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    Daily Advice Thread - All basic help or advice questions must be posted here. Investing

    Daily Advice Thread - All basic help or advice questions must be posted here. Investing


    Daily Advice Thread - All basic help or advice questions must be posted here.

    Posted: 02 Jun 2019 05:14 AM PDT

    If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions. If you are going to ask how to invest you should include relevant information, such as the following:

    • 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 significant other?
    • 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.

    Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq

    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
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    Morgan Stanley Sees Recession Within a Year If Trade War Gets Any Worse

    Posted: 02 Jun 2019 10:22 AM PDT

    https://www.bloomberg.com/news/articles/2019-06-02/morgan-stanley-sees-recession-within-a-year-if-trade-war-builds

    Until recently investors assumed that Tariff Man would keep the trade talks in his back pocket, eventually striking a deal for an easy win before re-election.

    What many are now realizing, is that China may not come back to the table, or at least in the same manner that they had before. China's Communist Party has pressure from their hardline nationalists to walk away. President Xi Jinping has created a political brand centered around more nationalistic policy that is critical of the "Opening of China" to Western markets. The politically safe move for Xi Jinping is to stand up to the US to prove China's strength and independence, regardless of the economic ramifications.

    Another factor sinking in for investors is the prospect of supply chain disruptions which will take years to re-establish. As Tariff Man has proved his unpredictability with the addition of recent Mexico tariffs, companies cannot rely on stable trade policy to simply move their production from China to Mexico. There is an increased risk involved with relying on Tariff Man's current trade policy to establish new supply chains, since they could be disrupted tomorrow with a simple tweet. Companies looking to establish new factories and supply chains may be inclined to wait until the end of Tariff Man's reign to find some stability before re-establishing or expanding their production.

    submitted by /u/sesamestreetgang
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    The yield curve is no longer a reliable recession predictor, according to Wells Fargo Securities

    Posted: 02 Jun 2019 02:59 PM PDT

    The bear case for Apple

    Posted: 02 Jun 2019 09:07 AM PDT

    https://www.washingtonpost.com/business/apples-future-comes-down-to-four-crucial-questions/2019/04/30/81081e44-6b9a-11e9-bbe7-1c798fb80536_story.html?noredirect=on&utm_term=.ebb4fc3a9558

    I'm watching Apple drop and getting tempted but this article sums up my main concerns for the stock. People bullish on Apple's long-term - how do you see them using their brand/moat to generate major future revenue steams which don't currently exist?

    submitted by /u/Freeman6574
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    How to convince a friend that daily trading just does not work for her?

    Posted: 03 Jun 2019 03:19 AM PDT

    Have a close friend of mine who is excited about daily trading. She follows a few Youtube channels about tips to speculate market, things like how to read the graph and decide when is to buy and to sell. I already told her:

    • it is incredibly hard, if not impossible, to beat the market.
    • if there is a trick that can beat the market, it is either obsolete, or the one knows it is secretly making money for himself.

    She is not convinced. How can I convince her otherwise?

    submitted by /u/shouldnotexist
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    Can someone explain to me like I'm 5 how my preipo shares work based on an offer I have received?

    Posted: 03 Jun 2019 02:32 AM PDT

    Received an offer from a startup and I think I vaguely understand what this means, but wanted to see if anyone could correct me or offer more insight.

    Equity Award. Subject to the approval of the Company's Board of Directors or its Compensation Committee, you will be granted an option to purchase (or. alternatively. be offered the opportunity to purchase) 15,000 shares of the Company's Common Stock (the "Equity Award"). The exercise price per share (or. alternatively, purchase price) of the Equity Award will be determined by the Board of Directors when the Equity Award is granted. The Equity Award will be subject to the terms and conditions applicable to options granted (or. alternatively, common stock issued) under the equity plan in effect at the time of the grant and the applicable stock option agreement (or, alternatively, stock purchase agreement). You will vest in 25% of the Equity Award shares after 12 months of continuous service, and the balance will vest in equal monthly installments over the next 36 months of continuous service. as described in the applicable stock option agreement (or. alternatively, stock purchase agreement).

