• Breaking News

    Monday, February 5, 2018

    Home Unlabelled It's moronic Monday, your chance to ask any of those lingering questions without fear of harassment. Investing

    It's moronic Monday, your chance to ask any of those lingering questions without fear of harassment. Investing

    February 05, 2018

    It's moronic Monday, your chance to ask any of those lingering questions without fear of harassment. Investing

    It's moronic Monday, your chance to ask any of those lingering questions without fear of harassment.

    Posted: 05 Feb 2018 04:05 AM PST

    We encourage all our visitors to ask those investing related questions they were always too afraid to ask.

    The members of /r/investing are here to answer and educate!

    NOTE If your question is "I have $10,000, what do I do?" or anything similar. There is no single answer to this question, but we will also need A LOT MORE information if we are to give some sort of answer

    • How old are you?
    • Are you employed/making income? How much?
    • What are your objectives with this money? (buy a house? Retirement savings?)
    • What is your risk tolerance? (Do you mind risking it at blackjack or do you need to know its 100% safe?)
    • What are you current holdings? (Do you already have exposure to specific funds and sectors?)
    • Any other assets? House paid off? Cars? Expensive girlfriend? (not really an asset)
    • What is your time horizon? Do you need this money next month? Next 20yrs?
    • Any big debts?
    • Any other relevant financial information will be useful to give you a proper answer.

    Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions!

    submitted by /u/AutoModerator
    [link] [comments]

    Early Facebook and Google employees form coalition to fight what they built

    Posted: 04 Feb 2018 09:29 PM PST

    https://www.cnbc.com/2018/02/04/early-facebook-and-google-employees-form-coalition-to-fight-what-they-built.html

    SAN FRANCISCO — A group of Silicon Valley technologists who were early employees at Facebook and Google, alarmed over the ill effects of social networks and smartphones, are banding together to challenge the companies they helped build.

    The cohort is creating a union of concerned experts called the Center for Humane Technology. Along with the nonprofit media watchdog group Common Sense Media, it also plans an anti-tech addiction lobbying effort and an ad campaign at 55,000 public schools in the United States.

    submitted by /u/Eddie_Quesadilla
    [link] [comments]

    Apple Music on Track to Overtake Spotify in U.S. Subscribers

    Posted: 04 Feb 2018 01:25 PM PST

    Blue Apron shares rally after Walmart named 'logical buyer' of meal kit brand

    Posted: 04 Feb 2018 07:32 AM PST

    https://www.cnbc.com/2018/02/02/blue-apron-shares-rally-after-walmart-named-logical-buyer-of-meal-kit-brand.html

    $WMTV analyst spreading knowledge

    "Like its $310 million purchase of Bonobos, buying Blue Apron would repeat Walmart's playbook of acquiring a branded e-commerce startup with a more-premium product to its core offerings," Trusz wrote in a note to investors. "Further, Walmart could put Blue Apron's meal kits into its physical stores, which we believe would meaningfully enhance Blue Apron's profitability (more scale, less packaging)."

    submitted by /u/Eddie_Quesadilla
    [link] [comments]

    DOW futures down another 200 points tonight indicating a fall from 26k to 25k over the last week

    Posted: 04 Feb 2018 09:06 PM PST

    Link

    This is reminiscent of election night, so much uncertainty lately. This will be an interesting month as we see how long the market can keep on its positive month streak.

    submitted by /u/Timelapze
    [link] [comments]

    In-depth explanation of last week's Stock/Bond sell off aimed at Newbies [Cross-post from wsb]

    Posted: 04 Feb 2018 02:50 PM PST

    People at r/wsb liked my explanation and found it helpful, I figured I'd share the knowledge and whore up the karma over here. This is not a perfect explanation and I typed it all at like 2am last night so there may be minor errors.

     

    TL;DR:

    • The market is beholden to central banks due to years of QE

    • The Stock/Bond return correlation is important to watch

    • Diversification between stocks and bonds only works when this correlation is negative.

    • If bonds selloff too quickly, the return correlation can flip positive..

    • When this happens equities selloff along side bonds.

