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    Wednesday, September 4, 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: 03 Sep 2019 05:12 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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    McDonald’s is spending nearly $1 billion in 2019 to add ordering kiosks and other tech to stores.

    Posted: 03 Sep 2019 05:58 AM PDT

    https://www.cnbc.com/2019/08/29/fast-food-restaurants-in-america-are-losing-100percent-of-workers-every-year.html

    Not big news but with McDonald's moving towards automation does that increase revenue due to not having to pay people who take orders?

    I know there will have be money being spent on upkeep of the kiosks but it has to be much more profitable than paying workers right?

    Is McDonald's a buy?

    submitted by /u/tarahamble
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    What is the point of investing in bonds?

    Posted: 03 Sep 2019 06:15 PM PDT

    Disclaimer: I'm 22 years old and in no need of passive income yet and I would understand if your older. But it doesn't make sense to me to invest in bonds that get eaten up by inflation a lot of times. Why would you not just diversify a portfolio with dividend heavy index funds such as Vanguard utilities (VPU) and (VNQ) Vanguard REITs for future passive income while also being invested in the S&P 500 index fund. This is large majority of my account even though I also like to pick stocks but I really don't see the need to pick bonds. Thoughts?

    submitted by /u/Litquidity88
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    Hang Seng jumps as SCMP reports Hong Kong leader Carrie Lam plans to formally withdraw extradition bill

    Posted: 03 Sep 2019 11:36 PM PDT

    Negative Interest Rates Threaten the Financial System

    Posted: 03 Sep 2019 12:42 PM PDT

    https://www.bloomberg.com/view/articles/2019-09-03/negative-interest-rates-threaten-the-financial-system

    Curious to hear r/investing's thoughts. What unintended consequences may negative interest rates be causing?

    submitted by /u/greeegsays
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    Is real estate the way to go?

    Posted: 03 Sep 2019 08:05 PM PDT

    Hi! From what I've read online, real estate seems to be one of the best way to create wealth. I don't know if this is even attainable for me in the near future or even if this is the best investment to make. So I have a few question if any of you guys are knowledgeable in this field.

    What do you guys think about real estate? About how much should I be expected to put in a down payment? How much interest can I expect by buying a 200k home/appartment? Would I be able to buy a property at about age 20 if I have the required funds? Do you think another type of investment would be better than real estate and why?

    Im 18 with 8k saved up and plan to save a lot more in the next years.

    I know nothing about real estate, I am thankful for any help on this matter :)

    submitted by /u/AwareIndustry
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    ISM Manufacturing PMI hits 49.1%, officially contracting

    Posted: 03 Sep 2019 08:54 AM PDT

    Link to the report: https://www.instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1

    If anyone was wondering why the market dipped again after 10AM here's why. Trade policy concerns and supply chain impacts are being cited as some of the largest reasons for slowing orders and leaner inventories. This is one of the indicators the FOMC is going to be looking at when they make their next rate decision and this is the first time this particular indicator has been in contraction territory in years.

    submitted by /u/ObservationalHumor
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    RBC Capital: Amazon shares will rally nearly 50% as one-day Prime shipping rolls out, target price of $2600 (currently $1789)

    Posted: 03 Sep 2019 05:22 PM PDT

    https://www.cnbc.com/2019/09/03/rbc-amazon-shares-to-rally-nearly-50percent-with-one-day-prime-shipping.html

    Fairly optimistic to say the least with regards to its share price. Prime users seem to be reaching maximum capacity and I don't see a ton of more adoption from people who think Amazon takes too long to deliver things now.

    submitted by /u/pikindaguy
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    What's the Berkshire of Europe?

    Posted: 04 Sep 2019 02:45 AM PDT

    Any comparable companies like Berkshire but in a European country? I was thinking of Allianz in Germany but i don't think they are as diversified as Berkshire.

    Comparable in terms of diversified holdings.

    Edit: Clarified based on comment from /u/DogfaceDino

    submitted by /u/gymaliz
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    Am 21 and have 3k to invest, thoughts on this portfolio I've put together?