    I was told these shares equal about half a basis point within the pool. The company has series A funding with around 20m in funding (2 seed rounds + series A)

    What I think this means:

    To me it sounds like I will have the option of buying these 15k shares at a price (what's the price? Or how do I find this out? Or what's maybe an average or some sort of ballpark?), but then after a year I will...get? 25% of these, and the rest will vest on an even schedule for the next 3 years (so a 4 year plan).

    I guess I'm confused on the part where it says the shares will start vesting after a year (25%), but then there is the part where I also have to buy them? So I have to buy them and then they will start vesting? Or will I get vested shares anyway?

    Any help appreciated.

    submitted by /u/oreocoloredcat
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    Growth vs Blend vs Value Funds

    Posted: 02 Jun 2019 04:46 PM PDT

    Is it ideal to have a fund that hits each of them, particularly when it comes to index funds or is that overkill? I've been going back and forth on funds for my Roth and I keep coming back to the question of whether adding all of them would help me in the long run. Funds in question are VUG, VIG, and VYM. They all are large cap but cover a different style. I already own VIG but I'm debating on getting the others. As growth or dividend funds, I feel it would help my overall portfolio

    Proposed allocation:

    target 2065 fund- 60%

    VIG -11%

    VYM- 5%

    VOT- 6%

    VBK- 10%

    VUG- 8%

    submitted by /u/haha_thatsucks
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    Buying all shares individually in the OMXC25-index vs just buying the index itself

    Posted: 03 Jun 2019 03:12 AM PDT

    I am currently having a hard time figuring out which would be more profitable in the long run.

    1. Buying individual stocks means I have to pay $5 dollars every time I buy a stock.
    2. Buying the index itself means I have to pay an annual fee of ~0.5% , but I will not have to pay for buying; only selling.

    If I buy each share, I will get dividends 1-2 times a year.

    If I buy the entire index I will get ~$1-1.5 per share in dividend.

    It is a bit more expensive to buy individual shares, but I will get dividend and be able to buy more on dips. I will not have to pay the annual fee of 0.5%.

    Edit: More or less it woul equal buying every stock in the S&P500 (but only 25 stocks) vs just buying the index

    submitted by /u/J-coor
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    What’s so different about right now than where we were around a year ago? Why sell now?

    Posted: 02 Jun 2019 05:38 AM PDT

    I've seen a lot more of those "it's probably time to sell, we're at the end of the bull market, boomers are getting old, etc" in a place where last year every time someone said something about selling people got tired of saying "don't try to time the market" what's so different now?

    submitted by /u/cpayne_10
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    Ways to better maximize my portfolio for better tax efficiency. What should I know?

    Posted: 03 Jun 2019 01:30 AM PDT

    Hi everyone, can anyone care to explain how I should go about organizing my portfolio to better maximize it for taxes.

    Background:

    18

    New York City

    Accounts:

    Fidelity Individual Brokerage Account (Value $0)

    Robinhood Brokerage Account (Just using this for the moment to save on fees, they add up)

    ROTH IRA Fidelity

    401k (Work)

    My Plan (feel free to tell me what I should do):

    Robinhood (individual stocks, ETFS) (long term)

    ROTH IRA (Index Funds, three fund portfolio) (long term)

    Question:

    When I am buying a stock,any index funds (three fund portfolio), ETFS should I just do all of this on Robinhood or my Fidelity IRA?

    I am hearing it's cause the ROTH IRA I can't take it until retirement and any penalty fees. I am not worried about liquidity since this is a long term investment and securing my financial future.

    I want to someone to explain taxes to me like I am a five year old in regarding to stocks and my accounts. Thank you.

    p.s

    should I close the Fidelity Individual brokerage?

    submitted by /u/googlecarti
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    A brief explanation about capital expenditure in owner's earnings?

