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.
- Tesla tops Wall Street estimates with a record 112,000 vehicle deliveries in fourth quarter
- Is there any good ELI5 resources on PUTS, SHORTS, & CALLS?
- Electric Cars Threaten the Heart of Germany’s Economy
- The average sales price for Manhattan real estate fell 7.5% in fourth quarter - CNBC
- Do you actually TRADE or do you mostly just hold?
- How did you learn about stock trading or even day trading?
- Now that Vanguard charges no fees (though it was already no fees for some part), what's your choice of a platform? Vanguard, Schwab, or Ally?
- What are your opinions about position trading forex ?
- Wondering where I can get the data behind this? Best/worst performing S&P 500 stocks.
- Is now the time to buy Canopy Growth (CGC)?
- Opinionated Guide to Investing
- Applying Mandelbrot Fractals to Stocks/Finance
- My 401k removed index funds options and is now mostly actively managed, which they suggest will outperform the index. Opinions?
- Help with margin questions
- Why there is not more coverage of QE4?
- Do consulting companies invest their money?
- Looking for investment books regarding risk management. Old or new, but relevant to this time.
- Should I hold on NextEra Energy? I'm losing confidence.
- A New Decade. Any Predictions?
- Why do S&P 500 ETFs have different dividend yields?
- How do you keep track of your portfolio?
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 03 Jan 2020 04:12 AM PST 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:
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! [link] [comments]  |
| Tesla tops Wall Street estimates with a record 112,000 vehicle deliveries in fourth quarter Posted: 03 Jan 2020 07:14 AM PST
[link] [comments]  |
| Is there any good ELI5 resources on PUTS, SHORTS, & CALLS? Posted: 03 Jan 2020 08:03 PM PST |
| Electric Cars Threaten the Heart of Germany’s Economy Posted: 03 Jan 2020 11:47 AM PST Germany relies heavily on internal combustion engine cars for its economy. Three of the top 5 companies in Germany are (primarily gas) automakers. While USA auto-maker Tesla started out with electric, we can see from unionized ICE auto-makers in the US, slowing the transition to electric cars is a major priority of unions. Simply put to be competitive in the electric car market it requires a lot less workers and lower wages. Electric cars are just simpler mechanically and require less work to build. Historically Germany's unions have been adept at reading market conditions and working to create competitive vehicles rather than just maximize wages. Will union pressure prevent German automakers from competing with companies like Tesla, Rivian, or asian startups? Will pivoting from gas to electric be an easy task for them even if we take away the pressure of unions? [link] [comments]  |
| The average sales price for Manhattan real estate fell 7.5% in fourth quarter - CNBC Posted: 03 Jan 2020 11:34 AM PST https://www.cnbc.com/2020/01/03/sales-of-manhattans-priciest-apartments-plunge-almost-40percent.html "The average sales price for Manhattan real estate fell 7.5% to $1.8 million in the fourth quarter of 2019, according to a report from Douglas Elliman and Miller Samuel. The median sales price fell below $1 million. Total sales were down, discounts were up, and there is now an eight-month supply of unsold apartments." https://fred.stlouisfed.org/series/MSPUS Median house sale value looks to still be trending down nationwide too, but no 4th quarter number son FRED yet. With stocks booming again and rates discounted several times last year to near historic lows again one would have hoped those on the sidelines in 2018 would have jumped in by now but it seems any boost from low mortgage rates in Q2 2019 was short lived and the downtrend from a peak in Q4 2017 continues. Thoughts? [link] [comments]  |
| Do you actually TRADE or do you mostly just hold? Posted: 03 Jan 2020 06:58 PM PST I've been investing with Betterment for a few years and it's been working well. I automatically add to it monthly and I'm happy with the returns. Still, I finally decided I should have an individual stock portfolio as well. I bought $SQ and $ATVI, which are two companies that I believe in and want to hold long term. But how do you manage trading as well? How often do you guys often hold stocks for? I plan to keep the above two for a while but I'm not opposed to shorter term holds for other stocks. I'm familiar with markets, valuation metrics, and some light TA, so I'm not new to the industry itself, I've just never held and traded individual stocks before. I'd be interested in any thoughts. Thanks [link] [comments]  |
