Stocks

[crispystl]

Does anyone who knows what they're doing have any good suggestions?


Thanks!!

[DJ's left nut]

Originally Posted by petegz28

Do some research and buy a good mutual fund. Don't try and pick individual stocks. Don't listen to people who say "I bought this at X and it's gone up and is now Y". Chances are the market went up as a whole ...a rising tide lifts all boats and what not

I tend to focus on mid-cap mutual funds and the emerging growth ones.

Sometimes they'll crater on you when they invest in some company that goes tits up, but it's been my experience that they tend to do better than the market by a point or two.

Unless you're going to be extremely diligent, I'd stick with mutual funds. Additionally, don't underestimate the utility of stop-losses. Put in a sell option with a trailing stop if you're in something volatile. I bought into a bunch of the 3D printer options several months ago, rode them up and then when they had that mini-bubble burst on them, my stop losses kicked in after they dropped 5% in a day and sold off before the next couple of days when they ended up dropping another 20+%

Stop losses can be annoying sometimes, but they can also save your ass on occasion.

Oh yeah, and buy Ford. I don't care if they make you any money, but they didn't take the bail out and make a damn good truck. (In other words, one homer pick may not be smart, but it won't sink you either. I like having a few thousand invested in my rooting interest...)

[DJ's left nut]

An example of the phenomenon above regarding 'rising tides' and the problem with mid-cap and growth funds.

One of my favorite funds is the T Rowe Price New Horizons fund (PRNHX). I like their prospectus, I like their goals; I just think it's a nice fund that's fairly aggressive for a mutual fund but not run by an idiot.

That said, if you look at what it's done since Jan. of 2012, it's beaten the S&P by tenths of a % (it's beaten the DOW by about 5%, so that's been good). The problem is that when things are going well on those funds, the mid-caps will rock and roll past those index funds. But when things drop, the index funds stay fairly stable where the mid-caps will fall hard. December of 2012 saw the S&P stay flat where the DOW and my fund both bled off 5-7%. Since then, my mid-cap has caught back up to the S&P, but another drop off will hit me in the shorts and it will be scrambling to catch up.

You So that's again where a good stop-loss can help you. Additionally, having a significant portion of your portfolio in those 'boring' index funds can be a nice hedge investment if you're looking at a 20-30 year timeline. There's nothing sexy about them and they'll constantly look like they're lagging behind your other investments, but they really are the tortoise in this race.

[Msmith]

If you have the money, buy APPLE. Yes, it does cost $400 but it pays $12 dividend.

[ReynardMuldrake]

Originally Posted by CrazyPhuD

WTH are you talking about? The science is actually really clear on this...NO one...not even 'great' investors actually succeed in 'beating' the market over the long term. The technical term eludes me right now but over the long term everyone returns to the mean. Some of this you'll never see because portfolio managers kill off their failures so the failed funds don't show up against other ones. Studies have shown this time and time again and it's why the big caveat always is states...past performance is no indication of future performance. Odds are good if someone has outperformed the market in the past they are going to underperform it in the future. Everyone returns to the mean. Seems surprising but that's what the studies have consistently shown.

The notion that trading individual stocks or trading often is a 'good' idea is a scam propagated by Wall Street. Remember they get paid when you make a trade regardless if you make money. The more trades you make, the more transaction fees you pay. Unless all your trades are free every trade is bleeding your returns.

The funny part is, even when people 'win' they are often losing, because many times the market gives better returns than they were able to. I'm with John Bogel here, the best strategy for consistent returns is a diversified investment that tracks the market. Pick the low load, low cost funds. Actively managed funds(either you or someone else) sounds like a good idea, but the reality is they don't tend to out perform the market over the long term AND they cost you more.

The worst it about many retail investors is that it's little better than gambling to them. You remember your 'successes' but you'll forget your failures, always chasing that 'high' of that big gamble you win with. Like I said this is what Wall Street loves to propagate because they don't care if you win. They make money the more trades you make(or in funds they make money regardless if your fund actually makes money).

That's a very broad brush you're using. You make it sound like no one has ever made money buying a stock, which is just silly.

[ReynardMuldrake]

Originally Posted by Msmith

If you have the money, buy APPLE. Yes, it does cost $400 but it pays $12 dividend.

Disagree. I think Apple has "lost its burst." My fiancee owns AAPL, and I've been telling her to sell after they make their next big announcement. They have not been the same company since Jobs' death.