    • Friday's jobs report showed higher than expected signs of inflation.

    • If inflation spikes, the Fed will tighten monetary policy faster than previously expected.

    • In anticipation of such a move, the market fell.

     

    Now the entire "Goldilocks" environment that we have in the current economic climate hinges upon central banks (namely the US Federal Reserve) normalizing policy slowly and carefully. Why? [Because central banks have injected nearly $20 trillion dollars into global financial markets since 2009 and such a rising tide has lifted all boats. What happens when global QE is done and we start to see QT? We don't know because its never occurred on this scale before. Also worth mentioning is that the Fed will be the first to pull out later this year. (You can read more about that here:.

    But don't just take my word for it, here's an exerpt from a BofAML note:

    • "In 2017, multi-asset portfolios continued to benefit from equity/bond diversification. Low equity/bond correlation alongside record low cross-asset volatility is driving the vol of equity/bond risk parity portfolios to its lowest levels since the 1960s. Other multi-asset portfolios holding a mixture of equities and bonds have likely also seen extremely low volatility recently. However, a disorderly rise in yields that accompanies an equity market pullback (i.e., 2013 Taper Tantrum) could be a surprise for many investors who have become conditioned to the recent environment in which bonds and equities diversify one another.

    • CHART.

    • "The correlation of rate-sensitive assets to US rates is at record highs as investors fail to care about outside risks, leaving markets increasingly dependent on US policy. Coupled with rates vol near lifetime-lows - on few expectations for policy disruption - this has helped suppress global cross-asset vol. However, with the Fed appearing to soldier-on towards policy normalization, persistently low rates vol may be at risk. This in turn creates risks for a market slaved to rates."

    The Fed began tightening 2 years ago but very slowly. As long as inflation remains subdued then they can't yank away the punch bowl too quickly. But,on Friday morning we had a jobs report that had very positive average hourly earnings gains leading to worries about a marked uptick in wage pressures. Wage pressures are one of the key areas that we have not seen inflation in years. If inflation spikes unexpectedly and the Fed is caught with its pants down behind the curve, they will be forced to tighten monetary policy at a faster pace. This is a negative for risk assets.

     

    The other piece of the puzzle is the bond market.

    Stocks and bonds tend to move inversely to one another as the former is riskier than the later. If you're a diversified investor with both stocks and bonds, you're doing that because if one market suffers the other ought to soften the blow to your portfolio. In a general sense think of bonds as safe investments and stocks as risky. There is a lot more to it but thats the general idea. When investors are bullish on the future and "risk-on" is alive, you would expect to see flows out of bonds and into stocks. (Like we did immediately post-2016 election).

    So starting with this chart from goldman, (which is almost a year old but serves to illustrate my point), you can see how stocks and bonds tend to behave relative to one another over time.

    • The top left quadrant shows how a diversified 60% equities/40% bonds portfolio has performed over the long term. This is showing us in the dark blue spikes above the 0-line that such a portfolio has performed very well, better than the long term average (which is the horizontal light blue line).

    • Next look at the bottom right quadrant, which shows us the equity/bond return correlation shaded in dark blue. Now as you can see, aside from a few short instances, the correlation between equity and bond returns has been negative since 2000. This means that since 2000 bonds have almost always rallied when equities have sold off..Thus, diversified investors have been sheltered from losses as their bond holdings were intended to do.

     

    However when that return correlation flips positive, as it has many times in history, the two asset classes may sell off together and such a diversified portfolio may not help staunch the bleeding.

    Now as bond prices and yields more inversely, most people will reference the US 10-yr Treasury bond yield as a benchmark or a thermometer of sorts. Rising bond yields can be a good thing, as it means investors are selling bonds and (hopefully) moving into equities or riskier investments. BUT, there a point at which a bond market selloff moves too quickly, yields spike faster than expected, and investors interpret that as a panic signal.

     

    So last week we saw bonds sell off dramatically, causing yields to spike above the comfort levels of many investors. This combined with the jobs report:

    • WSJ: "The Labor Department reported Friday that average hourly earnings for private-sector workers rose 2.9% in January from a year earlier, their largest year-over-year increase since June 2009, when the last recession ended."

