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    Daily Advice Thread - All basic help or advice questions must be posted here. Investing

    March 05, 2020

    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: 05 Mar 2020 04:10 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:

    • 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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    PSA to anyone thinking of moving their brokerage accounts out of Robinhood: you do NOT need to liquidate all of your assets before transferring your positions out. Selling your positions triggers a taxable event and creates a capital gains tax liability. Simply submit an ACATS transfer.

    Posted: 04 Mar 2020 06:06 PM PST

    All you need to do is initiate an ACATS transfer at your preferred receiving brokerage and your assets will transfer over in-kind, meaning that your stocks, bonds, mutual funds, etc will transfer and cost basis for tax purposes will transfer over as well.

    All of the major brokers such as TD, Fidelity, Schwab, E*Trade, etc support ACAT transfers.

    Note: proprietary or non-transferable positions may still need to be liquidated, but all publicly traded instruments should be fine. These transfers typically take 5 business days and you should refrain from transacting on the account when you are ready to transfer. Don't have open limit orders, expiring options, recurring ACHs open otherwise RH will reject your request.

    Godspeed!!

    Edit: I am not a tax advisor so nothing I say should be construed as tax advice, so I cannot tell you what you should or should not do. Please consult a tax professional if you have specific questions.

    submitted by /u/bano25
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    Dow surges 900 points as UnitedHealth heads for best day in more than a decade

    Posted: 04 Mar 2020 11:37 AM PST

    The Dow Jones Industrial Average traded 900 points higher, or 3.3%. The S&P 500 jumped 3.1%, while the Nasdaq Composite advanced 2.9%.

    https://www.cnbc.com/2020/03/03/dow-futures-show-300-point-pop-as-early-super-tuesday-results-favor.html

    submitted by /u/pipsdontsqueak
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    Man! I wish I knew this earlier when I was younger!

    Posted: 04 Mar 2020 05:00 PM PST

    You know that moment when you look back and wonder: what the f*** I was doing, spending too much time in front of the screen? That's me right now!

    I've been interested in several investment topics since I can remember and only now I can finally realize I didn't need that overwhelming amount of information.

    If you value your precious time, stop right now and pay attention to a piece of honest advice: several proven cases show that you just need a tiny fraction of financial data to build a conservative strategy, reducing your risks on stocks for the long run.

    I know some of you truly enjoy deep analysis of companies, however, I've got some suggestions for your time: go to the gym, update your Netflix series, drink some beer with your friends, spend more time with your family and, please, do not forget to feed your cat (they would never forgive you for that!!).

    The bottom line is: you just need to avoid terrible choices. Don't trust me? OK. Just look at the numbers.

    Proof #1: in the end, profits are the one thing that matters the most.

    Among all those data from financial reports, there's one that summarizes the economic situation of the company: profit (aka net income, as they like to call it). Look at these simple comparisons between good net income and stock prices:

    Apple (until Nov, 15th):

    net income (US$ millions) year closing price
    2008 1,072 12.19
    2009 8,235 30.10
    2010 14,013 46.08
    2011 25,922 57.85
    2012 41,733 76.02
    2013 37,037 80.14
    2014 39,510 110.38
    2015 53,394 105.26
    2016 45,687 115.82
    2017 48,351 169.23
    2018 59,531 157.74
    2019 55,256 265.76

    Walt Disney (until Nov, 18th):

    net income (US$ millions) year closing price
    2009 3,609 32.25
    2010 4,313 37.51
    2011 5,258 37.50
    2012 6,173 49.79
    2013 6,636 76.40
    2014 8,004 94.19
    2015 8,852 105.08
    2016 9,790 104.22
    2017 9,366 107.51
    2018 13,066 109.65
    2019 12,798 144.67

    ​

    Home Depot (until Nov 19th):

    net income (US$ millions) year closing price
    2008 1,958 23.02
    2009 2,661 28.93
    2010 3,338 35.06
    2011 3,883 42.04
    2012 4,535 61.85
    2013 5,385 82.34
    2014 6,345 104.97
    2015 7,009 132.25
    2016 7,957 134.08
    2017 8,630 189.53
    2018 11,121 171.82
    2019 11,203 238.85

