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    Saturday, August 31, 2019

    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: 30 Aug 2019 05:17 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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    Exxon Poised to Drop From S&P 500’s Top 10 for First Time Ever

    Posted: 30 Aug 2019 03:59 PM PDT

    (Bloomberg) -- Exxon Mobil Corp. is poised to drop out of the S&P 500 Index's 10 biggest companies for the first time since the index's inception some 90 years ago, the consummation of a long-term trend of tech titans replacing industrial giants in the top ranks of U.S. stock market.

    Visa Inc. replaced Exxon as the 10th biggest member of the index by weighting on Aug. 1 and two weeks later Procter & Gamble Co. also overtook the oil giant, according to data compiled by Bloomberg. S&P Dow Jones Indices will likely confirm the move when it publishes its month-end weightings Saturday.

    "The oil sector has gone from being the leader of the world economy to a laggard," said Tom Sanzillo, director of the Institute for Energy Economics and Financial Analysis, who traces Exxon's presence in the S&P top 10 back to the 1920s.

    The growth of technology giants like Facebook Inc., Amazon.com Inc. and Microsoft Corp. over the past decade coincided with the shale revolution that created an abundance of oil globally, weighing on energy companies. Exxon, once the gold standard in Big Oil, also has made some missteps: betting on Russia just before the country was slapped with sanctions and plowing money into U.S. natural gas in 2010 as prices collapsed.

    With many investors betting on a post-hydrocarbon world, energy faces a battle to stay relevant to generalist investors. The sector makes up just 4.4% of the S&P 500 Index compared with 11.7% a decade ago.

    https://www.bnnbloomberg.ca/exxon-poised-to-drop-from-s-p-500-s-top-10-for-first-time-ever-1.1309462

    submitted by /u/closingbell
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    'Recession' posts on /r/investing tracked against S&P 500 [OC]

    Posted: 30 Aug 2019 06:56 AM PDT

    I'm surprised nobody has done this yet. After dvdmovie called this place /r/recessionwatch lately, I was curious to see how many actual threads were created daily about it. I used pushshift to get all post titles with 'recession' in it and plotted it against the S&P closing price for the day. There were 24 recession threads on August 14, 2019! Average of 1.8 recession threads per day.

    Apologies if not appropriate here, I just thought it was interesting.

    https://i.imgur.com/5Hf3DEE.png

    EDIT: wow this blew up! This wasn't meant to be predictive or anything, I just thought it was interesting to see the number of recession posts as the market continued to climb over the past few years. I'll try to tweak it a bit and clean it up.

    submitted by /u/_J0hn_
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    Could increased amount of access to the market be creating a bubble of its own?

    Posted: 30 Aug 2019 09:52 PM PDT

    I'm curious if this is possible. The average Joe has more access to do dumb stuff on the market than ever. Between all the new trading apps like Robin Hood, Acorns, Think or Swim, etc., is it possible for the market to become artificially inflated based on large volume trades on "meme stocks."

    For example, I feel like it's somewhat bizzare for a company to post a few cents over expected earnings and go up 20% in one day. Or for a company like ULTA to drop near 30% after an earnings miss.

    Some of the stocks I have my primary portfolio and retirement funds invested into will take a 2%-3% dip after a missed earnings, or the same inversely when talking about beating expected earnings.

    Point being, could all these overinflated companies and giant swings in share price be creating something of a bubble just because of folks like r/wallstreetbets and r/optionstrading?

    P.S. please disregard my post history

    submitted by /u/GHOSTLYHUMAN
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    Amateur investors fail to diversify and are better off choosing stocks at random

    Posted: 30 Aug 2019 05:29 AM PDT

    For the study, researchers first asked participants to create portfolios of financial assets using tables of previous returns, and then assessed the participants' level of financial literacy. The researchers found the investors with poor financial literacy tended to choose positively correlated assets – for example, stocks in oil companies and forestry -- which tend to fluctuate in value together.

    "An amateur investor might buy stocks in lumber, mining, oil and banks, and believe they are diversifying because they're investing in different companies and sectors," said David Hardisty, study co-author and assistant professor at UBC Sauder. "But because all of those equities tend to move in unison, it can be quite risky, because all the assets can potentially plunge at the same time."

    More experienced investors know to hedge their bets by including negatively correlated assets, which are likely to move down when others go up — or uncorrelated assets (ones that move up and down independently of the others) in order to mitigate losses.

    The researchers also found that the amateur investors were actively preferring correlated assets because they seemed less complicated and more predictable.

    "If it seems predictable, it seems safer and easier to track," explains Hardisty. "Whereas if you have a combination of assets that all go in different directions, it seems chaotic, unpredictable and riskier."

