Buy-and-hold-forever investing Investing |
- Buy-and-hold-forever investing
- Trump Expected to Announce Stiff Steel, Aluminum Tariffs
- What are the REAL reasons why Millennials aren't investing??
- EU says it will impose trade 'countermeasures' against US goods in retaliation to Donald Trump’s new tariffs
- Wells Fargo Tumbles After DOJ Orders Investigation Into Wealth Management Division
- Which 5 would you pick if you were given 100k and had to decide today. How would you split it and why?
- [Discussion] Benjamin Graham's The Intelligent Investor Discussion Group: Chapter 1
- Dividend yield vs. Interest rates
- Daily advice thread. All questions about your personal situation should be asked here
- Question on the IMF
- We should be talking about the effect of an unstable administration on the stock market.
- Premium Dividends
- LGI Homes priced on PE of 13 despite growing at 50% per annum for 5 years
- Toll Brothers trades on 20% discount to other builders despite outstanding performance
- What's the catch with Robinhood?
- Picking pennies in front of a slow moving steam roller
- What is happening with $FB?
- Mining commodities -supply and price charts/forecasts
- Delay in the release of earnings
- Spotify going public... how do I buy?
- Portfolio diversification idea
- How does a -ve cash flow company like Tesla, still alive?
- Canadian Top Five Banks
| Buy-and-hold-forever investing Posted: 01 Mar 2018 08:03 PM PST
--Fred Schwed, Where Are The Customers' Yachts? I was reminded of Schwed's quote when I read a blog post about a woman who bought 20 (or 40) shares of $BA Boeing stock back in 1965 for $250. She then did nothing with those shares, certainly not selling them, and just let the dividends reinvest every quarter. 53 years later, she has 400 shares 1, and her $250 investment is worth $134,800. The dividends alone on those 400 shares pay $2700 a year, or more than ten times her initial investment of $250. You also have Ronald Read, the Vermont janitor who bought stock in over 90 companies, and died with a portfolio worth $8 million. Read carefully researched the companies he bought, and if he didn't like how they were performing after his purchase, he'd stop buying that stock, but never sell it. Some companies (Lehman Brothers) went bankrupt, but some (like $PCG Pacific Gas & Electric) continued to split and grow in value even though he never invested past his original purchase, and used dividends to buy other stocks. Read bought for the long haul, and literally never sold his holdings. I think most of the traditional buy-and-hold investing approach advises to buy and hold for a 20-30 year long-term period, for the logical reason that most people are investing to provide a financially secure retirement, and most people work between 20-40 years before they retire. The buy-and-hold forever approach isn't looking at holding for a 30 year period to sell to fund for retirement, but to buy and hold for the rest of your life, using the price growth of the stock and dividends to help supplement your retirement income. Holding it forever makes your stock purchases a legacy of wealth you can pass on to future generations, though, so it not only provides you with an income source through retirement, but also secures the financial future of your family after you're gone (assuming they continue to hold onto the stocks and don't get greedy and sell them and blow the money, always a big risk). I've been reading recently about the struggle of the middle to lower class to get ahead and acquire wealth in today's economic climate. If you take the buy-and-hold-forever approach, you not only begin the process of acquiring wealth for yourself, but give yourself the opportunity to transfer that wealth upon your death, giving your kids and grandkids a big financial leg up. If you believe that investing is the process of buying stock in companies that you love and would be proud to own, a timeline of forever on your stock purchases is actually the logical approach. If it is a company you love to own, there is no reason to ever sell it. 1 Boeing stock has split 8 times since 1965, so a purchase of 20 shares would have become 1215 shares worth $424,873.35 as of today, and yielding $8327.52 in dividend payments. [link] [comments]  |
| Trump Expected to Announce Stiff Steel, Aluminum Tariffs Posted: 01 Mar 2018 06:56 AM PST
RIP the steel industry in Canada, Germany, Japan and UK. And along with the US automotive and construction industry as they'll have to use more expensive metals. [link] [comments]  |
| What are the REAL reasons why Millennials aren't investing?? Posted: 01 Mar 2018 06:18 PM PST CNBC ("Why Millennials Aren't Investing") has their opinion, but I think there's more to it than that. Thoughts? Also, if you don't have an investment account, why's that? [link] [comments]  |
| Posted: 01 Mar 2018 12:26 PM PST |
| Wells Fargo Tumbles After DOJ Orders Investigation Into Wealth Management Division Posted: 01 Mar 2018 01:19 PM PST |
| Posted: 01 Mar 2018 09:52 PM PST |
