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.
- BBB-rated corporate bonds are the Achilles' heel of the global economy
- Stimulus-package tax relief: Withdraw $100K from your IRA
- Mortgage Bankers Ask SEC to Save Them From Wave of Margin Calls
- Oil is now under $20 a barrel. This obviously is temporary. How would I invest in this long-term?
- Mortgage bankers warn Fed mortgage purchases unbalanced market, forcing margin calls
- Has the market priced in 1 million Covid-19 cases in the US in 2 or 3 weeks? It seems to me to be pretty much guaranteed given the trend line.
- How long will the Covid-19 affect the markets? How should everyday investors react?
- Warren Buffett
- Futures reverse to turn positive as investors brace for another volatile week
- General sentiment here (individual investors) seems that we have not reached the bottom yet. Is that mean the market rally last week was largely driven by institutional investors? Is there a way to figure out?
- Weekend Dow(UNOFFICIAL) currently down ~200 points, approximately 1 hour until open of futures
- Why does Warren Buffet love Coca-Cola KO?
- Bloomberg Terminal Free Alternatives
- What does it mean when a stock has a low P/E ratio, like 6.9, and a high EPS, like 129? I’m specifically looking at MKL and those numbers seems disproportionate. Can someone ELI5?
- Why is paying tax later better than now?
- What is the point of buying physical gold as a hedge for inflation?
- What's the best way to hedge against inflation?
- The overwhelming consensus in this subreddit (and others) is that we're far from the bottom. Question for all those that think that: are you currently shorting the market? Is not, why not?
- Economy not as strong as it seemed
- Market futures versus day end
- Post Covid 19 trade war?
- Commercial Real Estate Investments
- Market reaction on jobless claims record
- Recommendations for Investment Math Problem Books
- mREITs are on sale now
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 29 Mar 2020 05:13 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:
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]  |
| BBB-rated corporate bonds are the Achilles' heel of the global economy Posted: 29 Mar 2020 10:22 AM PDT One of the most concerning aspects of the current market crisis is this chart. Almost half of the investment-grade corporate debt is BBB-rated and just one step over the non-investment grade. Coronavirus was an unexpected event that shook the markets and triggered huge sell-off and dislocations, however, the actual effects of the slow-down are yet to come. Once BBB-rated corporate bonds start losing their investment-grade status, liquidity will dry up for these guys. [link] [comments]  |
| Stimulus-package tax relief: Withdraw $100K from your IRA Posted: 29 Mar 2020 04:14 PM PDT Thoughts on this? "IRA owners who are adversely affected by the coronavirus pandemic (and there will be plenty of them) will be eligible to take tax-favored coronavirus-related distributions from their IRAs. To keep things simple, let's call these distributions CVDs. They can add up to as much as $100,000. You can recontribute a CVD back into your IRA within three years of the withdrawal date and treat the withdrawal and later recontribution as a totally tax-free rollover." "In effect, the CVD drill allows you to borrow up to $100,000 from your IRA(s) and repay the amount(s) any time up to three years later with no federal income tax consequences. And there are no limitations on what you can use CVD funds for during the three-year period." [link] [comments]  |
| Mortgage Bankers Ask SEC to Save Them From Wave of Margin Calls Posted: 29 Mar 2020 07:45 PM PDT Not sure if links are allowed, but I thought this was an interesting article. [link] [comments]  |
| Oil is now under $20 a barrel. This obviously is temporary. How would I invest in this long-term? Posted: 29 Mar 2020 11:51 PM PDT Crude hit $19.92 a barrel in the US just now. Like in 2015, this price crash is an obvious temporary reaction to a perfect storm, and crude obviously isn't going to stay at historic lows for long. What I'm asking is; 1) How is it so long, when the long term value of oil is profoundly unlikely to be permanently damaged 2) If it is indeed rational to invest in Oil long-term at this price, how do I do so? I am UK based if that helps. See article for more details (apologies for the paywall) [link] [comments]  |
| Mortgage bankers warn Fed mortgage purchases unbalanced market, forcing margin calls Posted: 29 Mar 2020 10:30 PM PDT Unintended consequences from the Fed buying $250 billion in mortgage backed securities over the last two weeks. Seems like even the trade group, Mortgage Bankers Association, may have initially overlooked this. [link] [comments]  |
| Posted: 29 Mar 2020 04:29 PM PDT It's going up 10 times every 8 days or so. And now it's getting a foot hold in all sorts of new huge cities like Chicago. How stupid is it for me to sell my entire Roth IRA and put in a limit order for 10% less (s&p index) [link] [comments]  |
