One of the main reasons to not have the majority of your portfolio invested at any given time. CASH is good for the down days. Curious if any of you hedge with options, sell calls. Buy puts etc.
No options or margins for me. Just straight cash. Of all my money, 2/3 in IRA which is out of my control. 1/3 I control in my TD Ameritrade account and I do have most of it committed to positions.
TODAY....is the EXACT reason that long term investing is the ONLY form of investing strategy that ACTUALLY works. Playing the short term game......is just that.....playing.......and.....a game. Day to day the markets are OFTEN........IRRATIONAL....driven by fad, rumor, insider games, panic fear, euphoria, giddiness, media baloney, politics, etc, etc, etc. Some times.....most of the time.....it is impossible to know why anything is happening day to day. Sure you will see the MEDIA experts telling you.....every day.......EXACTLY why whatever is happening.....is happening. That commentary is simply opinion and WILD ASS guesswork. I CERTAINLY do NOT agree with the comment by Rustic1......that market volatility is: "One of the main reasons to not have the majority of your portfolio invested at any given time." In FACT.....I believe that the opposite is true....at least if you want to be an actual investor........and....ACHIEVE......or have a chance to beat.....if you are good enough...... the gains that are achieved by the Indexes like the SP500, or the NASDAQ 100, or even the DOW. The INDEXES are 100% invested.....ALL THE TIME. The ACTUAL research continuously shows that being fully invested ALL the time produces the best returns over the long term. Having the majority of your money in cash at any given time is a SURE way to NEVER perform well. It means that you will simply be investing according to......short term GUESSWORK and short term FAD. Trying to play defense against some unknown.....chance....that the markets might not do well.......will NOT turn out well. It ALSO means.....that you will be investing with one hand tied behind your back since CASH......is unproductive money. The short term markets are INHERENTLY volatile.....for the reasons listed above and many more. The ONLY way to avoid that.......IRRATIONALITY....is to fully invest for the long term.....because....over the long term the markets WILL be RATIONAL and stocks will revert to where they should be based on ACTUAL business operations of the companies that they represent. In other words.....FUNDAMENTALS. We have seen a HUGE influx of inexperienced and....frankly DUMB.....money coming into the markets over the past couple of years and ESPECIALLY this year. SIMPLY a gambling mentality. YES.....those people do have the numerical power to move the markets up and down and sideways........day to day over the short term......often based on NOTHING....at least nothing that has any rational basis to actual investing in a "BUSINESS". My view is.......the ONLY way for me to TOTALLY SEPARATE myself from that very DUMB short term money is to invest for the long term. SO.....that is what I continue to do. ACTUALLY.....I am guessing...that the markets will be positive by the close today. Of course that is just....."MY".....shot term guess......and.....by my reasoning above.......IRRATIONAL. The BIG DIFFERENCE is......I am NOT betting my money on it.
I agree with one minor caveat. Keeping a small amount of cash available to take advantage of an obvious short term gain doesn't seem like a bad idea. Case in point is novavax. They were at 130 or less for a while and upon releasing their UK vaccine trial results, shot to over 300. One can have an investment mindset while still taking advantage of short term opportunities like this one. You just have to keep the $ amount for short term gains small.