| [Discussion] Benjamin Graham's The Intelligent Investor Discussion Group: Chapter 1 Posted: 01 Mar 2018 08:24 AM PST I made a post a couple of weeks ago sort of complaining about the lack of investing based discussion in this subreddit. So I'll open the floor to see the discussion I want to see. -I'm still new to this investing world. I'm going through Graham's book again with colored pencils (no fucking really literal colored pencils and I bought them on sale too so I feel like that coincidentally reinforces being cheap the way Graham would want) and making sure I understand what he's trying to say and in his own words. -There's people much smarter than me in this sub when it comes to investing. Listen to them. I'm just starting the talk here. That's all I'm aiming to do. This isn't normative. Graham, though an influential voice in investing, is one voice among many. But studying Graham is a great place to start. He's a dense but worthy read. Nobody reads this book and leaves stupider because of it, paraphrasing Warren Buffett. So we start: Chapter 1: Investment vs. Speculation: Results to be Expected by The Intelligent Investor -(p.18) "An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative." He's strict with his requirement. He doesn't want to lose any money that he doesn't absolutely have to lose. At the onset he defines investing as inherently informed as someone can be. Anything less than the educated commitment to your money is speculation. On page 19 he addresses this odd phrase, paradoxical in its structure, "reckless investor". There's no such thing as a reckless investor. An investor is not reckless. If someone is reckless with their money then they're speculators. Now we also have to keep in mind that Graham himself sat through the Great Depression and the myriad of rises and falls the market embarked on. Historical context does inform his viewpoints and why he stands strict on his idea of what it means to be an investor over what it means to be a speculator. -(p.19) "...in the easy language of Wall Street, everyone who buys or sells a security has become an investor, regardless of what he buys, or for what purpose, or at what price, or whether for cash or on margin." Yeah no he calls bullshit on that. -(p.20) "In most periods the investor must recognize the existence of a speculative factor in his common-stock holdings. It is his task to keep this component within minor limits, and to be prepared financially and psychologically for adverse results that may be of short or long duration." He recognizes that there's always the uncertainty factor. You can do all the quantitative analysis you can and still be wrong. The capriciousness inherent in the market and all its forces therein makes investing, no matter how well informed and reasserted with analysis, always have a speculative factor. But it's your job as an "intelligent investor" to minimize that as much as possible. Why would you want your money to not guarantee you, as far as a guarantee can be given, a return on its invested purpose? -(p.21) "Outright speculation is neither illegal....nor (for most people) fattening to the pocketbook." By and large, people can't afford to be dumb with their money. Hell I'm writing this and I work a part-time job and I know he's right. I can't afford to lose money in the stock market. So if you put your money somewhere then you better know what you're doing and you better know it like the back of your hand. -On page 22 he addresses the reality of people and their speculative habits. Sometimes it's fun to speculate when you know you can be ahead. And so he goes: "If you want to try your luck at it, put aside a portion-the smaller the better-of your capital in a separate fund for this purpose. Never add more money...just because the market has gone up...Never mingle your speculative and investment operations in the same account, nor in any part of your thinking." This bull market we've been on for the longest time would've given him nightmares. -(p.22) "We have already defined the defensive investor as one interested chiefly in safety plus freedom from bother." There's a reason why the trope on this subreddit, and most of investing at large, for average people like us, is to just dump money into an S&P 500 index fund, presumably from Vanguard, and just leave it alone. That's the safest thing to do. It leaves you alone and your money is guaranteed to bring you back something (this is a gross oversimplification, I know). -(p.22) "We recommend that the investor divide his holdings between high grade bonds and leading common stocks; that the proportion held in bonds be never less than 25% or more than 75%, with the converse being necessarily true for the common-stock component; that his simplest choice would be to maintain a 50-50 proportion between the two, with adjustments to restore the equality when market developments had disturbed it by as much as, say, 5%. As an alternative policy, he might reduce his common stock component to 25% "if he felt the market was dangerously high", and conversely to advance it toward the maximum of 75% "if he felt that a decline in stock prices was making them increasingly attractive." This is a solid take away point, if nothing else. Why take more risk when you don't need to, and when taking less risk can give you a guarantee of your original investment? He continues to mention that he was saying this 50-50 allocation in 1958. Back when the DJIA (Dow Jones Industrial Average) was at 892. Yes read that last sentence again, that's not a typo. "At normal levels of the market...obtain an initial dividend return of 3.5% to 4.5% on his stock purchases...the half and half division between bonds and stocks would yield about 6% before income tax. Stocks were used as a hedge against inflation because he knows that bonds will be decimated by