| How long will the Covid-19 affect the markets? How should everyday investors react? Posted: 29 Mar 2020 07:10 AM PDT Let's see how the current environment looks like. Here are some uncertainties that govern investors' reactions over the past 50 days:
A few facts about the virus:
Now, a few economic facts and hard data:
The Covid-19 effect: Now, it is important to clarify that Coronavirus will not disappear overnight. It will be a long and gradual process lasting 3–6 months. I am afraid the worse is yet to come for markets across the world. The detrimental effects in the real economy are becoming more obvious day by day and translated into spikes in unemployment, mortgage payment delays, lack of liquidity and financing for SMEs, cuts in Capex and supplies, and lastly corporate and personal defaults. This is a self-feeding loop probably leading to what economists describe as secular stagnation. The Central Banks were not ready to face such a crisis. Rates were extremely low already and their balance sheets were already loaded with a lot of public and corporate debt. Another stimulus plan may be the only solution now, but it is not sustainable in the long run. My opinion is that markets will remain into bearish territory for many months after the "end of Covid-19". What can ordinary investors do to prepare?
Summary: These are hard times for the markets and events that are unprecedented for our generation. It is and will be tough, but the best we can do is be prepared both for the virus (social distancing & healthy routine) and for our long-run financial plan. [link] [comments]  |
| Posted: 30 Mar 2020 12:44 AM PDT Was extremely successful throughout the 60s and 70s, but it took the 80s and later decades to truly launch his wealth to the stratosphere. Why? My take: He was a beneficiary of the gradual financialization of the economy. After the 70s, financial markets became the most important gauge of economic health and wealth. Thus, those who were well positioned within that industry gained tremendously. The Dow and S&P were always an afterthought to inflation and unemployment in past time. from the 80s on, they had to be saved at all cost. Meanwhile, we lost most of our industries and slid competitively with the world. Remember, Berkshire is mostly invested in Finance and insurances. What is your take on Buffett wealth? [link] [comments]  |
| Futures reverse to turn positive as investors brace for another volatile week Posted: 29 Mar 2020 11:14 PM PDT https://www.cnbc.com/2020/03/29/stock-market-futures-open-to-close-news.html U. S. stock futures turned around early Monday morning and edged higher in volatile trading after last week's sharp gains, even as the number of coronavirus cases in the U.S. continues to rise at an alarming rate. Earlier, futures had pointed to an implied opening drop of more than 300 points for the Dow. At around 1:00 a.m. ET, Dow Jones Industrial Average futures were up 132 points, pointing to an implied rise of about 59 points at the Monday open. S&P 500 futures and Nasdaq 100 futures also pointed to a slightly higher opening for Monday. The moves came as crude prices fell sharply. The Dow last week posted its biggest weekly gain since 1938, surging more than 12%. The S&P 500 and Nasdaq are coming off their best week since 2009, after rising 10.3% and 9.1%, respectively. To be sure, it was a volatile ride for investors. The S&P 500 posted daily swings of at least 2.9% in four of the five sessions. That includes a 3.4% drop on Friday for the S&P 500. CH 20200326 Stock market wild swings 10am.png The sharp gains last week were sparked in part by the prospect of massive fiscal and monetary stimulus. President Donald Trump signed into law Friday a $2 trillion stimulus package that includes direct payments to curb the economic blow from the outbreak. The Federal Reserve also launched a series of measures to sustain the economy, including an open-ended asset-purchase program. "Bulls staged an epic comeback," said Ken Berman, strategist at Gorilla Trades. "Despite the rally … the uncertainty regarding the length of the necessary, but economically damaging global lockdowns continues to weigh on risk assets." "The technical picture continues to be bearish across the board, despite the mid-week surge in stocks, with all of the key trend indicators still pointing lower," said Berman, noting the major averages are still below their respective moving-day averages even after last week's strong gains. Coronavirus cases around the world are still climbing, adding to the uncertainty over when lockdown and quarantine measures will be removed and the economy can return to normal. Data compiled by Johns Hopkins University shows more than 713,000 coronavirus cases have been confirmed globally. The U.S. overtook Italy and China last week as the country