    Posted: 02 Jun 2019 08:56 PM PDT

    Can anybody care to explain the implications of Capital Expenditure that Warren Buffett in Berkshire Hathaway's annual report in 1986?

    Buffett says ;

    "These represent (a) reported earnings plus (b) depreciation, depletion), amortization), and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."[1]

    What I'm doubtful here is if we should consider the plant and equipment purchases that are meant for expanding its operations to increase their revenue or if we should consider only the maintenance capital expenditure that is somehow close to the depreciation value, i.e, the cost to run the business maintaining its unit volume to be the same as the previous year.

    I'm a little confused over this aspect here. Care to explain, anyone?

    submitted by /u/yeohap
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    Illinois to make Weed legal

    Posted: 02 Jun 2019 12:34 PM PDT

    Illinois is making weed legal for recreational use, and I want to know how to start investing in this before the big boom hits. Is there certain companies or ways I should be investing?

    submitted by /u/TheSkiingMonkey
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    Stock as collateral for house purchase

    Posted: 02 Jun 2019 10:25 PM PDT

    Is there a way to use stock as collateral for a house purchase directly, rather than take the tax hit of selling the stock?

    submitted by /u/tletnes
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    Is it a bad idea to switch my ETFs over to the corresponding mutual fund?

    Posted: 02 Jun 2019 08:49 AM PDT

    I don't like that I always have some money left over because you have to buy full shares, and want to set up a monthly automated purchase.

    Also, I use Fidelity but currently have VTI and the Vanguard international market fund, if I switch should I go with the Fidelity zero funds instead?

    submitted by /u/flybonzai0725
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    collateralized loan obligation credit quality?

    Posted: 02 Jun 2019 09:44 PM PDT

    Does anyone know if it is possible to get a hold on credit data from the most popular traded CLO's?

    Like data on which companies are in the CLO etc.?

    submitted by /u/sazzacsaz
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    Low knowledge personal investor

    Posted: 02 Jun 2019 09:40 PM PDT

    I am beginning to have money that I would like to invest for returns. I have an emergency fund in a money market account, and would like to grow my additional savings through some sort of investing. Am I best to just put money in an index fund like vanguard, or should I be trying to speculate in the stock market. From what I can tell options trading is better returns but more work. Any thoughts? I am just an office worker with very little knowledge of the market. I put a few thousand in a Alibaba just before the trade sanction, haha, leaving it in.

    submitted by /u/StaysInBed415
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    Question on data to maximize my portfolio's Sharpe Ratio (and/ or minimize variance)

    Posted: 02 Jun 2019 05:22 PM PDT

    Hi all,

    I'm researching how to rebalance my portfolio and got interested in some of the more technical modeling involved in rebalancing for an optimal portfolio (in this case, all stock as a test).

    I have a few questions when thinking about the data I need to analyze. My goals are to model the optimal risky portfolio for the best Sharpe Ratio and to also see what weights to give to achieve least variance.

    • When working with return data, do I need to match time periods for all stocks? I was working with monthly adjusted return data for the past five years for almost all of my stocks, however, I have holdings in one stock that IPO'd in 2017 so the time periods here don't necessarily match. Should I only use data that matches in time period? Is five year data too little or too much?
    • If I use 5 year return data, can I still use the 10yr Treasury Rate to calculate Sharpe Ratio? Should I be using a 5yr Rate? Or a rate that matches the time period of return data I'm using?
    • Finally, in practice, do investors aim for highest Sharpe Ratio for their portfolios or for the least variance (I know these are two separate goals) depending on goals? As it stands, I have a portfolio of a handful of stocks with differing variances and originally invested in small holdings of some stocks because I was interested in the companies or used their services, but when doing my initial model, it seems that I should sell many of these small holdings because they don't align with my model objectives -- thoughts here?

    Apologies if this is not the best place for this discussion but thought it was relevant here.

