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    Sunday, October 11, 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. Investing


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

    Posted: 10 Oct 2020 05:09 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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    Why are Renewable Stocks Going Up?

    Posted: 10 Oct 2020 07:38 PM PDT

    What are the biggest reasons renewable stocks have been going up these past months?

    The Biden-Harris campaign has some impact, but there has to be more to the story. Do you think part of it is just riding the wave, speculation, or just general transition to renewable energies?

    submitted by /u/Austins-Reddit
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    Favorite dividend stock/etf to invest in

    Posted: 10 Oct 2020 12:41 PM PDT

    I'm opening a separate trading account for multi year investments and I'm trying to decide what to invest in. What are some solid dividend stocks that you recommend or some dividend etfs? My plan is to throw some extra cash in every month and reinvest dividends for many years until I have a nest egg

    submitted by /u/rogerdog1
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    Analyzing Bank Stocks

    Posted: 10 Oct 2020 07:14 AM PDT

    Trying to figure out the nuance of analyzing bank/financial sector stocks compared to a standard company.

    What are the specific metrics which are of outsized importance in bank functioning?

    How would one modify a valuation to account for eccentricities of the banking sector?

    What can be ignored in looking at banks which shouldn't be ignored elsewhere?

    I know I shouldn't be looking beyond my circle of competence, and trying to expand ones circle of competence is a fools errand because others will truly excel where you are just trying to catch up. But banks appear so beaten down right there in sure there's opportunities; just trying to distill which of them are worth pursuing.

    Specifically think I'm looking WFC vs BAC, but want to develop a paradigm which I can apply there as well as more widely. Thanks

    submitted by /u/ParadoxPath
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    Is rebalancing necessary?

    Posted: 10 Oct 2020 08:20 PM PDT

    Do you guys feel that rebalancing a portfolio is necessary? Because it makes sense to trim your winners and stick to a fixed allocation target, but at the same time it makes sense to continuously let your winners run further.

    Reason I'm asking is because ARKK has been dominating in terms of returns, and it is going beyond the portfolio target i've set for it.

    Edit : Thanks for all the insightful responses :) I'm an NRA by the way so I do not pay taxes on capital gains. So i do not factor capital gains taxes when thinking about rebalancing

    submitted by /u/HashMapCode
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    Historical Nation Debt Exceeds the Economy?

    Posted: 10 Oct 2020 08:53 PM PDT

    Hey Reddit,

    What are the historical repercussion of a countries national debt exceeding the economy?

    Is anyone aware of a specific country that experienced this?

    I recognize that the US economy is different due to the military, influence of power, and the mass amount of items imported from other countries can, but where are we projected to be?

    Money is a social construct, but where do we go from here.. Where does our future lie?

    submitted by /u/Boots2243
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    401(a) Plans and CARES Act Relief

    Posted: 10 Oct 2020 07:39 PM PDT

    Does anyone else know, for sure, if in-service distributions are allowed as corona related withdrawals for 401(a) defined contribution plans? I work for State of South Carolina and the guidance on their website says no but I did read something on NAGDCA that said it is allowed. I have hit a hardship and desperately need to take a withdrawal.

    The NAGDCA says "If the plan has a set contribution and has not officially declared itself to be an MPP, the plan sponsor may conclude that they can take advantage of the new coronavirus-related distribution provisions"

    State of SC says: The CARES Act did not create a new form of in-service distribution for 401(a) defined contribution plans, such as the State ORP. Guidance issued by the IRS has clarified that the new in-service distributions allowed by the CARES Act are only available for certain types of plans (e.g., 401(k), 403(b), 457(b)), and do not override the ordinary distribution rules for 401(a) plans such as the State ORP, which generally prohibit in-service distributions unless someone has reached normal retirement age. See, for example, Question 10 of the IRS Coronavirus-related relief for retirement plans and IRAs questions and answers.

    Although the CARES Act did not authorize new forms of in-service distributions from the State ORP, the PEBA Board did resolve at its April 17, 2020, meeting that, if the federal government takes future action that would allow in-service coronavirus-related distributions from 401(a) defined contribution plans before normal retirement age, PEBA would adopt those distributions for the State ORP.

    submitted by /u/je03955
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    Avg stock dip on a reverse split?