with the most cases with over 136,000. Nearly half of all U.S. cases come from New York, where more than 59,000 people have been infected. "Equity markets are overextended, but face a bumpy period of even grimmer virus news and poor economic statistics in the next 1-2 months," strategists at MRB Partners wrote in a note. "The world is now entering a third phase, the first being the shock of an out-of-control virus spreading around the globe, then the massive policy response, and now the economic fallout phase has arrived and will test investors' very fragile confidence." Investors got a glimpse of the virus' economic impact last week. On Thursday, the Labor Department reported a record 3.28 million workers filed for unemployment benefits the week of March 20. That number easily topped the previous record of 695,000 set in 1982. U.S. consumer sentiment also fell to its lowest level in more than three years. To be sure, the market has also flashed some signals of a potential bottom. The confidence spread between the so-called smart money — large institutions — and dumb money, retail investors, sits squarely in positive territory after dropping to extremely low levels. Meanwhile, insider buying reached an 11-year high. President Donald Trump also extended at a news conference Sunday the national social distancing guidelines to April 30 and said the death rate would peak in two weeks. Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world. [link] [comments]  |
| Posted: 29 Mar 2020 08:39 PM PDT |
| Weekend Dow(UNOFFICIAL) currently down ~200 points, approximately 1 hour until open of futures Posted: 29 Mar 2020 02:08 PM PDT Just FYI. The past week has taught me, as a new member, that this sub's prediction success rate is as high as flipping a coin, so no predictions, please. [link] [comments]  |
| Why does Warren Buffet love Coca-Cola KO? Posted: 29 Mar 2020 10:41 AM PDT The growth isn't that impressive. I'm unfamiliar with how to calculate dividends into decisions but it seems the dividend yield is 3.70% which doesn't seem high to me. I know I'm wrong and am a noob but would love to know why I'm wrong. Thanks! [link] [comments]  |
| Bloomberg Terminal Free Alternatives Posted: 29 Mar 2020 08:27 PM PDT In this time of limited access to Bloomberg terminals while working from home, I've found Koyfin and Atom Finance to be really useful in getting company financial data. They definitely don't have the full functionality of a BBG terminal, but it gets pretty good stuff and is free at the moment! [link] [comments]  |
| Posted: 29 Mar 2020 05:44 PM PDT |
| Why is paying tax later better than now? Posted: 30 Mar 2020 01:01 AM PDT "The archetypal wonderful company—think See's Candies—grows with minimal incremental reinvestment, compounding the intrinsic value at a high rate while paying out most earnings. Provided that the business continues to earn returns in excess of the required rate of return and sustain its competitive advantage, investors are rewarded for holding wonderful companies for long periods or, as Buffett quips, "[W]hen we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever." This allows the investment to compound without paying capital gains tax and is one of the main reasons that wonderful companies appear to be such attractive investment opportunities." This reminds me of the advice to look for stocks that gives low dividends because once its paid out gains taxes must be paid, and this is thus undesirable because it takes the decision of " when to pay tax" away from the investor. I imagine one of the reasons is expectations of a lower tax future. Other reasons might be: how earnings turned into dividends are not used for reinvestment/research, how dividends might inflate the stock price and the reverse and from behavioral : how abundance of capital create inefficiencies;it makes management less careful with expenditures, etc. But in practice, do any of these factors matter? [link] [comments]  |
| What is the point of buying physical gold as a hedge for inflation? Posted: 29 Mar 2020 04:10 PM PDT It just seems to be so illiquid and difficult to keep safe, and I can't see how it can be "cashed out" effectively. Say you buy what is today 25,000 USD worth of gold in bars or coins or whatever. You bury that shit in your backyard and meanwhile some crazy inflation happens. In theory the value of gold should rise with inflation or possibly surpass it. Now say you want to cash out this money for much more of the inflated currency and dig it out of your backyard. Now what the fuck do you do with it? You can't just go peddle gold bars to Joe Schmoe in the mall. If you go to some "we buy gold" place you'll get schlonged with fees and they won't buy at value because they want to resell it too. You're basically stuck with a bunch of heavy metal. and in case of the doomsday scenario where shit happen sot get so bad that the place turns into Venezuela or Zimbabwe, I can't see how having all that gold will do anything for you. Surely food, land, water, etc will be more useful and valuable than heavy metal. I'm just trying to protect the savings I've busted my ass for from being wiped out during the bailouts and the money printing. [link] [comments]  |