| How did you learn about stock trading or even day trading? Posted: 03 Jan 2020 06:28 PM PST I read one of the answers which was posted 3 years ago and was wondering if someone did anything different and has new ways I want to learn about how to trade stocks for short or long term irrespective (including day trading). There are all these words on website about various stocks p/e or moat etc which doesnt make sense to me even if I read about it (I didnt do a lot of reading clearly). So I was wondering if there was any course or videos which you used to learn more about trading. I have some savings which I do invest but its pretty mindless (tips from friends and colleagues but I want to be more aware and also possibly make more money than what I am. Any tips or suggestions are welcome! [link] [comments]  |
| Posted: 04 Jan 2020 12:03 AM PST With the competition getting stiff these days, I'm having a hard time deciding between the three with a casual Robinhood on the side. Some of the comparisons or information in general online are outdated these days, so I'm asking for help here. [link] [comments]  |
| What are your opinions about position trading forex ? Posted: 04 Jan 2020 03:03 AM PST |
| Wondering where I can get the data behind this? Best/worst performing S&P 500 stocks. Posted: 03 Jan 2020 11:10 PM PST |
| Is now the time to buy Canopy Growth (CGC)? Posted: 03 Jan 2020 12:50 PM PST I like the cannabis market as a whole. It's clear that it's not becoming less legal anytime soon...we will only see more and more states and countries legalizing it as the years go on and there's proven to be a huge market for it. Was bullish on CGC last year but got out (complete luck) right before the downturn and loss of their CEO. They are the largest cannabis company in the world right now. They have a new, finance minded CEO from constellation. Constellation (STZ) isn't backing down on their investment and is (for now) sticking behind them. My hope is that the new leadership can make smart financial decisions and navigate this tricky growth phase. Stock is down more than double from its highs of last year, and is leveling out around $20 for the last month or so...is the bad news baked into the price? Is now the time to jump? [link] [comments]  |
| Opinionated Guide to Investing Posted: 03 Jan 2020 10:56 PM PST An investing guide I made for some of my friends. Building a Balanced Portfolio Stock vs Bonds Bonds: Fixed interest rate, plus repayment of initial investment after a fixed period. Stocks: Partial ownership of a company. Bonds are issued by both companies and governments. When you hear the government is $23 trillion in debt, it means it issued $23 trillion in bonds it has to pay back. Advantages of bonds: -Safety. Fixed rate of return. Treasury bonds have historically averaged 5-6% return.-Advantage in bankruptcy. When a company goes bankrupt bondholders have priority over stockholders. Typically in bankruptcy a new company gets created, where existing stockholders are wiped out and bondholders are issued shares in the new company.-Perform well during recessions. Treasury bonds gained 20% during the 2008 crash: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html Advantages of stocks: -Voting rights. Stockholders get to vote on board of directors. -Ownership of all profits after bondholders are paid. Profits are returned through dividends. Sometimes for tax reasons companies also return money by buying back stock, which raises the stock price. -Historically have a higher rate of return (average of 9% annually since 1980). It's safest to own both stocks and bonds! Suppose you were of retirement age in 2007 with $2 million in savings. When the market dropped > 50% (Dow went from about 14,400 to 6,700) you would be very tempted to sell at the bottom. If instead you owned half bonds and half stocks, your bonds would have gained in value by 20%, which means your overall portfolio would only have dropped by 15%. More importantly, you would be able to sell your bonds and buy stocks when the market was at its lowest. A good rule of thumb is to always own half stocks and half bonds, and to rebalance your portfolio back to 50/50 at a specific date each year. This will force you to sell stocks when they are high and buy them when they're low. If you're younger you may prefer a slightly riskier portfolio with more stocks and less bonds, and older people closer to retirement are often advised to hold a higher proportion of bonds. Diversification: Not putting all your eggs in one basket. Takes the stress out of investing, which means you make better decisions. Mutual Funds vs ETFs Mutual Fund: Professional money managers that invest for you, usually for a 2% annual fee. Never invest in a mutual fund if you can help it! That 2% fee will compound to 50% over a 20 year period. Mutual funds have been shown to consistently underperform the market. ETF: Exchange traded fund. A basket of stocks or bonds. ETFs charge much lower fees than mutual funds. Example etfs: SPY: An ETF that mirrors the average performance or the top 500 traded US stocks. Expense ratio is 0.1% annually. GOVT: Tracks US government bonds, with an expense ratio of 0.15% annually. Simple Investment plan If you want a stress-free investment plan that tracks the overall market, open up an account