    Ironically, when the study participants were encouraged to take more risk when creating a portfolio, the amateur investors ended up making safer, more diversified selections, compared to when they were encouraged to avoid risk.

    "This shows that amateur investors rely on a definition of risk that greatly differs from the objective definition of portfolio risk," said Yann Cornil, assistant professor at UBC Sauder and co-author of the study. "This can lead them to make objectively low-risk investments when they intend to take risk, or to make high-risk investments when they intend to reduce risk."

    The researchers found that when amateur investors are shown the aggregate returns of portfolios (and not merely the returns of each asset composing the portfolio), they can see that having negatively correlated or uncorrelated assets is the winning investment strategy — even if it might seem counterintuitive to play both sides.

    "If you don't diversify, when one asset does well the other ones are also going to do well. But if one does badly it's likely the others will all do badly — and in investing, you want to avoid those worst-case scenarios," says Hardisty, who hopes the research will encourage investors to educate themselves on investment strategies, and use the diversification tools that online investment services provide to properly balance their portfolios.

    "In the best-case scenario you could make lots of money and have an extra vacation or buy a car or something like that," he explains of the positively correlated accounts. "But if your whole portfolio crashes you could risk losing your life savings. So, the best-case scenario isn't that much better, but the worst-case scenario is a whole lot worse."

    UBC Sauder School of Business Assistant Professor David Hardisty co-authored Easy, breezy, risky: Lay investors fail to diversify because correlated assets feel more fluent and less risky along with UBC Sauder School of Business Assistant Professor Yann Cornil and D'Amore-McKim School of Business Associate Professor Yakov Bart. The study was recently published in Organizational Behavior and Human Decision Processes.

    https://www.sauder.ubc.ca/news/insights/amateur-investors-fail-diversify-and-are-better-choosing-stocks-random?utm_campaign=2019-sauder-q2-pr&utm_medium=paid_social&utm_source=facebook_sf&utm_content=investor

    submitted by /u/NineteenEighty9
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    Why is the spread between short term treasuries and CD yields so high?

    Posted: 31 Aug 2019 03:47 AM PDT

    About a year ago 1-3 year treasuries were yielding slightly more than CDs with similar terms. Given the liquidity and tax advantages buying treasuries made sense. 12 months later CDs are yielding 80-100 basis points higher than treasuries. This seems like a very big difference. Is such a difference unusual? Is it likely to continue?

    submitted by /u/rpersimmon
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    Online trading of Johannesburg Stock Exchange?

    Posted: 31 Aug 2019 03:01 AM PDT

    Hi all, I recently started investing in the U.K. in my stocks and shares ISA. Going well so far :) I've been using iWeb share dealing which is run by Halifax because it has very low fees.

    One of my stocks I purchased was subject to a takeover, and I've been granted some stocks in the company which purchased my shares.

    The problem is, the new company is only listed on the Johannesburg stock exchange, which my online broker doesn't trade in.

    I need to find an online broker that can trade on the JSE so I can transfer my stocks to the new broker and sell them. Are there any you can recommend?

    Also, will this be complicated by my use of a stocks and shares ISA?

    Thanks for any pointers!

    submitted by /u/mccrackm
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    If a recession hits, what are the top 3 things that anyone must know to be ready for one?

    Posted: 30 Aug 2019 08:23 PM PDT

    With the USA economy has been booming since 2008. Some argue that we're overdue for a recession.

    In your opinion, what are the top 3 things that anyone must know to be ready for one?

    submitted by /u/DismalAd9
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    How to invest in ETF as a Bulgarian (EU) citizen?

    Posted: 31 Aug 2019 04:18 AM PDT

    I'm really interested in investing in FIVG ETF, however, it looks extremely complicated. So far I found that ETF in TD Ameritrade and Fidelity but I cannot open an account there for some reason - I think they do not accept non-US citizens. Is there a platform or an app that would allow me to easily sign in, verify my account and start investing? Coming from the crypto world, investing in those traditional instruments looks so last century...Why isn't there a simple app or platform where you can start trading in minutes?

    submitted by /u/injenera
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    Pork prices in China exploding to record levels

    Posted: 30 Aug 2019 06:33 AM PDT

    Not sure what I have ? is it worth anything ?