    Posted: 10 Oct 2020 06:33 PM PDT

    If a company goes through a reverse split it obviously sends a bad message to shareholders. Is there any avg % dip on an equity when they do the RS? I understand the RS itself raises share price by reducing shares but I mean a dip based on public perception.. thanks

    submitted by /u/Rorgery
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    ETF vs buying individual stocks.

    Posted: 10 Oct 2020 11:24 PM PDT

    Hello, I have a question/concern.

    I'm interested in a particular ARK ETF. I'm also interested in owning one or two particular stocks from the ETF. Does it make sense to only invest in the ETF instead of the stock itself? Or is it not a bad idea to invest in the individual stock as well as the ETF?

    Is this a terrible idea? Say I have 3 individual stocks that are part of the sp500, but I also own SPY.

    If this is good, how would you weight them in your portfolio? More % in the ETF or the stock?

    Thanks!

    submitted by /u/scoutswan
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    Some questions about dividends stocks

    Posted: 11 Oct 2020 02:51 AM PDT

    Hey folks, I started trading back in April, so I'm still new to this and so far, I've been making mostly pennystocks swing trades or mid-large caps intraday flipping. However, I've always been interested into investing in dividends stocks to become financialy independent over time. So far my trades have been 50-50 in profits/loss so I wanna stop trying to time the market. It doesn't work.

    So, typically, how much money invested do you need to make a decent living off the dividends ? Like 60k/year or so. I know it's hard to narrow down exactly because dividends come and go, can be reduced, halted, etc.

    A quick look at my financial profile

    • I'm 35 years old
    • making roughly 5000$ US dollars after all deductions per month (annual salary increases by 2% every April)
    • I don't have any payments to make (cell phone, housing, etc. - all paid).
    • In theory, I have 4000$ US dollars every month of disposable income.
    • However, I only have a little more than 20k$ US worth of savings so far.

    My understanding is that I can use my monthly salary to build up a very large dividends stocks position rather quickly, and retire at a rather early age.

    Any thoughts would be more than welcome ! Thanks.

    submitted by /u/ImportantLog8
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    ARK ARK ARK

    Posted: 11 Oct 2020 01:58 AM PDT

    I find interesting that ARK ETFs are being commented in most threads. ARK ETFs are performing so well, it's so forward thinking, Cathie Woods is so smart, blah blah blah...

    Funny because I have been on this sub for years, and ARK ETF only started to be discussed here less than a year or so ago. And it is been in most threads in the past 6 months. Obviously, it is due to recently bias, some of the stocks they picked did so well in 2020, so everyone is talking about ARK now. Valuation does not matter, stocks go to the sky, etc...

    If you had significant exposure to ARK ETF 6-12 months ago, and you are largely positive, count your blessings. There is no guarantee that they will perform well next year, or in 5-10-15-20 years. I see many comments implying this is pretty much a done deal, that it will go to the moon long term. But nothing is certain. Do not be overly concentrated.

    Active funds are a double edge swords. If you want a lesson from the past, look up Legg Mason. Bill Miller beat S&P for 15 years. He was a proven legend over and over (so not like ARK ETFs that have only less than 1 year of very good record, with most of their ETFs behaving the same - hello Tesla and friends).

    Except that after his 15 years, he started underperforming S&P significantly. Things were so bad, they ended up selling the whole Legg Mason company.

    All of this to say, it is okay to have some ARK ETFs, avoid too much of it though, and understand that it is high beta stocks that can go up and down significantly and very quickly. Also make sure to grasp when you are falling for recency bias.

    submitted by /u/_WhatchaDoin_
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    Portfolio Review

    Posted: 10 Oct 2020 06:55 PM PDT

    Hey you, yea you that's reading this... I hope you stay safe in these unprecedented times.

    In the meanwhile, I'm looking for any thoughts/perspective/advice on my portfolio.

