Bubble time wrote:
S and P 500 down another 1% today, more than 5% off recent highs, and the main action wasn't/isn't supposed to start happening until March when the Fed starts their pullback. Could be hot air, but it could just be the beginning too.
If you expect the market to be lower two months from now, wouldn't you sell now? Exactly...
stay the course wrote:
As long as you’re in total market index funds, some in growth, some in international, and bit of bond fund, you should be fine. As long as you’re not mainly in individual stocks unless you have absolute conviction that you’re willing to lose it all.
The avoidance of individual stocks is generally good advice, but can be way overblown, such as statements to not do it unless "you're willing to lose it all".
Index funds are easier, don't require much attention, and likely beat returns of individual stocks picks. However, it's not like owning a lot of major, established companies like Apple, Amazon, WalMart, Verizon, etc. is going to do much different than index funds. 10 stocks make up nearly a third of VOO's holding, Vanguard's S&P 500 Index ETF.
Actually accurate advice is that individual stock picking is more work for likely no payoff, and high concentration in individual stocks is risky.
Wowzers wrote:
stay the course wrote:
As long as you’re in total market index funds, some in growth, some in international, and bit of bond fund, you should be fine. As long as you’re not mainly in individual stocks unless you have absolute conviction that you’re willing to lose it all.
The avoidance of individual stocks is generally good advice, but can be way overblown, such as statements to not do it unless "you're willing to lose it all".
Index funds are easier, don't require much attention, and likely beat returns of individual stocks picks. However, it's not like owning a lot of major, established companies like Apple, Amazon, WalMart, Verizon, etc. is going to do much different than index funds. 10 stocks make up nearly a third of VOO's holding, Vanguard's S&P 500 Index ETF.
Actually accurate advice is that individual stock picking is more work for likely no payoff, and high concentration in individual stocks is risky.
I agree. Owning individual stocks unless willing to lose it all is too strong of a statement.
I can’t deny that I’ve gotten lucky from some of my individual stocks to get to my current net worth. However, from buying /selling and paying taxes, it definitely put a damper in my overall growth. Also, I think it’s fine to invest in individual stocks to initially grow wealth when your amount is much smaller. But once your portfolio gets big enough, it’s good to be holding indexes.
However, the big issue of holding individual stocks long term is that there’s more likelihood of selling when it tanks imo. With index, I would be confident in going back up in the long run. With individual stocks, depending on what it is, I may not be as confident that it’ll go back up. Especially, if it’s lagging index, I’d be more likely to bail.
The sell off these last few weeks amounts to a mini taper tantrum as the 10-year yield is steepening and rates are expected to increase this year. We knew rates would go up this year. It has little bearing on expectations for company earnings and performance. There also wasn’t a correction last year so you could argue we’re due for one (NASDAQ is in correction territory right now). This is a great time to buy more stocks. There is unlikely to be a crash or recession, quite the opposite. 11 million open jobs, new business applications at all time highs, housing starts up. Inflation is peaking because most of it is tied to COVID related supply chain issues. This could be a great year for the economy.
Pardon my investing ignorance, flagpole, but I am a newbie: how do you invest a minimum 15% in retirement accounts? I put more than my company will match in my 401(k), and I make the maximum IRA contribution ($6000 in 2022) each year. What is the 15% you are talking about?
runner with eTrade acct wrote:
Pardon my investing ignorance, flagpole, but I am a newbie: how do you invest a minimum 15% in retirement accounts? I put more than my company will match in my 401(k), and I make the maximum IRA contribution ($6000 in 2022) each year. What is the 15% you are talking about?
The minimum amount of money you should put into your retirement accounts (could be 401k or IRA or combination of both) is 15% of your salary. As an easy thing, if your salary is $100,000 per year, you should be investing $15,000 per year minimum into retirement accounts. I'm ok with it if some of that comes from a company match. If you make a TON of money so that you hit 401k AND IRA limits each year, do remember that if you have a spouse who works, that person can also have a 401k and a separate IRA, and if THAT's not enough, then you can and should open a non-retirement mutual fund and put money in there. My brother has a nutso salary of just over $1 million a year, so he invests in non-retirement mutual funds.