    ​

    MasterCard (until Nov 19th):

    net income (US$ millions) year closing price
    2008 -939 14.29
    2009 1,463 25.59
    2010 1,847 22.41
    2011 1,906 37.28
    2012 2,759 49.12
    2013 3,116 83.54
    2014 3,617 86.16
    2015 3,808 97.36
    2016 4,059 103.25
    2017 3,915 151.36
    2018 5,859 188.65

    ​

    Monster Beverage Corp (until Nov, 2019):

    net income (US$ millions) year closing price
    2009 113 6.40
    2010 210 8.71
    2011 285 15.35
    2012 338 17.61
    2013 337 22.59
    2014 482 36.11
    2015 545 49.65
    2016 710 44.34
    2017 818 63.29
    2018 992 49.22
    2019 1,090 59.03

    ​

    On the other hand, let's take a look at some poor net income:

    Newmont Mining Corp (untill Nov, 19th):

    net income (US$ millions) year closing price
    2008 561 40.70
    2009 2,093 47.31
    2010 2,302 61.43
    2011 302 60.01
    2012 2,111 46.44
    2013 -2,795 23.03
    2014 329 18.90
    2015 304 17.99
    2016 -943 34.07
    2017 -109 37.52
    2018 380 34.65
    2019 2,338 38.35

    ​

    Milestone Scientific Inc

    net income (US$ millions) year closing price
    2010 0 1.02
    2011 -4 0.36
    2012 -2 1.45
    2013 4 1.70
    2014 0 2.30
    2015 -6 2.35
    2016 -6 1.40
    2017 -4 1.18
    2018 -5 0.33
    2019 -3 1.12

    M - Macys Inc (untill Nov 21st):

    net income (US$ millions) year closing price
    2009 329 16.76
    2010 847 25.30
    2011 1,256 32.18
    2012 1,335 39.02
    2013 1,486 53.40
    2014 1,526 65.75
    2015 1,070 34.98
    2016 611 35.81
    2017 1,536 25.19
    2018 1,098 29.78
    2019 1,025 14.67

    ​

    Tripadvisor (until nov, 21st):

    net income (US$ millions) year closing price
    2011 177 25.21
    2012 194 41.92
    2013 205 82.83
    2014 226 74.66
    2015 198 85.25
    2016 120 46.37
    2017 -19 34.46
    2018 113 53.94
    2019 117 28.06

    GAP:

    net income (US$ millions) year closing price
    2009 1,102 20.95
    2010 1,204 22.14
    2011 833 18.55
    2012 1,135 31.04
    2013 1,280 39.08
    2014 1,262 42.11
    2015 920 24.70
    2016 676 22.44
    2017 848 34.06
    2018 1,003 25.76
    2019 937 16.22

    By the way. I love searching for vacation tips and hotels on TripAdvisor. But, would I buy their stocks? Not for a while...

    And you know the most exciting?

    It doesn't matter the country you live in! If you pay attention to stocks in your home, you're gonna find the same pattern!

    Proof #2: diversification is your best friend.

    Now you might wonder: what if a company fails? Well, in this case, diversification is your best friend.

    Let me ask you another question: if you had $100 on your wallet right now, would it hurt too much if you suddenly lost $2?

    Pay attention: It's not a math question! Of course, you're gonna have less money in this case. What I'm really asking is much simpler: would you really care if, someday, walking on the street, you lost $2?

    The answer is more revealing than you think:

    If you said "yes, I do care", listen to a piece of honest advice: stocks are not for you. But don't worry! There's absolutely nothing wrong about that. You just gotta find what suits you best. No investment should keep you awake at night!

    On the other hand, if you said "no, I don't really care…", I have some great numbers to show you.

    When your portfolio is properly diversified, the risk of bankrupt of one specific company will represent only about 2% of your portfolio.

    Just follow this practical step-by-step system:

    First of all: you don't wanna go all in! Keep Vegas mood out of this! Instead, let's take smooth steps so that we can keep our process less risky.

    Each month, you will take that part of your savings you wanted to put on stocks and buy shares of only one company. Let's say $300 per month (you decide how much, but take it easy).

    And each month, you'll buy shares of a new company, gradually diversifying your portfolio. In the beginning, you will see just a few companies in your portfolio (and it should begin like this), but over time, you will notice a constant increase in the numbers of shares.