somewhere (I use Fidelity) and put half your money in SPY and half of it in GOVT. Be sure to set up a calendar event each year to remind yourself to rebalance between these two. Valuing Stocks For most people, trying to pick winning stocks is a poor use of time versus buying an ETF. Most stocks have been closely scrutinized by an army of professional stock analysts who usually have done more research than we are willing to do. On the other hand, picking stocks can be a lot of fun! Take Ford as an example. I crossed out the chart and the stock price because I think it's more important to look at a company's financials. A company can still be relatively cheap even after it has gone up significantly, or expensive even though it has dropped. Stock Price: Cost per share. Means absolutely nothing, since the number of shares issued is arbitrary. Market Cap: The cost of buying all the shares in the company. Dividend Yield: Annual return on investment from dividend payments. P/E Ratio: Price to Earnings ratio. Specifically, it is market cap divided by last year's net income (i.e. profit). Intuitively, if you bought the whole company, it is the number of years of profit you would need to receive until your investment paid for itself. P/E ratio is the most important metric to consider. Historically 15 was an average P/E ratio for a company, although today 20 is average. See https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart Growth Companies A company is considered a "growth company" if it has a history of growing rapidly (say > 20% a year). Investors are willing to pay more for growth companies because they expect income to continue growing. Typically, investors may be willing to buy a company at a P/E ratio of 30-40 if it has a solid prospects of future growth. For an example of a growth company, check out Twilio's financials on Yahoo finance: Twilio is a giant money pit: It lost $263 million in the last 12 months! However, it's revenues have increased by 50% every year, so investors are willing to pay a fortune for it: (Note there is no P/E ratio, since earnings are negative). The takeaway is that investors are willing to pay $14 billion for a company that loses $263 million a year on $1 billion in revenue. This is only because their revenue has increased 50% for the past several years (and Twilio is a tech stock, which tend to be overpriced). When evaluating a stock like this, consider what the company would have to do in the next five years to justify this valuation. For Twilio to have a P/E ratio of 30 (which would be normal for a tech stock), it will need to make $500 million a year within five years. Furthermore, if you buy a stock like this you don't expect it to simply justify its valuation but to double in value, which means investors are expecting it to make $1 billion a year in profits within the next five years. This would require Twilio to both turn its profit margin from -25% to something healthy like 20%, and then to increase its sales from $1 billion to $5 billion. High priced-in expectations like this make growth companies like Twilio very risky. Personally, I avoid growth companies. Value Companies Companies that are selling at a discount, usually because they aren't growing rapidly. Although the business may be in trouble, the stock is being sold cheap enough that it may be safer to purchase than a growth company. Take a look at the department store Macy's, which has scared investors off since retail is in decline: Notice that revenue has declined about 6% over the past 4 years, and net income has held steady. Also notice that profit margin is only about 4%, which means it would only take a small drop in fortune for net income to become negative. Were that to happen, would this company pose a bankruptcy risk? Let's check out the balance sheet: Macy's only has $4.6 Billion in debt, which isn't too high compared to $26 Billion in sales and $1 Billion annual profit. In summary, Macy's is facing slightly declining sales but has consistent profit, and has low debt. There appears to be little bankruptcy risk over the next several years, even though revenue is declining. The company is selling at a P/E ratio of 5, compared to the market average of 20! This means if you bought the company at its current price (5.1 Billion) you would make back your investment in 5 years. The company is also paying out a 9% dividend. Even if you expect Macy's to continue to decline in revenue, you can make a strong case that this is a good investment based on the low P/E ratio. Even if retail continues to decline, Macy's should, (to some extent) be able to keep a positive profit margin by closing down unprofitable stores and leaving the profitable ones open. Key Takeaways: -Picking your own stocks is riskier, more time-consuming and stressful than buying a basket of stocks (an ETF). I only do it because I enjoy it. -Keep an even balance between stocks and bonds. -Prefer ETFs to mutual funds. -Stock price is an arbitrary number, since companies have different numbers of shares outstanding. A stock priced at $10 could have a higher market cap than another stock priced at $100. -When valuing a company, P/E ratio is a critical number. Growth companies demand P/E ratios, value companies have lower ratios. Currently the average P/E ratio for a stock is 20. -Ignore stock market news. These days the stock market goes up and down because of algorithmic trading, not because of the reasons financial reporters talk about. [link] [comments]  |