For 2022, if you are under 50, you can put $20,500 into a 401k. If you are 50 or older, you can add another $6,500 per year.
For 2022, $6,000 is the IRA limit if under 50 (as you noted). If over 50, you get to add another $1,000.
runner with eTrade acct,
By the way, many experts use 18% as the amount to invest.
Pulling out early never works. Trust me,
They’ve been calling crash since the Covid crash & bounce back.
Sadly, the common folk have no such options because of the lack of a robust safety net, we are forced to try to build up for our retirement and medical bills that come at the end of the life cycle through gambling in the rigged stock market. Imagine that. Leaving the well being of millions to the whims of a market that goes up or down based on mere speculation and d faith actors.
S&P 500 down another 1% today, roughly 7% down from recent highs. Seems as if I started this thread at the exact time other people started thinking the same things...
mr38 wrote:
Flagpole wrote:
If the market tanks a lot, then that's a BIG buying opportunity. Buy as much as you can. And NO, this is not timing the market, because you are not selling, and you are doing your regular purchases despite how the market is doing...just putting in EXTRA if it goes down a lot. MUTUAL FUNDS only, not individual stocks.
This advice never made sense to me. If you had been consistently investing in the market before the crash, then where does the money come from to "buy as much as you can" after the crash? You (1) would have had a bunch of cash sitting around if the crash hadn't come, or (2) you would have to curb consumption after the crash in order to buy mutual funds, or (3) you would have to borrow money in order to buy after the crash.
Option (1) is exactly the misallocation of capital you advocated against earlier. Somehow I doubt you're advocating for option (3), although it could technically be sound advice. Option (2) is the most reasonable but if you have a bunch of frivolous spending, better financial advice would be to cut it out in favor of investment regardless of the market's recent performance.
Option (1) is not exactly as you describe it. It's personal finance 101 to have at least 3 months worth of spending in cash or equally safe and liquid assets. Say you have half a year safety deposit and your income is very stable, you can evaluate the risks and use most of that cash to buy the dip rebuilding your pile of cash later.
Bubble time wrote:
S&P 500 down another 1% today, roughly 7% down from recent highs. Seems as if I started this thread at the exact time other people started thinking the same things...
Excellent. Wake me up when SPY is down 10% (correction minimum) so I can buy more. On sale, baby!
n9 wrote:
Option (1) is not exactly as you describe it. It's personal finance 101 to have at least 3 months worth of spending in cash or equally safe and liquid assets. Say you have half a year safety deposit and your income is very stable, you can evaluate the risks and use most of that cash to buy the dip rebuilding your pile of cash later.
What you're proposing would obviously violate the "emergency fund" principle. It amounts to saying "you should keep an emergency fund of 3 months, unless you're trying to time the market."
All-in SQQQ
I think it depends when you start saving for retirement. Start at 21, and it's very different to 41!
The best rule of tumb I've seen is half your age when you start, as a %, for the rest of your career. The later you start, the higher than % needs to be. It's not going to be perfect, but it's a start.
As I have gotten older I care less and less about these sorts of events. Hell, I am fine with a 30 or 40% drop. I will just buy a bit more than usual on the way down with the cash I have accumulated over the last few years slowly. It is all cyclical and I can pretty much promise you we will see all time highs again within, at most, the next few years. If we don't we are a very different country with very different issues over the next few decades.
I am 100% invested in stocks, under 40, have close to 8 figures invested and JUST SIMPLY DON'T CARE. I would advise the rest of you to take the same approach.
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I don't see the point in raising a panic. This is the first time I've heard of major investors selling off stocks. This is nonsense. If the stock market goes down, it's an opportunity to buy stocks at undervalued prices and win on the difference when you sell. If you have money to invest, you need to find the right platform. You can find the best platforms to help you buy stocks here, Robinhood alternative. Invest as much money as you think you need, read each stock's analytics, and everything will work out.