If you....prefer.....to have some explanation for why the markets are doing something today......here is what I consider.....at least....a reasonable explanation: Stock market news live updates: Stocks erase gains after reaching record highs https://finance.yahoo.com/news/stock-market-news-live-updates-february-10-2021-232028710.html (BOLD is my opinion OR what I consider important content) "Stocks turned lower Wednesday morning, and the S&P 500 tracked toward a second day of declines. Each of the three major indexes declined intraday after rising to reach record highs shortly after market open. However, all three major indexes have performed strongly for February to date, as has the small-cap Russell 2000, which reached its own record high before turning slightly lower. Companies that reported quarterly results in the last day largely topped expectations, adding to the pile of estimates-topping reports for last quarter. Lyft’s stock (LYFT) surged more than 8% after the company said it could be profitable as soon as the third quarter this year, or a full quarter ahead of earlier estimates, thanks to rigorous cost-cutting measures. Shares of Twitter (TWTR) jumped 9% after the company’s sales grew more than expected and its profit beat estimates, though it warned that user growth will likely slow in 2021 after a pandemic-era boom. So far, companies comprising more than three-quarters of the S&P 500’s market capitalization have reported fourth-quarter results. In aggregate, these results have topped expectations by nearly 17%, and 80% of companies beat their own projections, according to an analysis by Credit Suisse’s Jonathan Golub. But even amid strong earnings and supportive monetary and fiscal policy, some strategists have begun to debate whether the recent leg higher in markets can be sustained in the very near-term as sentiment starts to get frothy. “We’ve seen a very strong phase of what I’d call fast markets: A strong rally the last six months in risk assets across the board,” Joseph Little, HSBC Global Asset Management global chief strategist, told Yahoo Finance. “And what that means in practical terms for investors is that a lot more is now discounted. And the story around recovery, around faster economic improvements, around the vaccines is now, at this point, well-known to investors and to other market participants. And that poses the question of what could happen to markets next.” “My suspicion is that we’re at a point now where, as more is discounted, it becomes harder and harder for the news to really support the market further and further. And that creates what I call a hypersensitivity,” he added. “It means markets are rather vulnerable if the news flow becomes a little bit more difficult, if the news flow begins to disappoint. I’d still be positive as we look out over a six month view. But it could mean that after the run that we’ve seen, we’re in line for a phase of maybe a bit more consolidation.” Others, however, have remained more upbeat. “It’s clear that there’s a lot of optimism out there, but I would argue that there are good reasons to be optimistic. Keep in mind that just six or eight months ago, there was an expectation that it would take much longer, if at all, to develop a vaccine that protects against COVID-19,” Kristina Hooper, Invesco chief global market strategist, told Yahoo Finance. “The fact that we have effective vaccines, extremely effective vaccines that are now being distributed means that there is a light at the end of this tunnel and it is a bright light, hence a lot of optimism. Especially given we have a very accommodative Fed, and we also have a decent amount of fiscal stimulus and potentially more coming.”" MY COMMENT YES......what is going to happen in the pandemic world and business world over the next 12-24 months is going to be strongly positive for the markets in general. Day to day......WHO CARES. The greatest NEGATIVE going forward......the policies that will come from government and will build like a HUGE snowball dragging the markets and business environment DOWN. As the tax policy, executive order policy, massively increased regulations, illegal immigration, selling out of the AMERICAN worker, etc, etc, etc.......and......MOST important.....the general attitudes and NEGATIVITY of the government builds over the next 6-12 months to hit its peak......THAT will be the REAL drag on business and the economy. THIS........the current political situation....is EXACTLY part of the reason that I invest in the.......BEST OF THE BEST.........BIG CAP, ICONIC COMPANIES, with GREAT PROVEN PRODUCTS and BUSINESS MODELS.....GREAT MANAGEMENT....WORLD WIDE SALES POWER, etc, etc, etc. AND.......in spite of everything.......I KNOW that the ONLY way to move forward with my personal money is to continue to be fully invested in.......RATIONAL AND REASONABLE......investments.......for the long term. AND......when I say the items above will be a DRAG on the markets......that does NOT mean that I believe the markets will necessarily be down......it "MAY" mean that instead of achieving a return of.....lets say 15%....we might only hit 8%. These percentages are not a......prediction....just an illustration......that NEGATIVE POLICY.....does not necessarily translate to completely negative returns......but rather can more often translate to......positive but impaired returns.
