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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: 29 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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    Warren Buffet: "The longer you hold stocks the less risky they become, where as the longer the maturity of a bond the more risky it becomes."

    Posted: 29 Jun 2019 11:06 AM PDT

    In this video warren buffet says the quote in the title. And I was wondering if anyone here has some intuition as to why a government bond (which is what he was discussing) would be more risky as time passes, and why would a stock be less risky?

    submitted by /u/realhamster
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    80% of the stock market is now on autopilot

    Posted: 29 Jun 2019 06:20 AM PDT

    https://www.cnbc.com/2019/06/28/80percent-of-the-stock-market-is-now-on-autopilot.html

    Passive investments control about 60% of the equity assets, while quantitative funds -- those relying on trend-following models instead of fundamental research -- now account for 20% of the market share, according to estimates from J.P. Morgan.

    Passive funds have attracted $39 billion of inflows so far this year, whereas active funds lost a whopping $90 billion in 2019, the bank said.

    submitted by /u/coolcomfort123
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    Best App for Beginners in EU

    Posted: 30 Jun 2019 03:51 AM PDT

    I live in Scandinavia, so sadly I can't use Robinhood. Does the EU have a good alternative for beginners?

    submitted by /u/Just_Frame
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    Is "The Big Short" by Michael Lewis a good book?

    Posted: 29 Jun 2019 06:48 PM PDT

    I haven't read it yet.

    submitted by /u/FlatulentBubbles
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    Need help thinking through a long-term play on renewables

    Posted: 29 Jun 2019 09:11 PM PDT

    In the long run I am very bullish on renewable energy as I believe it will become an integral aspect of the global energy infrastructure. As I see it there are several angles/levels you could approach this from.

    - Get indirect exposure through buying into various commodities that are necessary for the production of solar panels, turbines, etc. Maybe this looks like buying some obscure heavy metal index or maybe its buying stock in mining companies that extract this stuff?

    - Take it a step up and pick specific stocks in this sector. Ie: producers, distributors, parts suppliers. While in one regard this seems like the easy and obvious choice -- go buy the most relevant solar/wind/hydro stocks -- this also seems like it would be most exposed to company level risk...maybe the big players in the market today wont be the big players tomorrow.

    - One step higher....somehow gain exposure to assets that reflect investment in the underlying infrastructure necessary to support a renewable economy. To me, this sounds like the best approach in theory however I cant really come up with what this would actually look like.

    I would really appreciate any general thoughts on this. Id be curious to hear about how you have approached this sector, criticisms of how I'm thinking about it, specific stocks that would be worth researching, etc.

    Cheers!

    submitted by /u/mightyduck19
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    Hi folks, can someone please advise me

    Posted: 30 Jun 2019 03:58 AM PDT

    Am currently trading CFD's but would like to move to something that is more sustainable for long term trading.

    I have citizenship in uk but currently living Australia. I've found margin loan trading to be pretty spot on for what I need but I need to be PR of Australia to open an account which I am not.

    Is there anything else I can do as in is there an alternative to margin loan buying/selling shares in the UK?

    submitted by /u/IrishHanJob
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    New investor tips

    Posted: 30 Jun 2019 03:32 AM PDT

    Hi everyone, as you understand from the title, i am a newbie (if not novice) at investing. Do you have any suggestions for a USD 1000 investment budget with medium returns?

    submitted by /u/chriscy43
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    P2P investing

    Posted: 30 Jun 2019 02:59 AM PDT

    Hey everyone, south korean male 28 years old here.

    Was wondering what you guys think about p2p investing that i can invest in but to corperates and people who offer houses and buildings as collateral.

    I found that they give 17% interest monthly for short periods before taxes and around 10% after taxes. 10% after taxes sound soooo good for me

    Since those are alot better than my indexfunds which average 7% before taxes.

    Do you think it's a good idea to allocate most my wealth to this? If the borrower doesn't pay, they say they can possess their assets or real estate which they put as collateral, so it's safe.(according to them)

    Please keep in mind these are not normal p2p for individuals, but rather lending to companies and realestate companies for interest.

    What do you think? Would it be wise to stop investing my VT etf and start pouring into these? (P.s they have a max of 20k per person investment limit)

    submitted by /u/Ace2735
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    For the ones actively valuing companies, does it look like the market is fairly valuing a lot of bigger companies as of late or do you still think the market may be heavily overvalued?

    Posted: 29 Jun 2019 10:45 PM PDT

    The slight interest rate increases we had last year cooled down a lot of the economy by the looks of it. Has this had the effect of bringing equity valuations down or do you think equities are still a bit too expensive now to get any sort of bargain out of it?

    submitted by /u/howtoreadspaghetti
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    A Potentially Terrible Idea

    Posted: 29 Jun 2019 04:25 PM PDT

    I had an idea which I think is good but runs completely counter to traditional investment advice. I wanted to make my pitch for it and see what everyone thinks and what Im missing.

    tl;dr - Based on the studies below, I think an internationally focused, diversified equity portfolio has a higher chance of netting 3% per annum over a 35 year time horizon than a traditional domestic focused stock/bond portfolio.

