I am tempted to just sell my Apple and Amazon holdings, which is pretty much the exact amount I owe in debt. Then, going forward I will have more disposable income to invest and zero debt. I'm just reluctant to sell 10% of my portfolio as that is going to be tough to swallow. Any advice is greatly appreciated.
Very good year for investors for sure. I just can't believe we are halfway through it! I agree the 2nd mortgage thing is a disaster in the making. As to Nike Failing, GOOD. I hope they go completely under and become a case study for business schools. I have owned the stock, and the shoes. They had the easiest and most successful sales plan EVER. Put shoes on the best athletes in the sport. They felt the need to get on the latest trendy band wagon and it bit them. Athleisure wear has been going crazy the past couple years. There are no excuses. Lori, Where in the world are you finding a 3% credit card!!!! That's crazy low. I'm not here to give financial advice. I have a credit card and pay it off monthly, actually I pay on it a couple times a month whenever I'm on my laptop. I am boring when it comes to money and I see some people play the credit card juggling game but it's just not for me. If you can convince yourself that the money in investments is going to be greater than 3% then the math would say that makes since. Usually the idea of paying off debt first is because the interest rate is so enormous it's a no brainer. One of many options would be to split the difference and cash out stocks to cover half the amount and transfer the other half. End of the day is what makes you sleep best at night.
That's my thinking, Tiresmoke. There is surely a good chance the money invested will earn me more than 3%. I don't usually play the credit card juggling game either, but I am where I am. I just had a quick look and there are 6 credit cards currently available to me, all under 3.5%. I would like this debt cleared but I don't want to sell 10% of my portfolio lol.
I understand the feeling! I think it's awesome that you are analyzing your situation and planning out a reaction. Life has some crazy twists and turns and sometimes you come out the other end with a balance on your credit card. At the rates you have it's not the worst thing. One thing you can do is do that math out on a piece of paper. Let's say you have $10,000 in dept. If the S&P returns 7% next year you have an additional $700 on that money, If your debt has a rate of 3.5% then you paid them $350(a little over due to compounding monthly assuming you make no monthly payments). Is the $350 gain worth the risk? Another option is to sell a little each month and pay it down. End of the day debt with interest erodes your net worth so while there are a lot of ways to address it the important thing is that you are addressing it.
Some good points to Lori already given above. For me, I like to eliminate debt when I have the opportunity. Once it's paid and gone...it's gone. Then you can go on with whatever your plan is.
Lori, are you sure it’s a 3% credit card and not JUST a 3% charge to the transfer amount? And afterwards normal credit card rates month over month?
Some good discussion above for Lori. I think all of it makes sense.....either way. What I would do if it was me is whatever makes me more comfortable. The key either way will be discipline, discipline, discipline. BUT regardless......the primary thing is to STOP charging on the cards unless you can pay it off each month. Now is the time that you have to be brutally honest with yourself about your ability and strength and determination to pay off the cards if you do the balance transfer. You also need to be very disciplined if you do sell some stock....to not put more charges on the cards going forward. AND.....dont beat yourself up.....we have all been there....it is just a life lesson that everyone learns. If it was me...... I would probably bite the bullet, sell some stock, and pay off the debt. I would than be EXTREMELY disciplined and determined to not get in the same situation again. I would also be determined to use the extra money from the pay raise to invest more. I would probably give myself a raise by keeping about half my raise to add to my monthly money.....the other half I would invest. Let us know what you decide.
MORE good news for FED cuts. Fed's preferred inflation gauge shows prices rose at slowest pace since March 2021 https://finance.yahoo.com/news/feds...-slowest-pace-since-march-2021-123231380.html (BOLD is my opinion OR what I consider important content) "The latest reading of the Fed's preferred inflation gauge showed inflation eased in May as prices increased at their slowest pace since March 2021. The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 0.1 % in May from the prior month, in line with Wall Street's expectations and slower than the 0.3% increase seen in April. Core PCE was up 2.6% over the prior year in May, in line with estimates. May's reading marked the slowest annual gain in more than three years. BMO senior economist Jennifer Lee told Yahoo Finance that May's inflation reading was "probably the best one could expect." "It certainly helps the Fed, [and] gives them a little bit more comfort on their path to starting to ease policy," Lee said. The report follows other promising May inflation prints. The most recent reading of the Consumer Price Index (CPI) showed core prices climbed 0.2% from the prior month, lower than economists' estimates. The recent prints have consumers feeling better about inflation's path. The latest University of Michigan Consumer Sentiment for June, also released on Friday, showed consumers expect 3% inflation in the year-ahead, lower than the 3.3% they expected in May's survey. But after surprisingly hot inflation readings to start the year, Federal Reserve officials have remained cautious about inflation's trend, noting in their most recent policy statement that it won't be appropriate to cut rates until they have "greater confidence" in inflation's path. "There has been modest further progress toward our inflation objective," Fed Chair Jerome Powell said during a press conference on June 12. "We will need to see more good data to bolster our confidence that inflation is moving sustainably toward 2%." MY COMMENT Another good economic report for the FED and rate cuts. We have plenty of time to watch what is happening....I doubt the FED will be doing any cuts before late Fall. So this one report is not the end all be all for the economy or the FED.
We are seeing a little rally today. Nice. ALL the big averages are up nicely so far. The economic data above should help to sustain this rally to the close today.
Here is the other economic data that is helping the markets today. 10-year Treasury yield falls slightly after May inflation measure comes in as expected https://www.cnbc.com/2024/06/28/us-treasury-yields-ahead-of-pce-inflation-data.html Currently at 4.824%.....a slight drop.
The above is about it for what is going on today. There have been a couple of Supreme Court decisions that will impact government regulation......(a good thing for business and stocks).....and also impact the ability of government to deal with homeless issues. These are generally side issues for investors....and lap over into politics......so I have nothing further to say about this.
Lori. If you are going to sell some stock....If it was me...I would sell my worst performer. If I had a stock that I was not too happy with this is the time I would sell it. My goal would be to use this as an opportunity to fine tune my portfolio and get rid of lesser performers. My goal would be to keep my winners and let them run.....especially companies that have a good long term future ahead of them.
You've already gotten good advice. Only thing I can add is Munger's advice . . . invert, always invert. So thinking about it from the "other side" . . . If you had a $90k portfolio right now would you borrow $10k on credit cards to make it a $100k portfolio?
A medium loss for me today to end the week. I lso got beat by the SP500 today by....0.35%. A WIMPY day to end the month of June.