    Posted: 30 Aug 2019 02:32 PM PDT

    I recently found out I have 2000 shares to a company called mphase technology. I looked it up at the moment the shares are valued at 80 cents a share does that mean that mean I have 1600 dollars ? To me that would be a lot of money seeing that I am broke and in college any information on this would be helpful. This seems to good to be true.

    submitted by /u/leadfarmer3000
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    Hello! Does anybody knows how to buy US dollars and put them on a fund while on Mexico

    Posted: 30 Aug 2019 07:53 PM PDT

    Why Gold is a terrible store of value

    Posted: 31 Aug 2019 01:14 AM PDT

    All of us have heard countless number of comments on how Gold is a great store of value. This post is to debunk it.

    Inflation rate started to go above 2% from 1966. Gold was $275 in 1966 (taking lowest point in 1966) and Gold was $1950 in 2011 (taking highest point in 2011). Take note that $275 is close to Gold's ATL (all time low) point and $1950 is Gold's ATH (all time high) point. Therefore we are giving Gold the biggest possible jump in ROI.

    Gold did roughly 609% during that span of 45 years or 13.53%/year (the correct value is 4.45% to account for compounded interest. credits to SubstantialMonitor0 ). Initially it look like those are great returns however take note that during the last 45 years, there has been massive amount of inflation to the USD.

    The 1959 money supply was 138,900 million and 2019 was 3,852,100 million. The money supply has gone up 27.7 times or 2670% in the span of 60 years. The earlier calculation for Gold was a span of only 45 years and it only did 609% with consideration it was mostly between Gold's ATL and ATH. For Gold to retain the same value, it should have gone up 2670% or so and this is just to retain its value, not increase in value.

    Do you still think Gold is a great store of value? Do you think the price of eggs and bread in 1966 was just 7 times the current price? I think in the last 20 years alone, food has already gone up 5-7 times.

    Update 1: Due to sizable confusion, let me give an example. Let say I was in the 1960s and I have 10k usd to my name. With 10k usd, and eggs, milk, bread, all priced at like nothing, 10k usd will have bought me a ton of everything and I am probably rich at that time. Now let say I put all of that into Gold as a "great store of value," decades into the future, my 10k can buy less of everything now since everything is priced with inflation. If USD has gone up 27 times in 60 years, I think eggs will have gone up 27 times at least in the same amount of time. All our necessities will increase in price to reflect inflation. Do you think eggs were just 7 times cheaper in 1960s? Food has already gone up 5-7 times in the last 20 years. That said, however holding Gold is still better than holding USD but I think land/property may be a better hold of value or even eggs if they can last that long.

    Update 2: It has been corrected that Gold is a good store of value in the US vs price of milk because milk only went about 6x since the 1960s, from $0.49 per gallon to today around $3.10 per gallon (pointed out by gotNoGSD and _Black_Mirror_IRL_). However because I am not an American, food has gone up drastically in the last 20 years for me and it can be close to 7-10x. It is common for my parents to say that they will spend $0.10 for a meal in their childhood, while today the average meal will cost $15-20. This is in Asia. I am starting to think that a chicken farm in Asia is a good store of value lol.

    Source:Gold price https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

    USD inflation rate https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093

    US money supply https://www.ceicdata.com/en/indicator/united-states/money-supply-m1

    submitted by /u/theforwardbrain
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    Happy birthday Warren Buffett!

    Posted: 30 Aug 2019 09:50 AM PDT

    The wizard of Omaha was born on this day in 1930. For how much we all like to talk about him, let's tip our hats to the oracle today and reflect on the fact that he's now 89...

    submitted by /u/LateralEntry
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    Michael Burry says passive investment is a bubble.

    Posted: 30 Aug 2019 11:29 AM PDT

    Hey i just saw this, curious what people think? Is he talking about the concept of just buying a vanguard total market fund and forgetting about it for 30 years? I dont see how that can be a "bubble" or am i missing the point?

    https://markets.businessinsider.com/news/stocks/big-short-investor-michael-burry-calls-passive-investment-a-bubble-2019-8-1028481790

    submitted by /u/martymcfly421
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    I have questions about a strange pattern I saw in the bond market last night.

    Posted: 30 Aug 2019 01:09 PM PDT

    I was looking at bond yields online last night and noticed the 3 Month US bond rate was climbing rather quickly. I pulled up a graph of the rate and over the course of an hour it followed a pattern where it would climb to around 4%, then immediately drop off to around 2%. It did this about 12 times over the span of a couple hours and then went flat again. What would cause this to happen? Is it normal?

    submitted by /u/restednready
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    How do I gain practical experience with investing/learn to invest quickly?

    Posted: 30 Aug 2019 03:47 PM PDT

    I'm a college student who is finding time to learn how to manage my personal finance and understand the power of money. I'm studying computer science, which takes up most of my time, but I'd like to learn investing through doing rather than looking up terms on Investopedia. In your opinion, what are some good ways to be proactive about investing and avoid 'analysis paralysis' as someone with very little money to start with? Thanks.

    submitted by /u/Autstorm
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    Is there alarm clock for stock?