high inflation. -(p.23) "It should be pointed out that the above arithmetic indicated expectation of a much lower rate of advance in the stock market than had been realized between 1949 and 1964. That rate had averaged a good deal better than 10% for listed stocks as a whole..." Graham always aired on the side of serious caution. Always be a pessimist when it comes to expecting returns. He knew good and well this party can't last forever with stocks return way over 10%. I seriously would want to know how bad his skin would be itching with this current bull market. -(p.28) "It is true that the art of skillful or shrewd investment is supposed to lie particularly in the selection of issues that will give better results than the general market...we are skeptical of the ability of defensive investors generally to get better than average results-which in fact would mean to beat their own overall performance." Even for the experts at this whole investing thing, beating the market is hard to do. Very hard. To say that a defensive investor can try and do it, and succeed, is something Graham almost has to be skeptical about. -(p.29) His idea of dollar-cost averaging. "...Which means simply that the practitioner invests in common stocks the same number of dollars each month or each quarter. In this way he buys more shares when the market is low than when it is high, and he is likely to end up with a satisfactory overall price for all his holdings." DCA methods are a staple on this subreddit. Now we have some backdrop for where Graham is saying it from. -(p.31) "How many enterprising investors could count on having the acumen or prophetic gift to beat the professional analysts at their favorite game of estimating long-term future earnings?" There's people trained to do this investing game that people like us want to play in. It's another reason why you'll read here on this subreddit about dumping money into index funds and leaving it alone. Trying to beat the market is not impossible but it's really hard to do, especially knowing that there's people out there who are trying to beat the market too, and they're trained better than you are on how to do it. Now to be clear, an enterprising investor doesn't mean a non-defensive one. An enterprising investor just makes more efforts to invest aggressively. A defensive investor is someone who just wants to put their money somewhere to grow and be left alone. Which is fine and understandable. An enterprising investor wants to put in a bit more work towards their investments. That might be a good place to stop for now. It's a lot of information to take in for sure. But discussion is to help us question and learn. Do you think his concerns are valid now, in the midst of a massive bull market and these high valuations? [link] [comments]  |
| Dividend yield vs. Interest rates Posted: 02 Mar 2018 01:56 AM PST Hi, I'm a complete newbie and are thinking of getting into investing. I've looked into funds like Vanguards VFIAX which has a dividend yield of 1.74%. On the otherhand, my bank offers me an interest rate of around 3% for my deposits. Are the two comparable? Why would I choose funds if I can get more money out of having my money in a bank? Thanks in advance for the answers! [link] [comments]  |
| Daily advice thread. All questions about your personal situation should be asked here Posted: 02 Mar 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
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! [link] [comments]  |
| Posted: 02 Mar 2018 03:38 AM PST Hey guys. Does anyone hold IMF bonds or any of their investment products? I'm looking into getting some, but have no idea where to start. Thank you very much for your insight! [link] [comments]  |
| We should be talking about the effect of an unstable administration on the stock market. Posted: 02 Mar 2018 03:09 AM PST This is not intended to turn into a political flame war, though doubtless it will become one. To those of you who say that politics shouldn't be discussed on an investing forum, I say: If you think politics and the market are divorced from each other, then you don't understand either. The many issues with the Trump administration are too numerous to be mentioned here. Yesterday alone, Donald Trump blindsided the entire world, not to mention his own administration, with his announcement about the steel and aluminum tariffs. Apparently his own economic adviser was begging him not to do this. He did it anyway. His White House has seen an epic turnover of senior staff. Some of those same staff have been indicted by Bob Mueller. More indictments are certainly to come. The word on the street this morning is that Gates has flipped on Trump himself. It's entirely possible that Trump will be criminally indicted: for collusion, for money laundering, who knows. Don't believe me? That's fine. You still can't deny that the very fact that the possibility is being discussed is destabilizing. I don't care where you stand on Trump politically. We are at the point where we can no longer deny that things are becoming chaotic, and there has never been a time in history when a chaotic government has been good for a market. It's pretty clear that things are only going to get more chaotic in the short term. Nobody has the slightest idea what's going to happen in the long term. So, how to play this? Let's discuss sanely and rationally like the intelligent people we are, so that we can help each other get through this. I realize many of you are only interested in holding long term and for you this conversation might not be of as much interest. Myself, though I do hold a few long-term equities, I am also a swing trader of equities and options, and I'm sure I'm not the only one who is feeling a little pain right now. [link] [comments]  |
