Quantcast Any stock/fund investors here? - digitalFAQ Forum
  #1  
12-24-2018, 11:19 AM
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I've been saying the market would hit a harsh correction in Q1 2019 since last spring. It grew too fast, divorced from other economic numbers both flat and under 5% growth. This also exclude government chaos finally leeching into market chaos, which was also one of my factors for the Q1 target.

I'm not an economist, but I understand money and finance, and have had a retirement portfolio for 20 years now. I've held most of my annual investable funds in cash in 2018, waiting to time the market. And that time is close, maybe now. I've started to leak a few dollars into various assets, but am still holding back most.

1st question: When do you think it will bottom out, and by what ultimate %? (Or, to keep things easier than %, the DOW, S&P or NASDAQ index prices.) I'm curious if a true bear market is coming, more downturns, or if simply a correction that will pass soon. I want to know what others think.

- I think the DOW will at least hit the 19k range, and that the market will lose all 2017-2018 gains, putting us back to 2016 levels. It's currently down to mid 22s, down from 26k+ highs earlier this year.

- I think the S&P may come close to 2100, and it's already falling more rapidly than both NASDAQ and the DOW. I like Warren Buffet's advice on S&P index funds, and the ETFs are top of my radar (along with some select mutual funds from Janus, American Funds, and T Rowe Price, in which I'm already invested).

- Tech stocks still seem over inflated, especially the FAANGs, so the NASDAQ is still a mystery to me. Even 2016 levels seem a bit much, reminds me too much of the dot bomb era. Mostly meaning that I'm not sure how it will do, % wise, in matching DOW/S&P turmoil. Nor when it may be wise to invest in funds heavy in NASDAQ tech stocks.

- International stocks/funds are another conundrum. I'm especially not sure if I should touch China with a 10-foot pole.

2nd question: With stocks down, what are your favorite holdings, especially those that pay decent dividends? Any good deals that you're seeing? I've always liked the advice "only buy what you know" (referring to company/sector), and stick to that.

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  #2  
12-25-2018, 11:36 PM
Winsordawson Winsordawson is offline
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No one has a crystal ball. You can get 50 different opinions on Seeking Alpha, but what we do know is that, despite the recent tumbles in the market, we are not yet in recession territory. The Fed tends to agree, evident by their interest rate increases. Economic activity is still strong. Fidelity publishes a useful business cycle graph every quarter: https://institutional.fidelity.com/a...le-update.html

So if you are waiting for a recession to buy, now is not the time. On the other hand, it is hard to time the market, hence the philosophy of dollar-cost averaging, where you invest a certain amount at set intervals. This is what I do for my retirement account, but if I had to invest my personal money I would wait awhile.

As I value time more than money, I rarely invest in individual stocks. You can't just buy XYZ Corp. and not keep track of its fundamentals for years. The average Joe and Jane bought GM thinking it was a solid stock until it declared bankruptcy in the last recession. I have been invested largely in ETFs, mainly ones that either track an index or are based on market capitalization (small-cap, mid-cap, etc.). Tech ETFs, like QQQ, offer the most long-term gains (and a lot of volatility), but you need to have a sizable time horizon for them. Your time horizon will be the most important factor in deciding what you will invest in.

A lot of investors are critical of passive investment, but studies have shown that over decades only a very small percentage of actively managed funds outperform funds that track an index. Warren Buffet agrees, as he has directed the executors of his estate to invest most of his wealth in an S & P 500 index fund. Every person who buys a stock thinks he or she has made the right decision, but for every buy there is someone who wants to sell (in theory, excluding market makers). Already, we know 50% of these people made the wrong decision, which is why I usually stick to passive investing.

International stocks offer a lot of reward if you time it right, but you cannot just invest and leave them to simmer like a slow cooker.

To answer your questions:
1. I have no idea, but economic indicators are still strong.
2. I don't focus on dividends as much as on growth. if your time horizon is short, there are some solid stocks like AT&T, which will have a very good dividend yield as the market tanks. I try to avoid "chasing dividends".
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  #3  
12-26-2018, 09:39 PM
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Thanks for replying.

I went ahead and put in 20% of the funds before the rebound today. We're not talking huge sums here, just annual retirement funds. Long-term stuff, still some years to be aggressive.