    It goes like this:

    1st month: $300 on company 1 = 100% per company

    2nd month: $300 on company 2 = 50% per company

    3rd month: $300 on company 3 = 33% per company

    (…)

    10th month: $300 on company 10 = 10% per company

    (…)

    50th month: $300 on company 50 = 2% per company

    As you can see, in the first month, 100% of your portfolio is concentrated in one single company, however, it's only $300 at that moment (that's why it's so important to keep it slow).

    After a while, even though your portfolio has increased, your risk has been gradually reduced, thanks to diversification.

    And there's more: even if one specific company fails or faces a hard time in its financial situation, remember that you already chose other high-quality stocks, based on consistent profits. In this case, statistics are on your side and the companies are very likely to be gradually growing.

    Proof #3: During a crisis, good companies are like professional fighters under pressure.

    Have you ever seen a professional fighter under pressure on the ring? He may get several punches on the face and even be pushed to the corner, but due to his consistent training, proper nutrition and all the professional team on his side, he is able to stay tight, defend himself and overcome the pressure.

    The same logic applies to stocks. Companies with a long history of consistent profits are more likely to survive when crisis punches them on the face. They may see their profits reduce or even experience some losses (like Mastercard in 2008, as shown above), but their overall positive financial situation enables them to overcome the situation in the long run.

    One last warning: in most cases, prices will drop severely during a crisis, regardless of the financial situation of the company, but, just like a professional fighter, you need to stay tight for the long run.

    I can't stress this enough: you gotta be tough!

    My honest advice for you to keep cool is this: practice any sport, stay with your family, do the things you enjoy the most. You don't need hours in front of the screen, worrying about the stocks. Just like I said before, no investment should keep you awake at night or steal your precious time during the day. Go out and live your life.

    Look at these numbers of 2008-2009 crisis period, compared with the current situation:

    BlackRock:

    year net income (US$ millions) year closing price
    2006 323 151.90
    2007 993 216.80
    2008 784 134.15
    2009 875 232.20
    (...) (...) (...)
    2018 4,305 392.82

    LRCX - Lam Research Corp

    year net income (US$ millions) year closing price
    2007 686 43.23
    2008 439 21.28
    2009 -302 39.21
    2010 347 51.78
    (...) (...) (...)
    2019 2,191 292.40

    UnitedHealth Group

    year net income (US$ millions) year closing price
    2007 4,654 58.20
    2008 2,977 26.60
    2009 3,822 30.48
    2010 4,634 36.11
    (...) (...) (...)
    2018 11,986 249.12

    As you can see, companies with consistent profits are more likely to handle the punches during crisis periods.

    ​

    Summing up a smooth, stress-free stocks investment strategy:

    1) focus on net income;

    2) diversification;

    3) keep cool on crisis.

    submitted by /u/_allthatjazz
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    Robinhood offers $15 discount, blames outage on record trades

    Posted: 04 Mar 2020 09:48 AM PST

    The $912 million-funded fintech giant will provide compensation to all customers of its Robinhood Gold premium subscription for borrowing money to trade plus access to Morningstar research reports, Nasdaq data, and bigger instant deposits. It's offering them three months of service.

    A month of Robinhood Gold costs $5 plus 5% yearly interest on borrowing above $1,000, charged daily. Before a pricing change, the flat fee per month could range as high as $200. However, compensated users will only get the $5 off per month, for a total of $15. That could seem woefully insufficient if Robinhood users missed out on buying back into stocks like Apple that went up over 9% on Monday. Robinhood is calling it a "first step".

    Techcrunch

    submitted by /u/ChocolateTsar
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    Apple, Microsoft, Google look to move production away from China. That’s not going to be easy.

    Posted: 04 Mar 2020 09:26 PM PST

    Campbell Soup Company (CPB) hits new one year high as people stock up on can goods for the pandemic

    Posted: 04 Mar 2020 11:46 AM PST

    Campbell Soup Company (CPB) hits new one year high as people stock up on can goods for the pandemic

    submitted by /u/stonksmarket
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    Flybe collapses as coronavirus deals final blow

    Posted: 05 Mar 2020 03:31 AM PST

    LONDON (Reuters) - British regional airline Flybe collapsed on Thursday after a plunge in travel demand, making the long-struggling carrier one of the first big corporate casualties of the coronavirus outbreak.

    https://uk.reuters.com/article/uk-flybe-funding-administration/flybe-collapses-as-coronavirus-deals-final-blow-idUKKBN20R34N

    submitted by /u/praetserge
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    Private payrolls up 183,000 as hiring shows no signs of coronavirus scare

    Posted: 04 Mar 2020 05:49 AM PST

    Despite the coronavirus scare, private payrolls rose by 183,000 in February, well ahead of Wall Street estimates for 155,000.