    Posted: 04 Sep 2019 01:39 AM PDT

    Here it is

    I'm 21 and looking to grow this money long-term. I intentionally made it tech heavy despite the risk of Tariffs Man because I feel that's where the money will be long term. My thoughts putting this together are:

    • Walmart and Gold are recession defense. These are the only ones Ive bought so far

    • KRMA and XLY are diversified ETFs that have both performed well historically (unfortunately KRMA is fairly new)

    • Microsoft= long term big money unless the world ends

    • PSJ should be a solid earner, historically has outperformed the tech sector average

    • AMD has had meteoric growth. Its risky and the tariffs will hurt, but their new cpus and video cards have been extremely well recieved

    • SPAR has an earnings report coming up and according to Schwab's estimate its supposed to be great. PLus since they make specialty cars like ambulances there will always be a market. Probably won't have long term though.

    Thoughts? Can anything be swapped with a similar but historically better performing one? Should I wait a day or two in the (imo) likely event tariffs lower the prices a bit? All feedback advice is appreciated, thanks.

    submitted by /u/Personfour
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    could negative yields be a sign of inflation to come?

    Posted: 03 Sep 2019 03:50 PM PDT

    If the main driver of negative yields is forced buying by pension funds who are required to hold bonds and not cash, doesn't this mean there is an excess of money in the system? Excess savings? Eventually this excess money will spread throughout the economy causing a great inflation.

    submitted by /u/BluechipCollector
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    Is there a self-fulfilling prophecy where people think that tariffs will negatively affect the economy, and as a result engage less in economic activity--which leads to less economic activity?

    Posted: 03 Sep 2019 07:31 PM PDT

    What happened to Moneygram (MGI)?

    Posted: 03 Sep 2019 11:06 PM PDT

    Hey everyone! i'm new to the word of investing and need some help understanding the pricing of shares for MGI. I was looking through their charts and noticed an absolutely massive drop in their share prices since 2007, a quick search shows that their stock was hovering around the $250 range late 2006 but has had a massive fall to around $2.50 this year. What i would like to know is why did Moneygram experience such a seemingly massive drop in price? And why have they not been able to come close to recovering since 2008?

    Their competitor Western union's share prices do not appear to have been affected by the 07-08 financial crises. Is the massive drop in price due to MGI issuing more stock, and thus a massive difference in the apparent value of each individual share? or does it boil down to factors such as financial trouble/mismanagement/future outlook? And is there a possibility of their share prices returning to what they once were? I'd appreciate all thoughts/input. Thank you.

    submitted by /u/bigfootsleftnut
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    Factor investing - Looking for a certain white paper on 'value factor'

    Posted: 03 Sep 2019 09:44 PM PDT

    Turning to the wisdom of the crowd for help: I remember reading a paper couple years ago that talked about the presence of growth or beta in naive value factor or value-tilted indexes. But alas I can't seem remember where I read it, could have a CFA blog or a white paper from an asset manager.

    Has anyone come across a paper on such a topic?

    submitted by /u/TheShahShank
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    Trading in Mexico

    Posted: 03 Sep 2019 10:46 AM PDT

    Hi all - I currently live/work in Mexico (I´m Canadian but have residency in Mexico). I was trading in Canada in my RRSP and TFSA; however, I have emptied them out. Just wondering if anyone has experience using a Mexican platform to trade with here in Mexico?

    submitted by /u/Steve2398132
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    [Help] Stock bought on etrade, no longer listed.

    Posted: 03 Sep 2019 02:41 PM PDT

    Hello, I'm pretty new to trading so excuse any miseducation or lack of knowledge. I bought shares of a company on Etrade but it now trades OTCQB and so is no longer listed.

    How can I claim ownership of my shares if they are no longer on etrade. Should I go through the company or etrade? What should I know and what steps should I take?

    Thanks for your help.

    submitted by /u/Dieforthehive
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    How is a stock price determined to be overvalued or undervalued like in Yahoo finance, and what is logic with expert analyst recommending buy for overvalued stock ?

    Posted: 03 Sep 2019 07:30 AM PDT

    are weak catalysts, even catalysts at all?

    Posted: 03 Sep 2019 12:22 PM PDT

    I'm trying to devise a good definition of a financial catalyst. To my understanding, (correct me if I'm wrong) a strong catalyst is an event that WILL occur on a specific date, for example, a contract a supplier has from the government that will take place in 3 months.