| Applying Mandelbrot Fractals to Stocks/Finance Posted: 03 Jan 2020 07:07 PM PST Recently read the Benoit Mandelbrot book "The Misbehavior of Markets". The concepts make sense, however, it has been a long time since I've been in a geometry or other higher mathematics class. Is there any good resource that can teach one how to apply this concept to developing price ranges to possibly trade certain markets similar to what Hedgeye accomplishes? [link] [comments]  |
| Posted: 03 Jan 2020 01:40 PM PST My 401k previously had an index fund choice for all categories but and has now switched to actively managed for everything other than large caps. Their reasoning is this:
The research paper they quote does suggest this, but the paper is extremely vague and there's no methodology included. I've been heavily influenced by and follow Jack Bogle's investment philosophies, so I have a really hard time believing that an actively managed funds will beat an index in any category. My current situation is this: I have my 401k using a target date fund and IRA's with a 4 Vanguard ETF portfolio (VTI/VXUS in Roth and BND/BNDX in Traditional). The new actively managed target date fund is charging .3% fees and my IRA ETF's run average about 0.06%. I have the ability to convert my 401K to a PCRA and create the same ETF portfolio with the vast majority of my funds. My question are these: Is it BS that these actively managed funds can outperform an index? Would be worth self-managing my 401k for the fee break alone? Thanks [link] [comments]  |
| Posted: 03 Jan 2020 07:33 PM PST I have very little cash but I am consistent. I want to trade with $10,000 and lock in profit at 1% daily. I'm aware of the PDT rule. Webull lets you take out 4X day trading margin, so my plan is to save up $2,500 and take margin on the other $7,500. Webull charges 7% for margin interest, my question is how is that calculated? Is it 7% of my profit? Is it 7% of $7,500? If I take out $7,500 every day am I going to get charged $525 interest every day I take out the margin? [link] [comments]  |
| Why there is not more coverage of QE4? Posted: 04 Jan 2020 01:11 AM PST Help me understand, should not we all go leverage to the max and buy calls? FED is basically pumping money into the system non-stop. I only saw Kaplan talking about it more explicitly but even then he points out that it will cause debate and he only wants to slow the growth, not actually reduce it. Please do not start with this is not QE debate. Is not the effect to the market the same? If so, I don't care what you really call it. Links to get more background; [link] [comments]  |
| Do consulting companies invest their money? Posted: 04 Jan 2020 12:24 AM PST I have heard McKinsey has some other offshore company where they hold their investments and also if clients do not have enough money they can instead give their stock. Thoughts? [link] [comments]  |
| Looking for investment books regarding risk management. Old or new, but relevant to this time. Posted: 03 Jan 2020 08:08 PM PST |
| Should I hold on NextEra Energy? I'm losing confidence. Posted: 03 Jan 2020 07:41 PM PST when i bought at 234 it was great, but after hitting all time high of 243, its basically been downhill.. not sure if i should stay the course or flee before it gets worse :/ [link] [comments]  |
| A New Decade. Any Predictions? Posted: 03 Jan 2020 11:24 PM PST So on HN they did a question about people predicting new trends/technology/events that would occur in the upcoming decade. Here is the original question which was asked at the beginning of 2010 for the 2010-2019 decade. https://news.ycombinator.com/item?id=1025681 Here is the question which has people predicting what will happen this decade, 2020-2029: https://news.ycombinator.com/item?id=21941278 Since trends are such a big part of investing. I figured some here would find it interesting. [link] [comments]  |
| Why do S&P 500 ETFs have different dividend yields? Posted: 03 Jan 2020 01:38 PM PST For example VOO (1.85) and SPY (1.75) have different div/yields. Also why wouldn't you just invest in the higher one? [link] [comments]  |
| How do you keep track of your portfolio? Posted: 03 Jan 2020 07:28 PM PST Does everyone have their own excel sheet to keep tabs on which investments are doing well and how the whole portfolio is going? Or is there a good website to do this (and ideally for more than just equities as well)? [link] [comments]  |
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