    Growth was concentrated in big businesses, which added 133,000.

    January's number was revised down sharply, from an initially reported 291,000 to 209,000.

    https://www.cnbc.com/2020/03/04/adp-moodys-private-payrolls-february-2020.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard

    submitted by /u/NineteenEighty9
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    Jim Cramer recommends to buy stocks but he thinks sector ETFs reached their “peak”. What does he mean considering that ETFs are made up of stocks he recommends buying?

    Posted: 04 Mar 2020 06:49 PM PST

    Chinese stocks lead gains as IMF announces $50 billion package to fight coronavirus

    Posted: 04 Mar 2020 08:49 PM PST

    Resources for fundamental analysis of companies?

    Posted: 04 Mar 2020 06:34 PM PST

    What are some good resources (services, newsletters, blogs, podcasts, youtube links etc) that analyze companies (tech in particular) in detail and provide fundamental analysis? I would like to understand the business model and financials of companies and looking for resources. Appreciate any inputs.

    submitted by /u/epowerx23
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    Where is everyone parking their money in?

    Posted: 04 Mar 2020 08:55 AM PST

    As everyone knows, the market is crazy right now. However, in the past couple years even if you were in cash, you still were earning 2%+ APY on treasuries or HY Savings account. Now with the rate cut, you'll probably be lucky with 1% APY which is lower than inflation.

    What's everyone doing with their money? Equities are still too volatile to dump all the money in. Still wait it out? Gold? Real estate?

    submitted by /u/PZinger6
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    People who have achieved Financial Freedom, what advice can you give to a young adult who just recently graduated from university and started his first job ever?

    Posted: 04 Mar 2020 08:45 PM PST

    What business/finance book(s) have had the greatest impact on your life?

    Posted: 04 Mar 2020 07:38 PM PST

    I started getting into business/finance by listening to Pat Flynn's podcast "SPI" (smart passive income). Ramit Sethi was a guest on one of his episodes, and I liked what he was saying enough to buy his book "I Will Teach You to be Rich". Much of the book was not new information by any means, but enough of it was that it motivated me to change my way of thinking about a lot of things.

    Interested in learning more, I found my way to JL Collins' book "The Simple Path to Wealth", which educated me enough to realize that A) I was not saving/investing nearly as much as I could (and should), and B) my investments over the past handful of years have not been very smart. But I didn't know better, and now (I think) I do.

    Although only time will tell, I think I may look back at some point on these two books as pillars in a paradigm shift of my way of thinking into a much more successful life. So, this got me thinking, what book (or books) have impacted you in life-changing ways?

    submitted by /u/Nick42988
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    Degiro terrible customer service issues (locked out for 3 days and counting)

    Posted: 05 Mar 2020 01:15 AM PST

    Tried to "upgrade" my account to active trader to have access to options.

    You have to do a questionnaire to make sure you understand the risks and what have you.

    Upon completing the questionnaire, I get this: https://i.imgur.com/pSslBW0.png

    It doesn't matter what options I pick on any of the questions. The same thing happens. Happens on every browser, even the Degiro Android app.

    I've sent them the screenshots, and error messages (from the browser console). I didn't even get a reply until this morning, and that's only because I specifically asked the woman over the phone to at least reply and acknowledge the problem in writing via email.

    3 days, 5 emails, and 2 phone calls later - I still cannot get past this screen. It has been 'escalated' to the IT department. I'm a software developer, so I know what that means.

    Has anyone had this issue before?

    submitted by /u/H_o
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    How do I setup Fidelity to automatically invest my monthly deposits?

    Posted: 04 Mar 2020 02:44 PM PST

    So I have monthly deposits set up and I thought i set up my portfolio so it divides the money up based on my choices but after my first deposit the money day in the account until I manually invested it.