    • And heres the jobs report itself.

    (and likely the political theater of today) spooked the market.

    Will it continue? Your guess is as good as mine but I think that "BTFD" will be muted next week due to the fervor of last week's volatility spike inverting the VIX curve.

    submitted by /u/Bulletproof_Haas
    [link] [comments]

    I modified my S&P 500 400d SMA timing strategy analysis to include capital gains taxes. Still better than buy-and-hold.

    Posted: 04 Feb 2018 09:41 AM PST

    About a year ago in this thread I posted a picture of my analysis on the S&P 500 daily chart. I included the results of a simple 400 day SMA timing strategy (sell when price falls below SMA, buy when price rises above SMA). Of course, somebody asked if I included tax losses due to long- and short-term capital gains taxes. I didn't back then. But, yesterday I decided to fix my analysis.

    I subtracted off the capital gains tax that would be due to the government from the balance of the SMA timing strategy on the first trading day of each calendar year that was included in the analysis. Obviously the taxes would depend on the individual's income tax bracket. I used 15% for long-term capital gains and 28% for short-term. The results over the past 66 1/2 years are that average annual returns (the mean of the total returns calculated each January 1st) are 8.41% and 10.82% for the buy-and-hold and timing strategies, respectively. The standard deviations of the returns are 16.36% and 12.20%, respectively. Calculated another way, the annual return over the entire 66 1/2 year period (calculated as (end value / initial value)1/66.49) was 7.47% and 10.52%, respectively. The analysis did not include transaction fees (which is insignificant for large initial investments).

    From this analysis, I think it is fairly obvious that a simple timing strategy can provide greater returns over the buy-and-hold strategy. Although, perhaps everybody here already knows this...

    Here is the new picture.

    P.S. this is 400d (i.e. 400 trading days) SMA.

    P.P.S. just to put this into perspective, after the entire 66 1/2 years the timing strategy balance is 7.4x larger than the buy-and-hold balance for equal initial investments.

    submitted by /u/Anon241469
    [link] [comments]

    Will Amazon be broken up?

    Posted: 04 Feb 2018 07:32 AM PST

    Hello, i only a couple years into learning about investing and i am sort of trying to figure out what exactly causes a company to be broken up. Ive been reading up in a few places like investopedia on the subject. I understand there are two general types: Via anti-trust action or Via spinoffs. For various reasons, some obvious some not, Amazon is incredibly unlikely to split via spinoffs.

    It also appears that in many cases new legislation is made or even required to enforce anti-trust rules or make new ones.

    The FTC focuses on segments of the economy where consumer spending is high, such as healthcare, pharmaceuticals, professional services, food, energy, computer technology and Internet services...

    Amazon is in almost all of these sectors, it also disrupts sectors it gets into as we have all seen with the aquisition of whole foods. KR recieved a 33% drop just on news of the aquisition. Amazon leads in Voice Assistance, Cloud Services, Ecommerce, and studios. And is a big player in Entertainment and video. Theres already rumors of another aquisition soon. Their entire strategy is undercutting competitors even if it makes them a loss on a particular item or service.

    And lets not forget what we did to Microsoft when it started killing small companies off

    It seems like the valuation of Amazon is based on this thinking that it will eventually be in every market, every sector, pervasive throughout the world. This seems unacceptable for a captialistic economy.

    www.investopedia.com/terms/a/antitrust.asp

    I guess my question comes down to where is the line drawn, and amazon is broken up? Or any company for that matter.

    Further, Why has Amazon been allowed to dominate in such a way? Will it take legislation to break them up? Will the US or European governments take action?

    Disclaimer: I hold no stock in AMZN im just observing, trying to figure out how these systems work. Or if they work.

    submitted by /u/Pokehunter217
    [link] [comments]

    Wealthfront ending free management for new accounts (x-post /r/personalfinance)

    Posted: 04 Feb 2018 02:50 PM PST

    Just got this email from Wealthfront CEO Andy Rachleff:

    It's been an exciting start to the new year at Wealthfront, as we now have over $10 billion under management. We couldn't have done it without you. Thank you very much for making this possible!