No, I don't think recession either, just hard correction. At this early juncture, I'm not even sure if December is the correction, or just market noise.

Yes, dollar cost averaging is usually my method. And it still somewhat was this year, albeit to tiny amounts -- most of which lost value, even before December. I just did not like what I saw at the end of 2017 and into 2018. I put on the brakes, and am glad I did. It's been turmoil all year long.

As much as I hear "the market is strong", is it really? I'm not convinced.

Indeed, opinions are everywhere. I just wanted some from the local crowd. There are people here from many fields, not just video (filmmakers, actors, etc). It can good to get opinions.

"Chasing dividends" is a new phrase to me. I guess the main issue is that non-dividend stocks must be bought/sold to get growth value, and I leave that activity to the mutual funds. I just hold a few dividend-paying stocks mostly for the thrill of dabbling in the market. Real funds go into the ETFs or mutual funds.

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  #4  
12-28-2018, 12:02 AM
Winsordawson Winsordawson is offline
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Consumer spending, which makes up a significant portion of the economy, is still high. As long as this continues, we should be fine. The yield curve did inverse earlier this month, which means that a recession is in our future. However, this could still be a couple of years away, as it took two years for the 2007 recession to follow the yield curve inversion of 2005. I recall research indicating that a recession usually follows a bear market (a drop of at least 20%) by six months to a year. Of course, with the Big Baby in the WH (tariffs and trade wars), anything could happen.
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01-18-2019, 09:23 AM
Angies_Husband Angies_Husband is offline
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Originally Posted by Winsordawson View Post
The yield curve did inverse earlier this month, which means that a recession is in our future. However, this could still be a couple of years away, as it took two years for the 2007 recession to follow the yield curve inversion of 2005.
This.

...I have heard the professional consensus in the financial industry is to expect the "correction" in 2020.

But I very much agree with Winsordawson on his points, primarily: 1) What happened in December was not the real correction and there is still a (long) way to go. and 2) Investing all depends on what your time horizon is.

Personally, I think with the rise of all the computer driven trading and decision making, it is easy to imagine a world where machines are making buy/sell decisions simply based on historical models (and ignoring fundamentals). Maybe we are already there...

For fun, you can google "ARIMA model stock price forecasting" and after sifting through some of that, reflect back on what Winsordawson said "...for every buy there is someone who wants to sell..."

What happens when there is an imbalance in the quantity demanded for buying and selling? Price will (or should) change accordingly.

I would also tend to prefer collections (e.g., funds/indexs) over individual stocks, and to maintain a portfolio that is diversified and respects your required time horizon.
--

Ok, so this is an old thread (or so the box below tells me), but it is still young from an investing standpoint!

I am also laughing at the irony of finally getting around to creating an account (after much historical forum reading) and my FIRST post has nothing to do with VHS to digital capture/conversion advice...
The side note being, this forum is a fantastic resource for someone just starting on the "save the family archives" journey!
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02-01-2019, 06:23 PM
Winsordawson Winsordawson is offline
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Quote:
Originally Posted by Angies_Husband View Post

For fun, you can google "ARIMA model stock price forecasting" and after sifting through some of that, reflect back on what Winsordawson said "...for every buy there is someone who wants to sell..."
Thanks. Do you have a particular link for this?
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02-01-2019, 08:14 PM
Angies_Husband Angies_Husband is offline
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Originally Posted by Winsordawson View Post
Thanks. Do you have a particular link for this?
There is a nice site at Duke:
https://people.duke.edu/~rnau/411home.htm

I have only poked around there a bit, but lots of good reading material on statistical forecasting.

ARIMA is #5, if you scroll down on the page.
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  #8  
03-15-2020, 02:48 AM
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And we're back, just a little over a year later.

We woke up ol' Smokey/Yogi/Barney the bear.
We drove right over the correction, pedal to the floorboard headed to recessionville.

BTW, Dec 2018 was a correction, downed the market 10%+

I held onto those 2018 funds, and spent them on 2/12, as levels went back down to at/under the Dec 2018 dip. So here we are again, my 2019 funds in hand, and few 2020 dollars, ready to dollar cost average those on the way down and back up (since I have no idea where the bottom will be).

