It appears we ended the week once again in good shape. Some good posts above about making a plan and just sticking with it. In todays world, the countless amount of economic reports, headlines, pundits, and forecasting can seem overwhelming. We can find and research just about anything. That can be good in moderation at times, but it can also be too microscopic and lead to decisions of emotional investing as well. As to the shopping report, many of the local shops were bustling with activity and customers. Some brief chats with some of the owners and they have seen a steady up tick and a booming past week. They expect to finish out the last week with a bang. It was busy for a week day/middle of the day I thought. Good to see and I wish them a strong finish. So, get out there and finish up those lists if you haven't already. Also, don't forget about your local shops. I have found some of the most unique and special gifts at these places over the years.
Also, as I have mentioned a few weeks ago. As we get closer to closing out the year, now and the next few weeks is a good time to take a look in the rearview mirror. Take a look at what has transpired and see what you think. Have you learned more about yourself as an investor? Your risk tolerance, needs, and ability to navigate it all. It is a good time to review those things and kind of take a moment to evaluate all of it. These things will help in the long run of investing. It doesn't need to be a complex task or busy work. It is also a good time to look ahead. Maybe there are little ones that will no longer be little before you know it. College plans? How about yourself, maybe the runway of retirement is on the horizon. Maybe you are in the thick of your career and doing well putting your money to work for down the road. More contributions? Maybe a change in allocations. Take a look at your timeline of goals and think about it. You may be right where you want to be and that is fine. Don't reinvent the wheel. The point is....take a breath and give it a once over and evaluate yourself and plan...not someone else's....yours.
I agree that now is a good time to reflect on another year as a long term investor. Sitting on a ATH this December, hitting a very low bottom last Nov/Dec after being at a ATH in December 2021. One heck of a ride. My portfolio is not diversified and not for the faint of heart! I feel comfortable taking the risk because 1) My 401k is properly funded and safely invested in the S&P500, 2) The needs of my family are covered and not reliant on this money. I like well know brands with excellent leadership. I go into chip stocks about 8 years ago and I have been investing for 15 years or so. I started with Ford, General Electric and vgt. That moved into AMD Boeing and Amazon which I did pretty well on both. In the covid time frame I dabbled in Nike, Chewy peloton and some Snowflake. All junk in my opinion even if I did make gains on them. I have always hung onto VGT and love the ETF and will always own it. The reason the position is so small now is because I sold it off to put a down payment on my house and I moved some money into NVDA when it was near the bottom. I have not sold a single stock in 2023 and don't plan to. I am letting the winners run. 401k: 24.9% return year to date. HSA: 24.4% return year to date Portfolio NVDA (55% of portfolio): 241.5% AMD (45% of portfolio): 117.4% VGT (<1% of portfolio): 52.4% The other thing I did today is graph out my yearly income since I started working after college. I have done this before but I took it one step further and inflation adjusted every year. It's a simple exercise that is pretty interesting. While I have gotten raises every year I really have only received 2 real raises. One after 4 years and the 2nd at 12 years. I have learned that nobody is just giving you a raise because you deserve it. Squeaky wheel gets the grease. The raise at 12 years came after I asked one of the directors for a letter of recommendation. I told him I love working here but just can't afford to stay
Very good stuff above guys. Anyone else.....feel free to post how you are doing this year.....your investing strategy or philosophy.....the good and the bad for you this year......anything else you wish. Personal stories are more interesting and have more lessons than some financial news article.