AND.....here is another....just as reasonable explanation for the short term market behavior today.....not that it matters to ANY long term investor....why or how the market is doing something day to day. The REALITY is that short term.....day to day...markets ARE volatile.......especially NOW with all the DUMB money......ESPECIALLY with much of that DUMB money........ being amplified by options trading on leverage. Wall Street rally runs out of steam ahead of Powell talk https://www.reuters.com/article/us-...t-of-steam-ahead-of-powell-talk-idUSKBN2AA1F3 (BOLD is my opinion OR what I consider important content) "Wall Street’s main indexes slipped from record levels on Wednesday as investors digested recent gains while awaiting a speech by Federal Reserve Chair Jerome Powell for clues on the pace of an economic rebound. Tesla Inc’s 4.2% slide and Amazon.com Inc’s 1.1% drop weighed the most on the S&P 500 and the Nasdaq. Shares of both the companies pulled the consumer discretionary index down 1.3%. Bets on more fiscal aid and swift vaccine distribution have powered the main U.S. stock indexes to a series of all-time peaks recently. Wall Street’s fear gauge spiked to a one-week high of 23.85 points. “The markets been very speculative with particularly high-risk stocks trading up very quickly. And when you get that type of move, you’re always going to get a little bit of a need for those investors to get out quickly if they see it turn,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey. “We probably should expect a few downdrafts even without any news whatsoever.” At 10:44 a.m. ET, the Dow Jones Industrial Average fell 149.21 points, or 0.48%, to 31,226.62, the S&P 500 lost 25.08 points, or 0.64%, to 3,886.15 and the Nasdaq Composite lost 144.86 points, or 1.03%, to 13,862.84. Data on Wednesday showed U.S. consumer prices rose moderately in January but underlying inflation remained benign as the COVID-19 pandemic continues to be a drag on the labor market and services industry.[nL1N2KF34U] The Fed has signaled it would tolerate higher prices “for some time” as the economy climbs out of a coronavirus-driven recession. Powell will be speaking about the state of the U.S. labor market in a webinar at 2 p.m. ET (1900 GMT) on Wednesday. “Everyone expects inflation to rise but no one knows how quickly the Fed will react given what the central bank has signaled,” said Arian Vojdani, investment strategist at MV Financial in Bethesda, Maryland. President Joe Biden on Tuesday agreed to a proposal by Democratic lawmakers to limit or phase out stimulus payments to higher-income individuals as part of his administration’s $1.9 trillion coronavirus relief bill. Fourth-quarter earnings have also exceeded expectations with analysts now predicting earnings for S&P 500 firms will rise 2.5%, a stark reversal from the 10.3% decline forecast at the beginning of the year, per Refinitiv. Twitter Inc added about 13.6% after it forecast a strong start to 2021 as ad spending rebounds from a rock bottom. Under Armour Inc advanced more than 9% after the athletic apparel maker beat quarterly revenue estimates. Lyft Inc jumped 8% after the ride-hailing firm said it is chopping costs and now expects to be profitable in the third quarter. Rival Uber Technologies Inc gained 4% ahead of its results, while Walt Disney Co, also set to report after markets close, rose 1.2%. Declining issues outnumbered advancers by a 1.3-to-1 ratio on the NYSE and by a 1.6-to-1 ratio on the Nasdaq. The S&P 500 posted 42 new 52-week highs and no new lows, while the Nasdaq recorded 545 new highs and 18 new lows." MY COMMENT See "MY COMMENT" to the post above.......no need to repeat it.
Times change, mentality of some of the older people refuse to. Options are a good vehicle that have more leverage with less capital invested. Purchasing LEAPS on the solid companies that will advance forward can be way more profitable than having ALL of your cash tied up. They also can be exercised. I held a decent sized portfolio that I built up by trading my way into positions over the years. The majority being house money as I focused on regaining my buy in amount and keep the profit in shares, I constantly sold calls for extra income and would buy putts when I felt it necessary to protect the positions as some/most were enrolled in the DRIP plan. We all have different methods, but I have always felt it was FOOLISH to be fully invested at any given time. If/when we see a correction the fully invested individuals are trapped with no funds to add to their SOLID positions and simply have to ride the storm out. We can't time the market, but we can be better prepared. I liquidated earlier and have missed on some gains but have done well being patient and still have my CASH instead of the 1 position I hold.