And I did a lot more reading in 2019, and stashing funds, in preparation for the eventual bear market.

Opinion: I think the virus only exacerbated the issue, it wasn't the root cause. It was just the heavy domino that got everything started.

- How low do you think it will go? (I still think 2014-2016 index levels, no lower).
- Time horizon for a rebuild/recovery?
- Other thoughts?

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  #9  
03-15-2020, 01:55 PM
latreche34 latreche34 is offline
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I bought into Tesla few months ago when it was at its lowest hearing that they will start mass producing cars in china for the whole world, In the last few weeks I quadrupled my money when it hit $960, and then all of sudden this corona $hit hits, I'm still doubling my money but I'm uncertain about the future, This is the kind of predictions that no one can make.

What scares me is the banks bailout that happened now from thin air funds, which we all know it rises the inflation and drives the dollar value to shit:
https://youtu.be/O5mMW6dZtfw
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03-15-2020, 05:27 PM
Winsordawson Winsordawson is offline
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The market has been overbought for awhile now. I got out late last year. It is hard to say what the bottom will be, and I can give you 30 different answers if you want. You are right that the virus was just the impetus for an overvalued market, but some believe that because we do not have the underlying problems that characterized the 2008 crisis the markets should recover after this virus is over. The White House indicated that the stimulus package being approved now would only be the 2nd inning of this affair, with more stimulus to come as needed.

The problem with deciding when to get back into the market is the big unknown of how long this virus will last. Some are saying it could be nine, ten months (according to the Governor of New York). It all depends on how well we can nip this in the bud via techniques such as social distancing. China appears to be recovering from the coronavirus, but as a quasi dictatorship they can easily force tens of millions to stay at home. We can't and/or don't care to. Just look at the guy who boarded a Jet Blue flight despite knowing he was positive for COVID-19.

I myself have dollar-cost my way into the market as it goes down, but some believe the market has some downside potential. As the market sells off, there are trigger points where computer algorithms will sell to cut losses, which can further the problem. I have also succeeded in shorting some industries via leverage inverse funds, but I would not recommend it for the faint of heart.

As regards to stocks, by the time you think about buying a stock because it went up, it is often too late. People have made a lot of money with Tesla, but its fundamentals do not warrant its price. People are buying it because of the hope they have in the company and in Elon Musk. I hope he succeeds, but personally I worry about his big mouth getting him in trouble, as it has in the past.

I invest mostly in various index funds because time is valuable and I do not want to waste it babysitting twenty stocks. Index funds can be based on an index like the Dow, S&P 500, or total market index; company size, like small-cap or mid-cap; or industrial sector, such as technology or consumer defensive. If you do invest, keep in mind the upcoming election. Healthcare companies are at a big risk should a Democrat win the presidency and sweep Congress. If Congress is divided it is less of an issue.
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03-15-2020, 08:12 PM
latreche34 latreche34 is offline
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Not when Biden wins, Health insurance companies are one of his big donors. Do you think he cares about the morons who voted for him? Anyway yes I'm a big believer in Tesla unless they fail to mass produce cars, The next big thing is the solid state battery that supposed to be cheaper and lasts longer (like 10,000 charging cycles) and triples the range on a single charge, If that comes to life the combustion engine could be in jeopardy.
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03-15-2020, 09:00 PM
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Quote:
Originally Posted by lordsmurf View Post
Opinion: I think the virus only exacerbated the issue, it wasn't the root cause. It was just the heavy domino that got everything started.
Agree. As Windsordawson also said, a cyclical market correction has been long over due. But this is worse than anyone could have imagined.

Uncharted territory really... From an economic standpoint, you've got massive supply chain disruption (e.g., China has been at a fraction of their production capacity since mid January), and then this flip side of massive disruption to consumer habits in attempts to slow the spread of the virus and not overwhelm our medical and emergency resources.

Just this afternoon, the Fed just spent all their dry powder. Poof. The problem is (in my mind) this isn't an issue that gets fixed with lower rates... It's way more fundamental than that! Global human behavior and consumer spending will be irrevocable changed for the next 3-6 months. And the markets won't have any quantitative data until 2Q Earnings come out around July/August...