I was just looking at past statements from my self-directed IRA and I lost 15% in 2022 and as mentioned earlier I'm up 26.78% in 2023. This % include dividends received. The total returns (includes dividends) for the S&P 500 for 2022 was -18.11% and for 2023 ytd is 24.89%. My data is coming from S&P 500 Total Returns by Year Since 1926 (slickcharts.com) This brings me to my questions: - I've seen multiple websites advise people who are either not interested in learning how to invest or who don't have the time to learn about investing to just park their $ in an S&P based etf or mutual fund. Is this a wise strategy or can an investor invest successfully, beating the S&P 500, without too much of a learning curve? If anything I would choose an etf like VOO over a mutual fund due to the fees. --- My strategy has been simplistic, maybe naive, but seems to be working. I assume stock analysts have some measure of knowledge I don't and while they are fallible, are likely to be more right than I. I stay with companies I know but I look at analyst price targets for the next 12 months. I ignore the high estimates (i.e. wishful thinking), look at how much I can gain if the stock achieves the median estimate, and how much would I lose if it would hit the low. I'm inclined to sell a position if I reach close to the median, even if the gain is under my 20-25% ideal. According to my method, the best stocks to buy are established S&P 500 companies, current price near the analyst lows, and have a good 15-20% gain if they reach the median. Obviously I'm not a true long term investor like WXYZ but I'm not a day trader either. I'm in the middle. - If someone wanted to beat the S&P 500, what do they have to do to achieve that goal? Some basic principles might be to only invest in established solid companies (Apple, Costco, John Deere, whatever), learn when to cut losses (7-8% for me. yeah I know my EQT lost 15%!) and take gains, invest in dividend bearing stocks. What else would you add? Would you say to let no more than x% be in a single stock or sector? Anything else? G
Since you asked...here are some things to think about. The VOO SP 500 ETF is a great investment to use in a portfolio or even by itself. It appears that you do like to trade a bit and change some things in the short term. One could take the VOO SP 500 ETF that you mentioned and use it as their core holding. Set up your contribution level to it and stay true to it no matter what. Keep it. Decide how much of that particular fund you want within the portfolio. Is it 50%, 65%, 80%, 90%??? Only you can decide what works for you and your financial plan/goals. Some will hold an SP500 fund and tilt a bit more to Tech in individual stocks or even a Tech index fund. Some may do the SP500 and add some small cap funds, dividend funds, or add a few individual companies/stock. There are more ways than reasons out there today than at any other timeframe. Will any of this beat the SP500 by itself? Maybe...maybe not. Something is always in/out of favor in the market. Time and companies change. Since you do like to trade a bit or at least hold some things on a shorter term, you could allocate a percentage of your portfolio to do your "stock picking." I would keep it at something you can afford to lose and not allow it to derail the financial plan should the picks/companies turn out not to be so great. Manage risk to your tolerance level. You mention "cutting losses at 7-8%." This seems like you are going to be in and out of positions....a lot. You may like trading more than you think.... Look at your portfolio as a whole. It is the whole machine that is doing the work for you. I want that machine to be consistent and easy to manage...but that is just me.
YES.....a SP500 ETF is better than a SP500 Index Mutual Fund. The ETF will tend to have less distributions that trigger taxes. VOO is a perfect way to invest in the SP500. Just my personal view......NOT INVESTING ADVICE TO ANYONE. It is extremely unlikely that any one investor is going to beat the SP500 over the long term. The vast majority of professional investors and fund managers can not do it. I believe it becomes even less likely if trading is involved. if short term trading is involved....less than a year.....it is even less likely in my view because any gains that you make and realize are going to be taxed as regular income. I have yet to see any trader take their Income Taxes into account when they talk about their gains. As to whether you......"gtrudeau88"....can successfully beat the SP500 over the longer term will only be known when you look back at your results in about 7-15 years down the road. There is no easy answer to what you ask......... other than being honest with yourself and looking at your REAL returns over some time period. I would say the results we are all seeing this year are an extreme aberration since we are in the middle of a historic bull market......so this might not be the best year to use as a measure of investing competence or ability......for "you"....."me"...... or anyone else including the professionals. BUT.....I will say....CONGRATULATIONS....being Up by 26.78% in any single year is OUTSTANDING.
A very normal market week ahead. Fed's preferred inflation gauge and Nike earnings: What to know this week https://finance.yahoo.com/news/feds...arnings-what-to-know-this-week-182521859.html
I stayed the course. No changes and I am up about the same as those who have a sizable NVDA holding. Sure makes up for a lousy last year, that's for sure.