    My situation - Im in my mid 20s. No debt and work in a moderately high paying field (IT) with a fairly secure career. Thanks to living at home for a year after college, starting investing when I was a teenager and saving like crazy, I saved quite a bit of money. Assuming I keep up IRA contributions and get 3% matching on 401k contributions for my career, I need a real return of about 3% to retire comfortably.

    My Idea

    Given this, I think traditional advice would be to hold a decent portion of the portfolio in fixed income (bonds/CDs) and put the rest in mostly domestic stocks. I don't want to do anything particularly close to that. Here's my pitch for it:

    • According to Jeremy Siegel (U Penn prof. Stocks for the Long Run), over 20-30 year time periods stocks show strong mean reversion and have a lower variance than bonds. (link that shows this) looking at returns since 1800 in the US. In the Return on Everything Paper (Harvard/The Fed) which looked at global and US returns, this was more or less confirmed.
    • So, I think that over my time horizon, stocks should be less risky than bonds. Its not to say I don't need to transition to bonds toward the end of my career, for retirement, but I don't think holding them until I need to is helpful. (Im very risk/fluctuation tolerant)
    • That said, I don't totally trust US equities. Our current environment matches Carlo Cipola's criteria (Economic Decline of Empires) for an economically declining world power pretty closely and the last decade or so has seen us move closer and closer to the characteristics he identifies as common in these situations. I also don't see the US as particularly effective or cohesive socially or politically.
    • On top of this Jeremy Siegel notes that returns generated over longer periods of time have much more to do with valuations at the start of investing than the GDP growth of the country. PE ratio, although crude, does hold a decent bit of explanatory power and it is considerably higher for the US (20 or so) vs. internationally diversified ETFs (low teens).
    • Ray Dalio's Bridgewater & Associates published a piece which suggested that an equal-weight portfolio among developed countries would have returned something close to what the US market returned with much less volatility over the 20th century, which included 2 world wars which devastated Europe.
    • That said, I don't plan on leaving the US permanently (although I think living in another country for a few years would be cool) so whatever happens here economically will have an outsized effect on me vs the rest of the world and I want to make sure I don't totally miss growth here. Also a lot of our larger companies have significant revenue from abroad (40% for the S&P last I heard) so I will get some international exposure through that. Although, as Bridgewater points out, the country the business is located in matters a lot, irrespective of revenue.
    • Also, for buying international ETFs, buying an equal weighted basket of international equities is pretty expensive compared to buying internationally diversified index funds.

    So, Im thinking of putting about 35-40% in the US (VTI or similar), 25% in emerging markets (IEMG so I can get S Korea exposure) and the remainder in a mostly developed market, diversified etf (IXUS).

    This totally goes against most investment advice I've seen (60-70% in the US, often including some bonds, and 20-30% international).

    I imagine there are pretty good reasons why the typical advice is to invest a lot more in the US than overseas, but I don't know what they are. What am I missing here?

    submitted by /u/NjalBorgeirsson
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    Why chasing high yielding stocks is not the best investing strategy

    Posted: 29 Jun 2019 09:36 PM PDT

    Hey guys, figured I would share this video that goes over the Robinhood monthly dividend videos that have been popping up on YouTube. It covers the importance of payout ratio and investing in companies that have good cash flow over high yields.

    submitted by /u/killer_rabbit7
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    How to go long on Air Conditioners?

    Posted: 29 Jun 2019 05:46 AM PDT

    Europe is in the midst of a massive heat wave which appears to be more common in the past few years.

    Much of their city infrastructure has no air conditioning. For example, UK hospitals don't have any AC which seems a bit crazy.

    I'm assuming they're going to need to begin to install commercial units as the heat continues over the coming years.

    What would be a good way to invest for this scenario?

    submitted by /u/suckfail
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    My first real Investing lesson thanks to $MU

    Posted: 29 Jun 2019 04:38 AM PDT

    So I think I just got my first hard investing lesson. I did everything I wanted to do, studied businesses and looked for consistent growth of ROE/ROIC, operating cash per share, sales per share, eps and book value per share. Out of my whole list of companies that fit that criteria, semi's were having a double event. Inventories for both NAND and DRAM memory chips are very cyclical and seem to have hit a floor, or at least were close to the bottom of the cycle. The trade war first meeting gaffe sent them down, then the Huawei ban really hit them hard as well. A few big value investors made big bets on Micron including Pabrai etc... Micron was definitely on sale and had a good margin of safety. They still were industry leaders etc... good management, buying back stock like crazy since their FCF was still great.

    I bought 100 shares at $35. When it dropped to $33.50ish I sold a covered call on my shares with a $36 strike thinking I could scrape some premium while I waited for inventories to clear up. It was a very short option, 7/5 expy so didn't seem like much risk. Well, turns out they "beat" on earnings because it wasn't as bad as predicted and then the Huawei thing at G20. I knew both events were happening in the time frame too. It was sniffing $40 before the Huawei ban was lifted this am!