SO.....we will just have to agree to disagree......on the majority......if not ALL....... of what you say above. BUT.......this being a FREE SPEECH thread.....at least so far.....no problem with any view being expressed.......it is ALL personal opinion.......ONLY time.......years......will show what WAS actually the TRUTH. AND....by that point what is being opined now.....will be...... the distant past. That is why EVERYONE has to and should invest as they see fit.
I did look at my primary portfolio a few minutes ago for the first time today. Two positions UP.....HD and NVDA.....the rest following the general markets today. HOVERING.....just below my all time high......at least in relative percentages. Volatility.....actually.....does not concern me. That is part of a normal market. It will ALL look pretty TAME when you look at a chart for the year or a longer time. Even the BIG drops....look pretty tame when looking at a ten or twenty year chart of thee Indexes. In fact....like many times in the past.....I would actually welcome a nasty correction or even a short bear market to.......SHAKE OUT.....money that should not be in the markets. (DEFINITELY NOT a comment on ANYONE on these boards) This is just part of a normal and usual market. Every once in a while....we need a good housecleaning.
Didn't mean to get your feathers flustered. You should welcome comments instead of being combative, gives more credibility to your cause. Capital gains are the purpose of anyone in the markets, whether it be longterm investors or traders. The SMITH BARNEY days are long gone and the new generation of people are the high speed internet of the dial-up days. Some of us have learned to change with the times just as others refuse. I will quit posting in your thread as a token of respect and wish all of us the best whatever avenue we decide to pursue.
I agree with WXYZ, always be fully invested for maximum profit. But only if you have access to cash Case in point, my wife and I had an emergency fun of $5K and it always killed me that it was just sitting there doing nothing. It was for an emergency but for as long as we've had it , we never used it. Then one day we thought, well we have a Home Equity Line of Credit HELOC. If we ever did have an emergency, we do have access to that at a low interest rate. And by the same logic, why have cash just sitting in my brokerage account? In the rare case where I need money to invest, I can take it out on the HELOC and pay it back over time. Until that time where a great value stocks crashes for whatever reason, all my money is put to work. If you don't have access to cash when you need it.... I think I would still say invest all your money. Yes you'll miss out when a great stock goes on sale but how often does that happen vs. having your money invested for dividends/capital gains. The only time I hear of people having money on the side is when they're playing with hundreds of thousands of dollars and can afford to have money just sitting there.
This is an interesting point of view. If I was a 25 year old index investor but retained my current market knowledge, I would probably be fully invested. And yet, I am not much below 50% cash with more cash coming in 35 days. I embrace your comment that people lose their ability to embrace change, as they get older. It's not particularly controversial, to be honest. Older investors miss out on new opportunities and can often be heart explaining how nothing is ever going to change. Meanwhile, young investors can easily be lead into investments promising ridiculous returns, have their money taken from them, and they are quick to jump into the next get-rich-quick scheme. I've long thought there is probably an optimal age for an investor. It would be unique per person. Whatever that age is for me, it seems likely to be in the past but recent returns suggest I am still at my peak, despite my advancing age. Warren Buffett seems to have lost a couple of steps from his game. He has made some extremely questionable decisions, including buying IBM. And yet, his performance continues to be outstanding. His peak years seem to be 50~60. Please notice, the Y axis of this chart is logarithmic. I appreciate the age diversity of this site. Some time ago, I felt like I should not subject anyone to long term preaching but changed my point of view when I realized that trading will always be the primary ethos at Stockaholics. There is nothing wrong with that but there is also nothing wrong with me sharing my own point of view. The more philosophic diversity, the more opportunity for all of us.
Yep all my investment money is in. I don’t wait for dips when I have money for investing it goes into the account and the trigger gets pulled. I have money going into my boy’s trusts and will clear by end of day. Plan on adding to there Apple shares ASAP. Hey I got a life to live and don’t have time for timing markets. Happy Investing!