    But how about weak catalysts, for example, Though not certain, we believe so-and-so company will hire a new CEO by the end of the year because of XYZ. or we believe the courts will determine this company did not mislead investors and the conclusion will be on this date because XYZ.

    What I'm asking is, if there's no exact date of when an event will occur (maybe you have an educated) and/or what the event will determine (the company did or did not mislead investors) should it even be a catalyst to begin with?

    submitted by /u/TheJ0urneyman
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    Any books you would recommend, that discusses the role of AI in the stock market

    Posted: 03 Sep 2019 05:49 PM PDT

    thanks 🙂

    submitted by /u/AugustsOnlySon
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    Structuring an endowment portfolio for non-profit organization that appeals to all stake-holders.

    Posted: 03 Sep 2019 08:50 AM PDT

    Greetings all,

    Recently accepted an appointment to an executive/finance committee on a board of directors for a regional non-profit. There is an existing endowment fund (low eight-figures) and a new executive director and incoming board president and they want to move the endowment to a new advisor and custodian. I was tasked to take a look and make some recommendations.

    The portfolio is overly complex, in my opinion, AUM fees are in excess of 1.25% in addition to front load funds and actively managed funds. There's about 12 actively managed funds in the endowment fund in addition to over 40 individual stock tickers, 5 ETFs, and a bunch of bond and CD ladders. If I didn't know any better I would guess that the fund and stock selections are window dressing. Asset allocation for the endowment are something along the lines of 50/40/10. Performance is ok, but fees and expenses of around 2.5% are really dragging down performance when you look at it from a 5-year or 10-year timeline.

    I proposed moving to a lower cost firm that could offer 0.3% AUM (based on available information online) and simplifying the portfolio to a lazy portfolio. My initial recommendations included a 3-fund, 4-fund and 5-fund portfolio. I did enough backtesting with the current endowment and my 3 proposed allocations to show that we could easily match the performance before fees in addition to pocketing another 1.5 - 2% year over year from reduced expenses by using index funds and having access to institutional shares. Also the new setup would easily fulfill the mandate of generating 5% returns without having to draw down the principal using a three-year rolling average to help model cash outflows and inflows.

    When I presented my findings, I was told by several board members that my portfolio for the endowment wasn't sophisticated enough and that I must have been missing out on something crucial.

    I was asked to work with some other board members, who are accredited investors, to come up with a more sophisticated asset allocations to "maximize upward potential but maintain capital preservation" and also look at some other firms that can provide exclusive advice and guidance. We've done one working session so far but it's left me a bit concerned. Suggestions from the session included cryptocurrency, hedge funds, private equity, VIX funds, holding physical gold in the main office, and buying up vacant property around HQ. I guess the word is out on the street because we are also getting inundated with offers for lunch or dinner with various advisory firms, banks, and wealth managers.

    As a compromise, I'm hoping to construct a portfolio that's 90% lazy (using David Swensen Yale portfolio as a baseline) and maybe window dress the remaining 10% with individual holdings and exotic ETFs to placate other internal stakeholders. Also I want to figure out a way to construct an endowment, or revise the bylaws governing the endowment, that's a bit more insulated from leadership changes or advisors. There's effectively a new board of directors every four years at the organization and this would have been the 4th time in 20 years that the endowment has been reconstructed.

    I was looking to see if anyone here has had experience setting up an endowment or legacy fund for a non-profit and what strategies or tactics did they find successful to build consensus and more importantly survive the turnover within the leadership of the organization. I feel like I really underestimated the "people" aspect of endowment investing.

    P.S. the advisor emailed me and some other board members in a panic offering to take us out to lunch and reminding us he moved us to cash during the last 2 market pullbacks. He is also emailing former board members that rolled off to see what the deal was with me, and the new leadership in general.

    submitted by /u/risk_parity
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    Opinion on medtech investments

    Posted: 03 Sep 2019 01:47 PM PDT

    I feel like the medtech investments space (particularly small business/early stage studies/phases/no revenue/profit) is such a jungle, filled with a lot of crappy opportunities, which is the reason for why I'm not investing in that industry.

    I also feel like there are a lot of uneducated amateurs investing in that space, pretending to know what they're doing (based on discussion from e.g. stock investing groups on Facebook, where people pretends to be medtech experts, while they haven't even gone to college).

    What's your opinion on early stage medtech investments?

    submitted by /u/borjadja
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