Quote:
Originally Posted by lordsmurf View Post
- How low do you think it will go? (I still think 2014-2016 index levels, no lower).
- Time horizon for a rebuild/recovery?
- Other thoughts?
Last week my "Bear" case was S&P @ 1500 in 4Q2020; Rebound to previous all time high by 1H2033.
After today, this might now be my "baseline" case.

FWIW, I am also at "ground zero" in WA state. So experiencing/observing a lot of this first hand in the past week.

$0.02
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  #13  
03-15-2020, 09:22 PM
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Healthcare companies are at a big risk
Healthcare does need to be overhauled, including transparency in pricing, and sane medicines costs. If doing that tanks those companies, then tanked they shall be. I would rather lose money on healthcare sector investments, than be forced to continue paying the unreasonable sums being demanded. Because my investments are dwarfed by annual healthcare costs.

For example, MS drugs are all Tier 5, and cost $60k+ annually (and increase about 10% per year in the past decade!). My annual out-of-pocket responsibility is about $9k. There are programs that cover this, or can help, but it's never guaranteed. More than once, I've found myself rationing my medicines, stretching the doses (underdosing). This situation is not sustainable, not reasonable to normal folks. So again, if healthcare stocks fall, so be it. I'm fine with it.

However, even with an overhaul, healthcare will be fine. There is a ton of waste. For example, why do we need TV ads touting drugs on almost every cable channel almost 24/7? It's not like I can go do the doctor, and request a drug I saw on TV. (I'm sure I can, but the doctor will hopefully suggest the treatment that is best for me, not the one that advertised to me.)

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Originally Posted by latreche34 View Post
Tesla
Tesla? Nope. Not for me. I want to buy and hold for longterm investing.

I know some of my mutual funds hold the stock, but it's a risky holding. It's volatile (even in a strong bull market), extremely overpriced and overvalued. It always strikes me as an anachronism of the dot-bomb era. It's pets.com, but goes vroom-vroom instead of woof-woof.

I don't like Elon Musk at all. While many of his ideas are good, or at least aggressive towards a better and more scientific future, quite a few are also bass-ackwards to reality. He reminds me a rich entitled kid, a smug fratboy that need to be socked in the eye and mouth. He has a punchable face. With a volatile CEO at the helm, it will always remain a volatile company.

I have more faith in Hyundai, GM, Toyota, and others, when it comes to developing the EVs of the future. By the time EVs are ready for mass market saturation, and both combustion and hybrids are EOL'ing, Tesla will be a Saturn. Interesting, kitschy, but ultimately a minority player.

In the meantime, if you think you can make a quick buck from shorting it, go for it.

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Originally Posted by Winsordawson View Post
leverage inverse funds, but I would not recommend it for the faint of heart.
Which one? I've used a few SH (ProShares), but it requires more work/time than I have available.

Quote:
I invest mostly in various index funds because time is valuable and I do not want to waste it babysitting twenty stocks. Index funds can be based on an index like the Dow, S&P 500, or total market index; company size, like small-cap or mid-cap; or industrial sector, such as technology or consumer defensive.
Yep. SPY and VOO, for the Buffet-approved S&P indexes.

Looking at one historic portfolio over the past 15 years, I found that the midcaps outpaced largecaps. So I'm thinking that heavy midcap ETFs, with a small % of smallcaps, would be better than all large/bluechips.

I've never gotten much into bonds or fixed income. I have a few, but it's mostly equities for aggressive growth. I'm not quite ready for retention mode, especially not now.

Quote:
If you do invest, keep in mind the upcoming election.
Something that I'd never heard until recent years is the idea that something has already been "priced in". So in terms of the election, how do you feel about hearing that everything has already been "priced in", and that whoever wins the election will only potentially make some stocks/sectors go up. None of the candidates will be good for everything. (Healthcare funds are losing about half of the rest of the market right now, so a post-virus fall may be unrelated to Biden/Bernie, though some would surely blame politics.)