    Been into stocks for well over a year, 31 years old looking for buy and hold long term growth for IRA, which is why I've been into ETFs mostly. I've done countless research and decided to do a 3-ETF for retirement and the occasional ~2-3 additional stock/ETF on the side.

    Currently I hold:

    • 60-70% VOO/VTI/VXUS for retirement
      • I know VOO and VTI overlap and are basically the same thing but I wanted to invest in the S&P while also organizing mid-cap and small-cap under one same thing.
    • 30-40% QQQ/ARKK
      • Looking for growth with these either short term or long term, open to hold or trade depending on market conditions.

    -BND/VNQ on watchlist to buy eventually for retirement but currently eyeing the other ARKs (F,Q,G,W) because WOW THOSE ARK GROWTHS.

    -I've done a fair amount of research on ARK and I'm very convinced on Catherine Wood and her vision, which is why I don't mind selling VTI or VXUS but I've been hitting a brick wall comparing all the available options I can trade up on in order to make the best choice regarding my portfolio. Again, any thoughts/perspective/advice would be highly appreciated.

    submitted by /u/tuiinkie
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    Just watched this Cathie Woods (ARK CIO) talk and I'm fully convinced.

    Posted: 10 Oct 2020 09:29 PM PDT

    Wow. Let me just say that I'm pretty much sold on any ARK fund and all cash in BTC. This video is highly worth the watch IMO. Really interesting high level points on innovation, passive index investing and value traps, BTC, etc.

    https://www.youtube.com/watch?v=eE6u67Ph768

    submitted by /u/mightyduck19
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    How to trade in a merger

    Posted: 11 Oct 2020 03:23 AM PDT

    Hey,

    I wanted to ask a question about the following example.

    The share price of a stock "A" is at 5$, and there is an announcement of a merger with a company "C" that has a larger market cap and would control company A, which is offering 7$ a share for it.

    Would the share price of A reach 7$ for sure until my shares are being converted into shares of C?

    Could it be that the share price of A would even permanently go higher than 7$ before being converted to C shares? So is there still potential for a higher share price?

    Would the share price "automatically" fall to 7$ shortly before the merger being finished?

    Is it smart to sell the A shares immediately after the announcement of a merger in general terms of trading?

    What would be a smart behaviour in this merger situation?

    Thanks, Best

    submitted by /u/songwriter1234
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    How do y'all feel about AMC stocks?

    Posted: 10 Oct 2020 08:07 AM PDT

    They way I see it, is it's only a matter of time before movie theaters open back up again fully, and we're pumping out massive blockbusters every year again.

    In 2016, AMC stock price was hovering around $30.00, now it's around 4.00 last I checked. Seems like a great time to buy, especially as their main competitor, Cineworld, shuddered their US locations.

    Of course this could also be the tipping point where we stop going to movie theaters entirely and begin to shift new releases to at home streaming, which wouldn't bode too well for AMC I imagine.

    Do you guys think it's a safe buy and hold?

    submitted by /u/whiskeyclouds
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    Best ETF or Mutual Fund to take advantage of the Green New Deal (or whatever portion of it might come to fruition)?

    Posted: 10 Oct 2020 10:57 PM PDT

    Polls are pointing to a Biden-Harris win, in which case renewable/green energy will likely see new government subsidies and a huge push for new infrastructure. EPA standards will probably be returned to their pre-Trump guidelines. Some portion of the Green New Deal is likely to be undertaken. And while the full Deal might not be put into practice, some fraction of the $10-93 trillion will be spent on projects/jobs/companies. I'd like to invest in those companies now, en masse, in anticipation.

    There are plenty of solar ETFs, great renewable-energy mutual funds, tons of socially responsible funds... But what if there's one fund that will be more exposed to this massive amount of spending than others?

    Has anyone done any research on this and maybe come up with a small group of funds that are going to see a few trillion dollars thrown at their holdings over the next few years?

    I've watched TAN go up over the last few weeks and know that's a likely start, but there must be so much more I'm missing.