[Chief_For_Life58]

penny stocks and Chesapeake energy

[chiefzilla1501]

Originally Posted by ReynardMuldrake

Disagree. I think Apple has "lost its burst." My fiancee owns AAPL, and I've been telling her to sell after they make their next big announcement. They have not been the same company since Jobs' death.

Absolutely agree. Especially given that the iPhone is losing some serious steam.

[chiefzilla1501]

Originally Posted by ReynardMuldrake

That's a very broad brush you're using. You make it sound like no one has ever made money buying a stock, which is just silly.

Agreed. I hear that argument a lot. The efficient market theory suggests that any price imperfections are already priced inti the stock. That's bs. People have different risk tolerances and some are short term vs long term.

Yeah, if you're trading frequent and short term based on price imperfections, you're gambling. I see nothing wrong with reading up on a business strategy and taking an educated guess on their growth prospects.

[Mr. Laz]

go with what you know(ie a specific company or class that you know about)

or

a general fund


research

[MTG#10]

I'd go with whatever a Nigerian financial adviser says, they're great with money. Just keep checking your email, one will likely contact you very soon.

[DaneMcCloud]

Originally Posted by MTG#10

I'd go with whatever a Nigerian financial adviser says, they're great with money. Just keep checking your email, one will likely contact you very soon.

The end result would likely be the same.

[KC native]

Originally Posted by ChiefRocka

Is there really a difference between an ETF and an individual stock in the long run? I mean doesn't the average gain/loss of any ETF boil down to a single percentage?

Yes, if you're buying an ETF you are either buying the market as a whole or buying a sector/country/industry.

ETFs take the individual selection of securities risk down. I like ETFs, they allow you to be approximately right.

[KC native]

Originally Posted by DJ's left nut

An example of the phenomenon above regarding 'rising tides' and the problem with mid-cap and growth funds.

One of my favorite funds is the T Rowe Price New Horizons fund (PRNHX). I like their prospectus, I like their goals; I just think it's a nice fund that's fairly aggressive for a mutual fund but not run by an idiot.

That said, if you look at what it's done since Jan. of 2012, it's beaten the S&P by tenths of a % (it's beaten the DOW by about 5%, so that's been good). The problem is that when things are going well on those funds, the mid-caps will rock and roll past those index funds. But when things drop, the index funds stay fairly stable where the mid-caps will fall hard. December of 2012 saw the S&P stay flat where the DOW and my fund both bled off 5-7%. Since then, my mid-cap has caught back up to the S&P, but another drop off will hit me in the shorts and it will be scrambling to catch up.

You So that's again where a good stop-loss can help you. Additionally, having a significant portion of your portfolio in those 'boring' index funds can be a nice hedge investment if you're looking at a 20-30 year timeline. There's nothing sexy about them and they'll constantly look like they're lagging behind your other investments, but they really are the tortoise in this race.

Mids and smalls are the easiest area to pick and analyze individual companies IMO. Their business models are still usually pretty simple and they usually haven't gotten into the financial engineering you see at large caps. They are much more cyclical though which is why you see that volatility. When things go well for them, they go really well. When things aren't going so well, they have limited ability to sidestep that.

Mid funds are a crucial part of a moderately aggressive to aggressive portfolio. If you are real risk averse then you should probably stay out of that space. Also, a lot of large cap funds dip into the mids to get growth potential and a lot of small cap funds reach up into mids because of their limited opportunity set. So make sure you pay attention to how your funds actually invest because you may end up way overweight Mid Caps unintentionally.

[KC native]

Originally Posted by chiefzilla1501

Agreed. I hear that argument a lot. The efficient market theory suggests that any price imperfections are already priced inti the stock. That's bs. People have different risk tolerances and some are short term vs long term.

Yeah, if you're trading frequent and short term based on price imperfections, you're gambling. I see nothing wrong with reading up on a business strategy and taking an educated guess on their growth prospects.

Yes, EMH is horse shit.

Also, I have problems with those out performance studies. Some funds are benchmark agnostic and intentionally have styles that are supposed to run counter to indices. Also, all investing styles are out of favor at times. That doesn't mean that you should increase/decrease their portion of your portfolio. Also, there is the issue of which market you are comparing them to.

[Mojo Rising]

Research Tesla - TSLA . It has a way to run.