    Does anyone know how to set it up so it's automatic and follows the portfolio I have set up?

    Apologies if this is confusing I'm new to this and Fidelity is overwhelming

    submitted by /u/DocsHandkerchief
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    [USA] What is refinancing when low treasury yields?

    Posted: 05 Mar 2020 04:30 AM PST

    What does it mean when people say "wow 10 year treasury constant maturity rate yields are low, I have to refinance my home"

    First of all, what are these?

    Secondly, why dose it matter if they are low?

    Thirdly, why do people want to "refinance" when yields are low?

    submitted by /u/AnythingForSuccess
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    ANU modeling has predicted a global coronavirus pandemic best-case scenario would result in 15 million dead worldwide and a $2.4 trillion hit to global GDP. The worse-case scenario predicts 68 million dead and GDP loss of $9 trillion

    Posted: 05 Mar 2020 04:23 AM PST

    Given that some popular ETFs are heavily weighed in favor of a few stocks (e.g. QQQ), can one argue that buying the top X holdings of the ETF would provide sufficient diversification?

    Posted: 04 Mar 2020 11:28 AM PST

    I understand that active management requires time and rebalancing, but I was wondering theoretically if I could just buy, let's say, the top 30 holdings of an ETF and expect it to perform similarly to the ETF itself.

    submitted by /u/AlienInvestor
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    Learning thinkorswim

    Posted: 04 Mar 2020 02:47 PM PST

    Hello!

    Does anyone have any useful resources that will help someone who's new to thinkorswim learn the ropes? I'm new to the system and am looking for resources that can help me from the beginning to where I will be comfortable trading on a daily basis. Obviously time will be the most useful in getting familiar, but knowing where to start would be helpful.

    Thanks for any help!

    submitted by /u/mrperfect6ie
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    How best to invest 15,000?

    Posted: 05 Mar 2020 03:48 AM PST

    Here are some facts:

    I'm canadian (in case that's a factor)

    I have paid off over 35,000 in student debt and am 27.

    My car is paid off - it's an '05 car but it gets me from a to b with little maintenance. She just keeps going it seems.

    I have 15,000 I could invest with or put somewhere. Its currently in my savings (have 5000 more in my checkings) and I'm not sure if I should let the 15 just sit there (virtually nothing interest rate) or invest it in something or buy something that will surely be more reliable than my 15 year old car as I'm sure her time is drawing near an end soon.

    I feel like I'm doing okay for myself so far and have never taken a vacation of any sort as I grew up super poor so I'm always trying to save money.

    How should I deal with this money to maximize my profits?

    Edit: another thought is set it aside for a house but I see that as a dangerous money sink hole (currently a renter)

    submitted by /u/Shirtless_Spider-Man
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    Is there a legitimate threat to enough of Robinhood’s customers pulling out to the point of Robinhood’s inability to pay out?

    Posted: 04 Mar 2020 07:34 AM PST

    Forgive me if this has been discussed before. We've all seen the news of Robinhood's mishaps of late. Pretty much everyone I know who uses (or previously used) Robinhood, is done with them.

    For the most part this entails just opening up a new brokerage account and shifting the assets, but with the uncertainty around the market and the general stereotypes of the "typical Robinhood investor", I've spoken to a few people who have just simply closed out all positions and initiated transfers to their checking accounts.

    A few questions: 1) What happens if Robinhood were to go out of business? 2) Older investors: Are there any examples of brokerages folding in the past? What happened in those cases? 3) What are some possible scenarios / options for Robinhood at this point given the issues they've faced?

    Any input or thoughts are appreciated!

    submitted by /u/44thatsme
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    Crowdfunding Alternative Assets - Good Investment?

    Posted: 05 Mar 2020 03:14 AM PST

    How do you all feel about the recent securitization of pretty much almost every asset class under the sun? For example, platforms like Fundrise, Masterworks, Rally Rd, AcreTrader, etc.? Would you/have you invested in any of these? Made some money or lost some? Do you feel as though these alternative assets are the future of investing, since the crowdfunding aspect has made barrier to entry so low? Or do you think that these businesses are unsustainable for the long run? How much money do you feel like these businesses are making? Please let me know your thoughts!

    submitted by /u/finofthefuture
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