Quote:
Originally Posted by Angies_Husband View Post
Just this afternoon, the Fed just spent all their dry powder. Poof. The problem is (in my mind) this isn't an issue that gets fixed with lower rates... It's way more fundamental than that! Global human behavior and consumer spending will be irrevocable changed for the next 3-6 months. And the markets won't have any quantitative data until 2Q Earnings come out around July/August...
What gets me is that it's far too early. They're trying to stimulate the economy at the same time that they're trying to dissuade consumerism. So why not leave the rate alone? Cramer said last week that to solve this virus we may have to let a recession happen. I agree with that assessment. A root problem is we have a "businessman" without any business sense at the helm of the country. So when it all ends, we have nowhere else to go, no enticement for commerce. It will all have to be natural rebound/growth, which is so much slower. But again, the market seems divorced from the economy. The market may rebound, yet the economy is in recession.

It didn't help anyway. The futures already hit a circuit breaker.

Quote:
Originally Posted by Angies_Husband View Post
FWIW, I am also at "ground zero" in WA state.
Be safe.
Be prepared. I have enough supplies to hole up for 2 months if needed, leaving only for minimal post office drop-offs.

@Winsordawson
@latreche34
@Angies_Husband
Good conversation. Sometimes I can't just talk video.

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  #14  
03-17-2020, 08:54 PM
Winsordawson Winsordawson is offline
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I would have no problem with our country moving toward a public option, or medicare for all. Where I live in NYC (currently a ghost town due to the virus), everyone under around $23,000 has free or very low cost healthcare. It's a no brainer that keeping the population healthy will have positive effects on the economy, etc. but sadly we are one of the last industrialized nations to figure that out. Obamacare isn't perfect, but you would probably be in a far worse situation with regards to your drug costs if we at least did not have that.

Nevertheless, I agree with latreche34 that Biden will probably be quite digestible to the healthcare lobby. But if Congress is sweeped by the Democrats, there will be pressure on him for HC reform (hopefully).

A colleague of mine has said that Tesla is a "bloated pig". But just because a company is overvalued doesn't mean you can't make money with it. You just have to exit the building before everyone else does.

Mid-caps have taken a beating recently (before the crisis) which made them a good buy. Between 1994 and May 2019, mid-caps had an annualized return of about 1 and 2 percentage points better than small and large caps, respectively. That's because they have better balance sheets than small caps while retaining some of their upward growth potential that is not seen in large caps. IJH is a mid cap ETF. If I recall, IVV is recommended by some as a better S&P 500 index ETF than its competitor VOO, but I forget the details. Also look into QQQ, which is more volatile but has outperformed all of these indices in recent years.

Some believe that back in 2019, some sectors were priced in for a possible recession, such as the energy sector, so it is possible that prior to the virus some sectors were priced in for the election, but one would have to observe the P/E and PEG ratios of stocks to determine that. I think the markets will go up with the election of either Trump or centralist Biden, because the markets love certainty, and both of these politicians fit the bill. Bernie would have shaken things up much more, from the standpoints of the markets.

I have invested in DWT, which is 3 times inverse oil; SPXU, which is 3 times inverse of the S&P; and EPV, which I believe is a 1 time inverse of an index of European stocks. However, these stocks should not be held for long due to their lossy nature. For example, I got out of DWT because oil can only get so cheap (if you watch it you can see how it has hovered in the low $30s).

I am shorting these markets because most of the country has not seen the full effects of this virus besides the West Coast and the NYC area. The streets in Manhattan are practically empty during rush hour. His Orangeness was late to controlling this and practically laughed it off in the beginning. I don't have the expertise to comment on the decision to bailout the markets, but I do know that we are not in a financial position to be giving out bailouts to airlines that turn around and tell us to go to hell when we ask for a refund. We have a $23 trillion deficit, and the tax cuts we gave to the rich didn't help. On the plus side, this corporate socialism is why our stock market and economy is the strongest in the world. But there will come a time when our national debt drowns us.
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  #15  
03-17-2020, 10:22 PM
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IJH is a mid cap ETF. If I recall, IVV is recommended by some as a better S&P 500 index ETF than its competitor VOO, but I forget the details. Also look into QQQ, which is more volatile but has outperformed all of these indices in recent years.
These are either on my radar, or I have a few shares.