    We've come a long way in the past six years from just offering a simple diversified and rebalanced portfolio of low cost index funds. Thanks to your support, we have added comprehensive financial planning, a broad suite of value added PassivePlus investment features and the ability to borrow at among the lowest rates in the business. In recognition of this tremendous increase in value, we have decided to no longer manage $10,000 for free for new clients starting April 1st.

    However, this will have no effect on your account. You'll still maintain your original sign-on benefit. It's our way of thanking you for helping us build our business. We'll also continue to offer everyone the ability to get an additional $5,000 managed free for every referral who funds a new account.

    We're looking forward to delivering you even more features and services this year. And thanks to our new $75 million financing round, we'll be able to enhance our service at an even faster rate.

    So here's to you and a great rest of 2018!

    Best,
    Andy

    submitted by /u/miraj31415
    [link] [comments]

    where do you put your money in this type of market?

    Posted: 04 Feb 2018 12:26 PM PST

    so, if bonds and other high yield assets are going to continue to get bludgeoned due to rising interest rates and stocks are going to continue to take a hit due to rising interest rates, where do you put your money? Usually bonds are where you turn during a downturn, but here everything is down.

    submitted by /u/j2324
    [link] [comments]

    What about investing frustrates you the most?

    Posted: 05 Feb 2018 12:47 AM PST

    I have my own opinions, but I want to understand how others feel about it, even in such a long bull market.

    Some examples. Is it...

    • Losing out on big gains (e.g. not buying Amazon)

    • Difficulty understanding all the financial instruments (Roth, 401K, taxes, etc)

    • Difficulty identifying winners vs. losers in stock market

    • Not being able to time the market

    • Difficulty understanding fundamentals and metrics (e.g. what does a P/E of 20 really mean?)

    For me personally, I find it difficult to have true confidence in my investments. This comes from a lack of industry insider knowledge about market strategy, as well as benchmarking their financial numbers against other players in the same space.

    submitted by /u/derangedhippie
    [link] [comments]

    what are the best books to get started and understand the reality of investing?

    Posted: 04 Feb 2018 08:56 AM PST

    Daily advice thread. All questions about your personal situation should be asked here

    Posted: 05 Feb 2018 04:05 AM PST

    If your question is "I have $10,000, what do I do?" or anything similar. There is no single answer to this question, but we will also need A LOT MORE information if we are to give some sort of answer

    • How old are you?
    • Are you employed/making income? How much?
    • What are your objectives with this money? (buy a house? Retirement savings?)
    • What is your risk tolerance? (Do you mind risking it at blackjack or do you need to know its 100% safe?)
    • What are you current holdings? (Do you already have exposure to specific funds and sectors?)
    • Any other assets? House paid off? Cars? Expensive girlfriend? (not really an asset)
    • What is your time horizon? Do you need this money next month? Next 20yrs?
    • Any big debts?
    • Any other relevant financial information will be useful to give you a proper answer.

    Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions!

    submitted by /u/AutoModerator
    [link] [comments]

    How to retroactively compare spending money on university vs investing in index funds?

    Posted: 05 Feb 2018 02:50 AM PST

    I went to university for 4 years from 2003-2007. During that time, I spent about $100k on school. I want to simulate how much money I would have today if instead I had dollar cost averaged $25k per year into index funds (lets say S&P500) over that same period.

    How would I go about doing this? Is there an online calculator or software that is good for running past scenarios like this? An approximate estimate is OK.

    Thanks!

    submitted by /u/FoxConor
    [link] [comments]

    Does anybody have a summary for learning bond math?

    Posted: 04 Feb 2018 11:58 AM PST

    I'm having a hard time finding a proper summary of math for bonds, for example calculating the duration, yield, yield to maturity etc. Does anybody have one I can use to study?

    Thanks

    submitted by /u/HeisenburgFap
    [link] [comments]

    Why keep a 6 month emergency fund if money can be withdrawn penalty-free from an individual investment account?