| Posted: 01 Mar 2018 05:42 PM PST Has anyone dealt with dividend reinvestment plans (DRIPs) that specialize in premium dividends? These are DRIPs that allow the shareholder to reinvest their dividends to buy shares at a discount to market value. If so, what company are you currently invested in that has this service? [link] [comments]  |
| LGI Homes priced on PE of 13 despite growing at 50% per annum for 5 years Posted: 02 Mar 2018 03:55 AM PST I know its a cyclical sector but that looks cheap This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research. Good article by Caterham Goodman Partners on seeking alpha [link] [comments]  |
| Toll Brothers trades on 20% discount to other builders despite outstanding performance Posted: 02 Mar 2018 03:45 AM PST Q1 revenues up 28% and EPS up 88%. This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research. Good article in seeking alpha by Stephen Percoco [link] [comments]  |
| What's the catch with Robinhood? Posted: 01 Mar 2018 09:05 AM PST I'm just wondering how they are making profit. For background, I am a 21 y.o. college student, and I already have an account with TDAmeritrade. About 2.5/3 years ago, I put $1000 into some etfs, now worth about $1500. I'm looking into putting another $500-$1000 into the market, and I'm curious if Robinhood is a good option for me. Sure $10 trades aren't crazy expensive, but if I make 1 $500 trade it is still 2%. Thanks in advance [link] [comments]  |
| Picking pennies in front of a slow moving steam roller Posted: 01 Mar 2018 08:33 AM PST That is how some describe the special situation of an arbitrage. Here is an idea: Bayer is buying Monsanto for $128. The deal is going to close before the end of first half 2018. Currently $MON is selling for $123+ which works out to be slightly under 4% gain within the next four months. Throw in the dividend yield of 1.75% divided 4, this works out to be around 4+% gain by June. Why is there a GAP between the buy price and the current price ? Well, three reasons come to mind: A. People don't really like Monsanto. B. People are afraid that the deal won't get approved by EU regulators. A previous attempt to buy Monsanto failed in 2016. C. Deal may takes too Long to close due to delays and extensions and people frankly have better places to park their monies. Well, these risks are real and despite today's Reuters news that Bayer/Monsanto deal is likely to close before mid year, I won't add to my already large position in Monsanto. Buffett currently is also betting that Monsanto deal will close. The world's largest seed / insecticide suppliers are concentrated to three countries: China (Sinochem bought syngenta last year) , USA (Dow chemicals bought DuPont in august last year), so I think it is more likely that Bayer of Germany will succeed in buying Monsanto. Cheers! [link] [comments]  |
| Posted: 01 Mar 2018 07:17 AM PST Compared to the other big tech and despite good earnings, $FB is just stuck. Is it time to go in? Are you long on $FB? [link] [comments]  |
| Mining commodities -supply and price charts/forecasts Posted: 02 Mar 2018 02:22 AM PST Hi there, I use http://www.infomine.com/investment/metal-prices/ to check out metal prices, but I was wondering if anyone has some good resources on where to check forecasts of price, current historical and future supply demand. Thanks [link] [comments]  |
| Delay in the release of earnings Posted: 01 Mar 2018 09:32 PM PST WageWorks (WAGE) announced today that they were releasing their earnings late. I was just wondering what this generally means or if anyone has any more information as it does not seem their is much available. (Not a shareholder just curious) [link] [comments]  |
| Spotify going public... how do I buy? Posted: 01 Mar 2018 07:16 AM PST So my knowledge of purchasing stock is next to nonexistent. I read that Spotify is going public. I'd like to buy when it does. How do I go about this on my own? What tools (websites/software) can help me do this? [link] [comments]  |
| Portfolio diversification idea Posted: 01 Mar 2018 03:36 PM PST I need you guys to criticize this idea I came up with for my long term investment portfolio. Any feedback is highly appreciated. So, I did a lot of reading recently about different portfolio allocations and robo-advisors. In the end I kind of failed to form a strong opinion, so I decided to have a bit of a trial. Here's what I came up with:
My initial plan was to let this trial run for a while (probably until the end of 2018) and then pick a winner based on performance and STD. But then, I questioned whether it would actually be a smarter move instead to just use the trial results to decide on the allocation of my total portfolio between these 3 sub-portfolios, reallocate accordingly and just stick with it. What do you guys think? [link] [comments]  |
| How does a -ve cash flow company like Tesla, still alive? Posted: 01 Mar 2018 07:51 PM PST |
| Posted: 01 Mar 2018 10:18 AM PST If you had to select one bank to invest in, which would it be? [link] [comments]  |
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