    Thanks!

    submitted by /u/sumgrad
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    Overpriced vs oversold after a market dip? What types of factors should a person look at?

    Posted: 02 Jun 2019 08:17 PM PDT

    Recently, I luckily stayed out of the volatile stocks during this time period. But there have been several I've been keeping my eye on.

    Now that the market is again taking a dip, if it might perhaps gets as low last decemeber/early january. I wonder how I can make a decent call if things were originally overpriced or if they just became a victim of market volatility and will climb back up higher once things get better.

    Three examples I've been looking at is TSLA, NVDA, and DBX. I know the bull and bear arguments for all of them but I cannot for sure lean in towards any direction.

    So I wonder if there are some numbers I should be paying extra attention to for stocks that go into way oversold territory and make a large rebound versus a smaller rebound?

    submitted by /u/diff2
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    Investing in silver?

    Posted: 02 Jun 2019 07:18 PM PDT

    What do you guys think about investing in silver? The silver to gold ratio is at its lowest in 26 years (1993) which is a sign of slowing global growth. 57% of silver comes from Asia, especially for computer chips, smart phones, etc. The trade war is slowing Asian production. Is silver really cheap right now/would it be a good long term buy?

    https://www.wsj.com/articles/in-silvers-slide-another-sign-of-global-growth-worries-11559499172?emailToken=c45fe2a67bd38fa3f533c8318bd460f0kn6jT4vWVpGqlQA6Dycs8y2qCyp22HwvXeScu2upmbwjyHik5WhUucyFtLYWfnhfHbVyWzgubsv3OmOIGKhq3S0BD1zQu0ed/rWvmGFX8ouVhiYz4ODRwC5PCOPFOZKq&reflink=article_copyURL_share

    submitted by /u/FatherFibonacci
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    20 years old nothing done! but I think im on to something

    Posted: 02 Jun 2019 06:53 PM PDT

    Hello, Reddit my name is Brian and I turned 20 last April. I felt like I had nothing done in my life so I decided to plan out my financial plan. So what I'm planning to do is to drop out of college and work full time at a minimum wage job. The reason being that I have the benefit of living free at home, so I can invest 100% of my earning. I have also created a trading bot that can net me some decent returns, which I think can compound over time. I'll post some results below but basically the bot long shorts with the only trend. I honestly think this is my best options since I have no interest in any major and I don't think I will be able to find one :(. So far I have been only taking general ed classes in my community college but I think I would be in debt If I ever went to a 4-year college. I also have some friends that went to college that were 100x smarter than me that could not find any job after graduating. Anyways to recap I am dropping out to work in McDonald's in order to fund my trading bot. I also plan to improve the bot and transfer it to quantconnect.

    Here are some screenshots of my bot :D

    The bot negs sometimes but over a long period of time it does pretty decent

    https://imgur.com/NAH6QLB

    2 and a half years backtest

    https://imgur.com/a/XOuDmgZ

    2x leverage

    https://imgur.com/FZWHpxD

    If the market does something similar to what it did a couple of years ago and The price of BTC stays relativity the same I think working in McDonalds would be my best bet.

    submitted by /u/bsong112
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    This subreddit seems amazing but is focused on the US. Is there any similar subreddit for the UK?

    Posted: 02 Jun 2019 11:06 AM PDT

    Quick futures question

    Posted: 02 Jun 2019 06:17 PM PDT

    When you look at futures data on CNBC, how accurate is it in predicting what the market will do tomorrow? Is it reliable at all?

    submitted by /u/hmshood
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    Any cheap/free tools to screen for stocks?

    Posted: 02 Jun 2019 06:04 PM PDT

    I'm looking for a tool that will allow me to quickly look at stocks financials without having to put together the numbers for a TTM for example.

    Someone recommenced me GuruFocus, but it costs over $450 a year. Are there cheaper options out there?

    submitted by /u/ThaTruth_24
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