    Posted: 04 Feb 2018 09:35 AM PST

    I often read that I should keep a 6-12 month emergency fund in cash.

    So I've basically done that: I keep 10K in a savings account, maxed my 401K and IRA and the rest is in an individual investment account in Fidelity. My question is, why not put most of that 10K into the individual investment account as well?

    submitted by /u/mhluska
    [link] [comments]

    China to Probe U.S. Sorghum Subsidies, Commerce Ministry says it has evidence of American subsidies

    Posted: 04 Feb 2018 08:30 AM PST

    https://www.bloomberg.com/news/articles/2018-02-04/china-to-probe-u-s-sorghum-subsidies-adding-to-trade-tensions

    "The surging amount of imports from the U.S. since 2013 has dragged down market prices, damaging China's grain sorghum sector," Wang Hejun, chief of the ministry's trade remedy and investigation bureau, said in a separate statement Sunday on the agency's website.

    The latest spat comes days after U.S. President Donald Trump slapped tariffs on imported solar panels and washing machines, which Beijing called a "misuse" of trade measures. Trump also is considering whether to impose tariffs on imported steel and aluminum, while the U.S. Trade Representative's office is probing China's intellectual-property practices.

    Here's the fun part, the US heavily subsidizes the agriculture industry (such as crop insurance and low cost access to water in the southwest), so technically all of the US agricultural exports is subsidized to some degree.

    submitted by /u/COMPUTER1313
    [link] [comments]

    If the major markets experienced a 20% correction over the next 3 months, where exactly would you be investing during & immediately after?

    Posted: 04 Feb 2018 12:06 PM PST

    "20%" and "3 months" just to put some numbers on a hypothetical scenario. I don't want to get into a discussion about timing the market, or predicting when (in the real world) this correction will come.

    Let's say you are in your 30s, middle or upper-middle class and live in a Western country.

    submitted by /u/elongated_smiley
    [link] [comments]

    Why are the markets open right now?

    Posted: 05 Feb 2018 12:15 AM PST

    It is around 4 am USA time but market is supposed to open at 9 am and premarket at 8 am. So how are premarkets open right now?

    submitted by /u/KarmaKingKong
    [link] [comments]

    What are your favorite websites to gather stats on stocks?

    Posted: 04 Feb 2018 06:56 AM PST

    edit: thanks so much everyone for introducing me to Finviz.

    submitted by /u/explore__
    [link] [comments]

    What are some suggestions for deal flow sources for small businesses to invest in directly. Not startups. Probably in the ebidta range of 50k to 1m (maybe a bit higher). Can be small IB firms, deal flow sites, etc. Thanks!

    Posted: 04 Feb 2018 07:56 PM PST

    Potential market outlook for the next 20 years?

    Posted: 04 Feb 2018 07:55 PM PST

    Hey guys,

    I'm only 20 years old right now, but I'm set to graduate within the next 2 years with no debt, and right now I'm just beginning to figure out a financial plan for the future. I obviously want to invest in the market once I have a secure full time job, but I had a quick thought that I wanted some insight into. The market has always increased over the long run, with corrections and recessions every now and then, but the growth is always there.

    With the market cap of the entire market being so large currently, do you guys thing this trend will in general, continue 20 years into the future?

    submitted by /u/Kennynneken
    [link] [comments]

    401k limit question

    Posted: 04 Feb 2018 07:34 PM PST

    I want to hit the max limit to contribute for my 401k plan. I get a 6% company match. I'm under 50 so max is 18,500. How does company match factor into my annual contribution limit?

    submitted by /u/anishpatel131
    [link] [comments]

    When a company makes a rights issue

    Posted: 04 Feb 2018 11:26 AM PST

    When a company needs to raise money it makes a rights issue.

    I understand most of it, but one thing I do not understand is..

    What happens to the share price of the company during this time?

    Does it go up or down?

    My guess is down as there is more supply of shares?

    submitted by /u/charmander_bro
    [link] [comments]
    Read more
    at

    No comments:

    Post a Comment