    I didn't lose money on it, in fact will make a very small profit but I should have just trusted all my research! Or at the least waited until the two major catalysts passed and then assessed what the situation looked like. Doh!

    submitted by /u/585brewerypal
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    Experienced crypto investors

    Posted: 29 Jun 2019 03:31 PM PDT

    Any seasoned Crypto investors out there? The internet is saturated with pumpers and shorts so it's very hard to filter out meaningful information and price forecasts. I've been looking at $LINK $ETH #XRP and of course $BTC the past week or two. It's interesting that some of these coins have a cult following on the web and a lot more blind optimism than logic.. If anyone is into charts or can point me in the right direction with the usage, application, or partnerships any of these currencies might have I'd appreciate the insight. Send me a PM. I don't need any affirmation on Bitcoin, I've always been a believer. Looking into alt coin investing at the moment.

    submitted by /u/enew82
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    Trump says agreed U.S. won't raise tariffs, China will buy U.S. farm goods - buy agriculture options

    Posted: 29 Jun 2019 10:06 AM PDT

    US govt to provide aid program - https://www.reuters.com/article/us-usa-trade-china-agriculture/trump-says-us-farmers-to-get-15-billion-in-aid-amid-china-trade-war-idUSKCN1SJ22Z

    and at the same time China may increase purchases on USA agriculture products

    "We're holding back on tariffs and they're going to buy farm products," Trump told a news conference after a two-day summit of the Group of 20 in Osaka, western Japan.

    https://www.reuters.com/article/us-g20-summit-trump/trump-says-agreed-us-wont-raise-tariffs-china-will-buy-us-farm-goods-idUSKCN1TU08B

    strategy: buy calls on CORN, SOYB.

    What do you think?

    submitted by /u/jhadj
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    Does anyone else think that Jim Rogers is right on the money (pun intended)?

    Posted: 29 Jun 2019 09:52 PM PDT

    He's predicting a more severe crash than 2008 to occur within the next year or two. His logic is simple: far more debt now than in 2008. US mortgage debt is back at 2008 levels, but more importantly US non-financial corporate debt is far higher than it's ever been due to a decade of cheap money from QE. Global debt is higher than it's ever been and China is in trouble this time with a 300% debt-to-GDP ratio, largely from unsustainable construction projects.

    Factor in that derivatives trading and debt traunches were never made illegal after 2008 and continue to be widely used. Also factor in that the Fed is currently transitioning from QT to QE BEFORE THE RECESSION IS EVEN STARTING - they're just trying to further inflate the stock-market bubble and now won't have much QE available when the crash actually does happen.

    This all seems so straightforward to me, and I really don't see how it's possible that another major crash wouldn't happen in the near future.

    submitted by /u/DoItYrselfLiberation
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    Leverage: RE vs stock market

    Posted: 29 Jun 2019 04:14 AM PDT

    I frequent a lot of subs and investment circles and somehow buying Real Estate with leverage is the norm,highly appreciated and nobody buys with cash. It is not considered to be very risky.

    On the other hand, buying stocks.with leverage is considered a super high risk speculation.

    What's the difference I don't get?

    submitted by /u/aelaos1
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    Please critique this strategy.... “Momentum Investing”

    Posted: 29 Jun 2019 04:34 PM PDT

    Has anyone ever heard of the momentum investing strategy? Basically it goes like this...

    You get a list of stocks on the NYSE or NASDAQ and pick a time period to go back, let's say 6 months. You sort the list by the highest performing stocks in that 6 month period and you buy the top 10% on that list. Then you filter by the lowest performing stocks during that 6 month period and short the lowest performing 10% on that list. You hold this portfolio for 6 months, rinse and repeat.

    I've read that this strategy can actually outperform the S&P 500 but I never saw actual proof of this backtested. Is this really as good as it sounds? Why not do this vs. just investing in index funds?

    submitted by /u/trnd_sttr
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    Already nine megadeals were announced in the first half of this year. At this rate, 2019 could be headed for a record M&A activity.

    Posted: 29 Jun 2019 12:46 PM PDT

    Almost $500 Billion of Megadeals Get Panned Instantly.

    More

    https://yhoo.it/2xiEde9

    submitted by /u/markyu007
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    Dividend growth calculator or excel formula

    Posted: 29 Jun 2019 12:37 PM PDT

    Hi guys, I am 28 and currently yielding about $3300.00 a year from dividends, i want to see if anyone has a calculator or excel formula that i can plug in and see what my approximate yield would be in 20 years.

    I want to be able to see if i reinvest my dividends and my dividend growth rate grow 10 percent a year what would be my dividend yield after 20 years?

    Thanks

    submitted by /u/mikebats1990
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    ESG ETFs

    Posted: 29 Jun 2019 04:19 PM PDT

    I'm looking into investing in ESG ETFs, but I'm not really sure where to start. A Google search yielded dozens of results, so I'm curious if any of y'all have any advice on where to start.

    I understand that I would have more flexibility if I created my own portfolio, but I signed a contract barring me from investing in individual securities for my job (data analyst for several hedge fund clients).

    submitted by /u/henrythedingo
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