This right here " It is extremely unlikely that any one investor is going to beat the SP500 over the long term." The simplest, single best piece of advice that everyone chooses to ignore. I have been lucky with my chip stocks but I know full well that a Black swan can erase those gains in an instant. It would be interesting to do the exercise and see if over my decade and a half of investing if all my transactions went into the S&P vs all the individual stock trades where would I be right now. My investment account is kind of an anomaly due to the fact out of lucky timing I put some large chunks of money into two stocks that ran. This is the exception, not the rule. In my opinion there is no reason to own a mutual fund, the fees are too high and the distributions cause unnecessary tax loss. ETF's are the way to go with my specific liking of Vanguards VOO and VGT. VGT has been beating out VOO and has top holdings in Apple, Microsoft, Nvidia, Broadcom, Adobe, Salesforce, Accenture, Cisco, AMD and Oracle. If your entire account was in VGT you would be up 52% year to date. On a 1 Million dollar account that's a $250k win over the S&P500 this year. But in years like last year you will have bigger drops, but to it's defence the rises have trumped the falls. Google is your friend. Use Google finance to compare stocks over different time frames 1 day, 1 week, 1 month, 6 month, 1 year, 5 year. Also look up what the Fee % the fund is charging. For those that have 401k's LOOK AT THE FEE'S! When I first started I had a Blackrock 2050 plan that underperformed the market AND charged me to do so! Remember a fraction of a % is BIG money over a 40 year working career.
I have seen a couple of......"new"....fear mongering topics being floated recently. The first is that there are issues with demand in the Treasury sales that could disrupt the market for Treasuries. I saw an article similar to this one....over the weekend. Treasury bond auctions have been ugly lately, and weak demand could be a 'canary in the coal mine' https://finance.yahoo.com/news/treasury-bond-auctions-ugly-lately-204501353.html The second fear mongering issue I am now seeing on many sources is......TOO MUCH EXUBERANCE. We appear to have..... suddenly....over the weekend.....now moved to an irrationally exuberant market. Too fast, too furious: Is the stock market getting ahead of itself? https://www.thestreet.com/investing/is-the-stock-market-getting-ahead-of-itself-say-it-aint-so I heard this being repeated on one of the business TV shows today and saw numerous articles over the weekend. MY COMMENT I say......GREAT....I am tired of the same old fear mongering topics. It is about time to get some new topics. I dont give any credibility to any of the fear mongering topics.....old or new....since I am a long term investor and all of them tend to be short term issues. In addition RARELY do any of them actually cause any sort of problem to the markets.
A good market open today with all the big averages positive at this moment. I dont see any irrational exuberance in the open today....at all. If anything I see the open today as moderately muted considering the FED announcement last week. I see lots of good potential....for the markets overt the coming months.
I will be the first to say it......MERRY CHRISTMAS and HAPPY HOLIDAYS. 'Twas the Night Before Christmas': Economic Review & Outlook https://www.realclearmarkets.com/ar...stmas_economic_review_and_outlook_999170.html (BOLD is my opinion OR what I consider important content) "’Twas the night before Christmas ’neath a nearly full moon, And I knew that Santa would be landing quite soon. So as in years past, by the fireside did I wait When the whoosh of his sleigh proved he wouldn’t be late. He announced his arrival with a chuckle and grin, And if I was ready, he’d gladly begin Sharing his insights that were so often profound His recall of events rarely failed to astound. He first spoke of surprises he judged most delightful Inflation, he noted, had turned somewhat less frightful. But last year’s price hikes weren’t even partly reversed And with prices so high we still feel that we’re cursed The job market’s still strong, unemployment’s still low, So, consumer spending has continued to grow. And from the comfort of home more people now work Making them feel like they’ve won a valued new perk. Santa laughed at those who deemed this a soft landing He chortled: “That means we’re not moving but just standing!” “Be they hard or soft, landings come at a flight’s end, While staying aloft means expansion will extend.” But not all sectors have fared as well as the rest, The housing market, for one, has been put to the test. With mortgage rates standing near a thirty-year high, Far fewer home-seekers have been able to buy. High int’rest rates are now the markets’ obsession, They fear a Fed misstep might bring on recession. Markets too send signals the Fed’s often heeded When it sorts market “wants” from what’s really needed. The markets now hope Fed tight’ning’s come to an end But still-high inflation do high bond yields portend. So the war on inflation has not yet