    Posted: 30 Aug 2019 11:18 PM PDT

    Most stock app have alert when stock reach a certain price. But it only sound once which will most likely be missed if you are sleeping.

    Is there an app or website which will act as an alarm and keep ringing until you wakeup? It'll be really useful for people investing in multiple market.

    submitted by /u/Mvewtcc
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    What are some news sources that we can look to for investing news that is easily accessed on a phone? Also are there any websites that are good for analyst ratings of a stock?

    Posted: 30 Aug 2019 09:24 PM PDT

    I know that this question has probably been asked a million times, but I was wondering because there seems to be so much news pushed on people that I'm wondering which ones we can really trust. I am an older part of Gen Z and I don't know which we can bank on.

    Also I know reddit is not the best source for news because it can be very similar to an echo chamber but that is where I get my news. I also use Robin Hood and I feel as if all the news articles that they send out are completely useless.

    Also, is there any kind of "market recap" channel on individual stocks trying to analyze why a stock traded the way it did throughout the day?

    Sorry for generic question but thanks in advance for answers.

    submitted by /u/dadson231
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    BofA Turns Bullish on Stocks, Commodities and Says Time to Buy

    Posted: 30 Aug 2019 07:55 AM PDT

    What has a heightened chance for greater returns in the event of a hurricane? My guess would be gas as it would be needed to run generators once power systems knock out. Possibly construction companies who go in after the fact.

    Posted: 30 Aug 2019 03:24 PM PDT

    Quick guide for all beginners asking the same questions

    Posted: 30 Aug 2019 05:14 AM PDT

    Guys, after i spent some time on this sub i noticed that there are many people asking the same questions. Below are some points for newbies that i believe will be helpful and will help some of you. Also i'll try to answer some of the most asked questions.

    ○ Don't try to time the market. Nobody actually timed the market very successfully. If you try to time the market you risk to miss big opportunities if it goes up while you wait and you don't know how long you'll need to wait. Secondly there is no way for newbies and even more advanced investors to know when the deepest dip is and to buy there. Don't even try to deceive yourself that you'll time the market and will buy the dip and you'll be the most successful newbie investor. That's one of the biggest mistakes every investor is doing. Even if by sheer luck you time the market it doesn't mean it'll do what you want it do to. Bottom line is don't keep your money waiting for the dip, you don't know how deep the dip is going to be. Try to invest smart don't try to be lucky. Dollar cost averaging is one of the best strategies for retail investor everybody can do. A good quote is "Time in the market, beats timing the market"

    ○ For all people that want to learn about investing/stocks etc. there are many sites with valuable information. See investopedia, read bloomberg/wsj/forbes/yahoo finance/the motley fool. Don't just ask i am a newbie where do i start? Just start somewhere, there are plenty of books on investing which are pretty easy to find on amazon and google. One of the books i am recommending is "Intelligent Investor" start there if you wish. With time you'll be able to find more finance news and books. The only thing all beginners can do is a simple google search.

    ○ As an inexperienced investor one of the best investment you can do is invest in index tracking ETF with low expense ratio. All questions related to "I am new where do i invest?" will have the same answer. Once you start reading more and more and get better understanding of the market/investing etc you'll begin developing own analysis on companies and you'll be able to decide where to invest.

    ○ In terms of stock brokers it depends on where you are legally residing. If you're in the US there are plenty of options, almost all banks will allow opening a brokerage account. For newbies try Robinhood (cheap trades). For non-US the options are a bit limited in EU we have Interactive Brokers/Saxo Bank/Degiro (in some countries) and also some country specific brokers which will work with other big brokers.

    Once you start reading and learning more and more things will become clearer with time. Nothing comes easy with investing you'll have gains and losses but you'll learn from them. Investing is not a short-term gain. Also remember that trading and investing are quite different in their nature.

    submitted by /u/rossenow
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    Acreage Holdings, Canopy Growth, and Jon Boehner all tied together in the future of Cannabis?

    Posted: 30 Aug 2019 02:25 PM PDT

    Acreage holdings has hit 52 weeks lows and at current levels promises three times your money IF cannabis is legalized in the US in the next 7 years. Even IF it is not - this company has perhaps the most stout board in the industry and a lot of pull in business and politics...what do u see for the future of the cannabis industry? How long do you imagine until it becomes more mainstream and starts to reach the sales/growth potential?

    submitted by /u/equalpayforwomen
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