Rustic1 Dont be so sensitive. Why would you assume that my feathers were ruffled when I posted: "SO.....we will just have to agree to disagree......on the majority......if not ALL....... of what you say above. BUT.......this being a FREE SPEECH thread.....at least so far.....no problem with any view being expressed.......it is ALL personal opinion.......ONLY time.......years......will show what WAS actually the TRUTH. AND....by that point what is being opined now.....will be...... the distant past." My opinion is.....the more opinions and the more diversity in opinions and investing style.....the better on here. I even think someone can....possibly....be a long term investor.....as a day trader. If that is what they do as a long term strategy. I used to be on another investing board for a long time. Over time there got to be a few posters with very different investing and economic views. Just like always happens with HUMANS...others started to attack the minority view and different opinions more and more. The board got to be one big BATTLE and very unpleasant. After a while....everyone...that did not conform to the majority view left......and....over time the board got to be really boring. Of course over time....it all just disintegrated into nothing but politics and everyone left that was not in line with the particular politics. Eventually.....the board died and just became a BIG ECHO CHAMBER for the very few people left. Just one or two people....talking to the wind. I have made it very clear on here that......any view......is WELCOME. BUT.....that does not mean we have to agree.....and can not reply or challenge that view........politely. AND.....anyone on here is WELCOME.....to disagree with or challenge anything I say. I ACTUALLY believe in FREE SPEECH.......and support the right of ANYONE to say what they wish. SO......if you wish....feel free to post........any view...... no need to: "I will quit posting in your thread as a token of respect and wish all of us the best whatever avenue we decide to pursue." I am PERSONALLY......NOT into message board DRAMA at all. SO......post if you wish.
AND....last comment......I DO APPRECIATE what you said......AND welcome your comment....it gave me the opportunity to give my opinion in reply. I try to.....very carefully....preface the majority of opinion posts with....."I believe"....."my opinion is"......"personally I think". AND.....for anyone.....I DO NOT CONSIDER THIS "MY" THREAD......no one OWNS a thread. BUT.....it is what it is......so moving on......
You seemed to get a little flustered. I tend to shy away from negativity. This forum was built on the guide of helping people become better informed and educated. I wasn't offended and hope to see people like you continue to do your job of the intended purpose of being the new HSM. We need members not drama and we can all agree that capital gains is everybody's goal in life.
There’s many many things to consider when getting into the stock market... But the most important rule that we must know is that we are ALL different and that no ONE rule applies to all You can have cash sitting on the sideline all day long waiting for the correction to come And me too But you may end up figuring up the correction has begun whereas I haven’t or vice verse You may end up waiting for a bottom and so do I. But I will likely find a different bottom than you. and finally. You may have great patience and wait for that correction and be 100% on the money. All the time. but I may end up just feeling lucky and gamble my money with that side money reserved for a correction just because it is there. So yea, I disagree about the age thing. I disagree that there’s one method of investing/trading. I ONLY AGREE THAT EVERYONE IS DIFFERENT
SO......as usually happens.....ANOTHER last comment. NO....I was not flustered.....I am an EXTREMELY clinical and rational person.....perhaps sometimes too much so. Being....."OLD".....I have no idea what a HSM is. The only thing that I could think of was......Hardware Security Module or encryption. AND....somehow I dont think that is it. LOL. SO.....come on Rustic1.....give me a hug and a kiss. You will probably make Zuodany jealous.
My day today........investing.....ok for a down day. I ended up in the red...a bit. AND....got beat by the SP500 by .20%. BUT.....I am hovering about one half a percent from a personal all time high. My GREEN holdings today....NKE, HD, HON, GOOGL, and NVDA. My best result was Nvidia....which was UP by $20.04 or 3.51%. So glad that I took my original investment money in TESLA off the table the other day....whatever day that was. (see the post where I mentioned it in real time) I am not too sure that the Bitcoin thing with Tesla is a positive. To me it makes MUSK look a little bit erratic.......putting that much company money into such a speculative financial vehicle. Although he probably made at least half a billion dollars.....right off the bat.....assuming....that his tweet was after-the-fact and that he did the investment at a much lower price than the POST -TWEET price.