been won And the Fed dare not proclaim its job is now done. Policy mistakes are not the Fed’s turf alone. Big government too has for much to atone. Budget control’s been a myth for decades and counting As spending runs wild, red-ink and debt keeps mounting. DEI, ESG and too many things “woke” Have set many good firms on a path to go broke. Crime and corruption has dulled some big cities’ pull Leaving too many buildings more empty than full. “No more fossil-fuel cars” is something we’ve been told But dealers have thousands of EVs not being sold. Mandates like this rarely prove to be much of a fix, We’d be better off using just carrots and sticks. The craze over crypto has cooled or so it seems Instead AI’s the stuff of the tech sector’s dreams. It’s e’en caught the fancy of my overworked elves And they’re making more now than before by themselves. Then Santa turned angry, and his voice loudly raged Cursing the wars in which much of the world’s now engaged. “This is just madness with neither reason nor rhyme!” Still, he swore he’d not let it spoil this holiday time. And then he declared he’d said enough for one night, “’Tis time I resume my yearly Christmas eve flight!” In that instant he bid me farewell for this year: “May your days bring you plenty of hope, joy and cheer!” MY COMMENT It has been a very good time for retail this year.....at least that is my projection. Thanksgiving was early this year and with Christmas falling on a Monday...we have a good long week this week for final shopping. The malls seem to be packed here locally. I expect that the doom and gloom predictions for this holiday retail season will once again turn out to be totally WRONG.
With year end and the holidays.....NOTHING is going on today. I dont expect much this week or next with many professionals on vacation one or both weeks. This should make for a low volatility and mild market....although sometimes it can cause erratic results due to a shallow market. The Ten Year yield is still below 4%...amazingly.....after all the rate hikes we have had over the past year. It is currently at 3.954%. Personally being a long term investor I dont try to do any sort of tax loss selling at year end. The professionals with their short term focus....a mistake in my view.....will do so. They will also be doing some year end......"window dressing".......to placate clients. Just some unrelated random thoughts above.
In my one kids account.....today at the open....I added to their recent new positions of MSFT, AAPL, NVDA, HD, COST and GOOGL. I now have those six stock up to 20% of their entire portfolio. The rest of their money is in a SP500 ETF and Fidelity Contra Fund. I took the money for the additional stock shares from their SP500 ETF. So a lateral move. I debated waiting to do the trade till after the open today....but....decided last night to simply put the trades in......at the market.....at the open today. My typical market buy.....with NO market timing....even a single day. Four of the six new shares are in the green......NVDA, MSFT, COST and GOOGL. HD and AAPL are in the red. So......so far......for a holding period of just a few hours.....they have a nice little gain. Over all.......the six positions ALL have a good gain since I first put them in place.....I believe in July. Since JULY the six stocks......as a group....... are up by close to 10% in their account. I have no concern about buying at the current market top.....I see 2024 as having much upside and these are long term holdings. So i simply followed my usual course and the probabilities.....and....purchased all, in right now. I did not have any interest in trying to wait for a market entry point. I see that as a LOSERS GAME.....and believe that the research backs that up.
As to the above....at some point in the next six months.....I will add AMZN to the account above so it will match my typical MODEL PORTFOLIO.
OK....NVDA continues to quietly move toward $500 per share. It is at $494 right now. I believe this stock is undervalued and has been disrespected lately.....in spite of HUGE earnings that are likely to continue for some time. I am sure the earnings will somewhat even off....but at a very high level that supports a much higher price for the stock over the next year or two. Of course....this area of tech is the wild west....some new development, or issue with China, Taiwan etc, etc, etc.... or with AI or chips.......could turn this sector on a dime.....for the better or for the worse. I would consider this company as the WORLD WIDE MARKET LEADER......but....still an aggressive holding.
For those that need...a little reminder. 6 End-of-Year Retirement Deadlines You Shouldn't Miss for 2023 Navigate these tax and retirement milestones to optimize savings and avoid penalties. https://money.usnews.com/money/retirement/401ks/articles/year-end-retirement-planning-deadlines Some topics covered: Qualified account contribution deadlines. Mandatory withdrawal deadlines. Deadlines for conversion or recharacterization. Deadlines for catch-up contributions. Deadline for charitable contributions. Medicare and Social Security deadlines.