ETFINDEX
DIASPDR Dow Jones Industrial Average
QQQInvesco QQQ Trust (NASDAQ 100)
RFVInvesco S&P MidCap 400 Pure Value
RSP Invesco S&P 500 Equal Weight
IVEiShares S&P 500 Value
IWDiShares Russell 1000 Value
IWRiShares Russell MidCap
IWViShares Russell 3000 (LargeCap)
SPYSPDR S&P 500 Trust
VOOVanguard S&P 500
VONGVanguard Russell 1000 Growth Index
VONVVanguard Russell 1000 Value Index (LargeCap)
VTWOVanguard Russell 2000 Index (SmallCap)
  
ETF CAPS
JSMDJanus Henderson Small/Mid Cap Growth Alpha
IWPiShares Russell Mid-Cap Growth
IJHiShares Core S&P Mid-Cap
VOVanguard Mid-Cap
VOTVanguard Mid-Cap Growth
  
ETFDIVIDENDS
DVYiShares Select Dividend
NOBLProShares S&P 500 Dividend Aristocrats
SCHDSchwab U.S. Dividend Equity
SDYSPDR S&P Dividend
VIGVanguard Dividend Appreciation
  
ETFSECTOR
IYTiShares Transportation Average
PEJInvesco Dynamic Leisure and Entertainment
RYTInvesco S&P 500 Equal Weight Technology
XLEEnergy Select Sector SPDR Fund
KBESPDR S&P Bank
XHESPDR S&P Health Care Equipment
XLVHealth Care Select Sector SPDR
XTNiShares Exponential Technologies
  
ETFINTERNATIONAL
ACWViShares Edge MSCI Min Vol Global
BBCAJPMorgan BetaBuilders Canada (Financial)
EFAiShares MSCI EAFE
EWXSPDR S&P Emerging Markets SmallCap
GSJYGoldman Sachs ActiveBeta Japan Equity
  
ETFBOND
TLTiShares 20+ Year Treasury Bond

What about VO or VOT instead of IJH? I was leaning more towards those.
VOO is favorite index (less expenses than SPY), but DIA and QQQ for good measure

With ETFs, I'm heavily focusing on the holdings, and am less interested in ETFs that have the FAANGs and MS as major holdings. Excluding DIA, VOO, SPY, and QQQ. Also focusing on the expensive ratios, trying to stick to the 0.0s and 0.1s.

You've mentioned not wanting to chase dividends in the past, but I read something a while back (and agree with it): if companies do not have dividends (or capital gains), then you're not really investing, and are instead simply loaning money. I believe dividends are a must for sound investing.

For tax reasons, I want to rebalance my portfolio to have less mutual funds, more ETFs. And then after market rebounds, sell off various holdings, shrink it down to 4-5 mutual funds, 3 index ETFs, and maybe a half dozen other "winners" of the rebound. Only retain a few stocks where I have some emotional ties, and the stock still makes sense. I'm not so hot on international and sector funds/ETFs, may dump all of those.

I wish I'd have withdrawn my retirement funds into fixed back in Feb (Putnam), when it was just starting to fall, but wasn't thinking clearly. I would have a lot more money to play with now. It's clearly too late to do any of that now.

Again, good conversation.

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  #16  
03-18-2020, 12:32 PM
latreche34 latreche34 is offline
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Another crash today. I'm out, I don't want to loose. The corporate wallfare handouts don't seem to be working.
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03-21-2020, 03:24 PM
Winsordawson Winsordawson is offline
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Vanguard Mid Cap should be fine. Historically Vanguard funds have very low expense ratios. Value stocks tend to outperform over the very long term, but growth stocks do better during a good market, so I do not select only value or only growth ETFs. I don't think you need to have 50 ETFs in your portfolio, as there will be a lot of overlap. I am not a fan of emerging markets because of their volatility. In fact, I still do not trust many countries as good places to invest. I stick with VTI for international exposure, which is the total market index. Analysts seem to feel that the US markets will lead in total returns at least for the next few decades. For someone who's time horizon is 15 years, emerging markets may not bring the returns he or she is looking for. It might be different for someone who still has 40 years to invest.

Some companies do not offer dividends because they re invest all of that money back into the business. By doing so, they expect to entice shareholders with greater growth. Companies with no or little growth often have to attract investors with dividends, like AT&T. Berkshire Hathaway performed better than the overall market for many years because Buffet felt he could invest that money better than giving it to the shareholders. Historically, at least. Recently, Berkshire Hathaway has underperformed relative to the S&P. I no longer invest in the company because Buffet is already in his late '80s.
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