| What's the best way to hedge against inflation? Posted: 29 Mar 2020 11:41 AM PDT Reading the writing on the wall, between the growing Federal Government debt broadly and both the monetary and fiscal responses to COVID-19 specifically, it seems that significant inflation is a very real possibility. Assuming this is the case, what is the best way to hedge against it? Thanks in advance for any and all replies. [link] [comments]  |
| Posted: 29 Mar 2020 07:52 AM PDT I'm guessing not many people are shorting and I'd love to know why. Is it because it's hard psychologically and that you have FOMO about the recovering? That would be the reason for me. [link] [comments]  |
| Economy not as strong as it seemed Posted: 29 Mar 2020 11:12 AM PDT If you've been reading any of my posts, this has been my line of thinking, for many years now actually. The beginning of this article has a few good tidbits about the size of the problem. https://www.washingtonpost.com/business/2020/03/28/recession-economy-coronavirus/ "In hindsight, however, the economy had blemishes. The record-high stock prices the president routinely touted became disconnected from companies' underlying value, obscuring warning signs such as excessive borrowing, according to economist Michalis Nikiforos of the Levy Economics Institute of Bard College. Total corporate debt surged past $10 trillion, equal to nearly one-half the nation's annual output. "This shock does not come at a time when the economy is otherwise healthy," he said. "There are very significant fragilities in the U.S. economy and elsewhere." On the eve of the crisis, one-quarter of the country's largest companies had more cash going out than coming in, according to Goldman Sachs. The economic shutdown will quickly cause the share of American companies that are cash-flow negative to nearly double, meaning they could be in danger of starving for funds." No one has a crystal ball and will know how exactly all this will play out, but don't be in a rush to take a position one way or another. If things truly are, or will become, as bad as some say, we could have a downward trajectory for a few years. It's very early in the process. [link] [comments]  |
| Posted: 29 Mar 2020 04:18 PM PDT Is there a database of historical records showing the DJIA, S&P and NASDAQ (any or all three) futures prior to the markets opening and how each index finished the day? I'm wondering if futures for DJIA are down, say 2%, does the DJIA end the day down 2%, down 1%, up 0.5%, etc? While many factors effect the indexes throughout the day, I'm just looking for historical data. Thanks. [link] [comments]  |
| Posted: 29 Mar 2020 01:41 PM PDT I've been pondering on how the world will react once the dust settles and there is a postmortem on the economic carnage. There will be a call for heads to roll and I expect blame to deflected (some maybe warranted and unwarranted). For example, I think the Trump administration will seek some type of retribution from the Chinese in one form or another. I also expect other countries to follow suit just because they will want to stave off any political blame. Thoughts? [link] [comments]  |
| Commercial Real Estate Investments Posted: 29 Mar 2020 05:18 PM PDT Are these going to be murdered? Specifically I own a lot of TIAA Real Estate that collects rents. On the one hand I think the property with keep value or increase with inflation. On the other hand who will pay rent? Dump for money market? [link] [comments]  |
| Market reaction on jobless claims record Posted: 29 Mar 2020 09:54 AM PDT More than a month into the Covid-19 crisis and one of the most shocking pieces of economic data ever came out last week. Jobless claims soared past 3.3M. That's about 5x larger than the previous record (source)! What was surprising though, was how the markets reacted to that news, with stocks rising for three consecutive days (source). Are investors too optimistic (doubtful) or just lost in a chaos of information they cannot absorb? [link] [comments]  |
| Recommendations for Investment Math Problem Books Posted: 29 Mar 2020 08:47 PM PDT Hi All, I am interested in recommendations for finance / investment books that teaches concepts and theory with math problems to practice. A kind of hands-on learning approach. Hoping to find something that will be helpful with investing in the future. [link] [comments]  |
| Posted: 30 Mar 2020 01:13 AM PDT They are undervalued and i can't decide should i buy. Looks like it should be a good deal, get dividends now, sell in Q4 2020, maybe later when the situation is relaxed. [link] [comments]  |
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