    Thank you.

    submitted by /u/mac3blade
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    Why $WKHS has already won the $8.1B USPS contract,

    Posted: 11 Oct 2020 02:39 AM PDT

    $WKHS Workhorse

    USPS Contract = $8,100,000,000

    ZERO EMISSION fleet vehicle upgrade

    -3 remaining competitors since July 14th,2020 turn in deadline:

    2 producing emission; Ford(Gas) & Oshkosh(Hybrid ()foreign)

    vs

    1 producing ZERO emission; Workhorse (100% all electric, patented stop & go brake recharge technology)

    -USPS currently spends $500M a year on gas

    -Manufacturing will be completed at Lordstown, Ohio factory using 1/2 the facility

    -Per WKHS CFO, 2 months back, "our GPS system scans mailboxes since mailmen take the same route every day. The system stops at each box along the route using its patented stop & go technology
    -all vehicles come with fully integrated built-in GPS systems (an upgrade the USPS desperately needs)

    -There is a current gag order on all WKHS employees from USPS

    Government total = $28.1B

    -$20B for #USPS facilities to become public electric charge stations

    +8.1B for Zero Emission vehicles

    https://federalnewsnetwork.com/congress/2020/07/house-passed-infrastructure-bill-gives-usps-25b-for-e-vehicles-facility-updates/

    submitted by /u/WHOpandaman
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    Ultra Long Term

    Posted: 11 Oct 2020 12:15 AM PDT

    What do you guys and gals look for in companies when considering in them for the ultra Long Term?

    As in, I want to hold this company for the next 40(+?) Years. And i assume that if your thesis fundamentally changes you sell the investment. But is there anything different you look for if you are evaluating a company for ultra-long term investing?

    submitted by /u/matto89
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    Should I consolidate Investments?

    Posted: 10 Oct 2020 09:13 PM PDT

    I've always heard you should do what you can to get to 100K in investments.

    I have close to this 30K work 401K 50K Roth IRA 10K emergency fund in a savings account

    Should I try to consolidate all of these into one account or does it not matter so long as I have close to 100K in separate accounts?

    submitted by /u/Sirduke16
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    ARK Invest: where to find stock reports they did?

    Posted: 10 Oct 2020 09:29 AM PDT

    Does anybody know where you can find reports on a stock ARK has invested in? For example, I know they're invested in Adyen (payment company) but where can you find their analysis of it? On their site you can subcribe to a whole bunch of newsletters and they're very open about all their research, but how do you find stock reports they've done? Is there a way to search for those reports or white papers somewhere? Thanks.

    submitted by /u/ThinkBigger01
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    Black Rock Municipal Income (BFK)

    Posted: 10 Oct 2020 08:19 PM PDT

    Not comfortable with the recent pace of the market. Thinking about moving a large amount into BFK short-term to see where the market ends up going. Currently yielding 5% (tax-free) due to municipal bonds which seems good especially if you're in a higher tax bracket. Anything to be concerned about? Seems like a pretty safe place to park some cash.

    submitted by /u/fit_eleven_11
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    How important is stock-based compensation when analyzing a company?

    Posted: 10 Oct 2020 06:51 AM PDT

    Normally I skim over the stock-based compensation part when reading a 10-K, but suddenly I started to wonder whether I wasn't missing out on some valuable information that could help me assess the value of the company.

    Here are some ways I thought reading that section could help me.

    1. Knowing how many stock options are outstanding could help me predict how much further the stock may get diluted in the future as more stock options are exercised.
    2. Knowing how many of the stock options are exercised can help me guess how confident the employees are at the future potential of their company. Is there a good rule-of-thumb on a good percentage? 50%, 75%?

    Am I right in my thinking? Are there any other ways I should approach it?

    submitted by /u/Manticorea
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    How many of you are algorithmic traders?

    Posted: 10 Oct 2020 04:04 PM PDT

    Hey everyone! I am curious to know what percentage of retail traders are algorithmic traders. I couldn't find this stat online (if you can, kudos to you I'll thank you forever) and I can't make a poll here, so maybe you can choose between the options 1a, 1b, 1c, 2a, 2b? :)

    1. I don't know how to code (a) and prefer to invest the good ol' way, (b) and would like to learn to use it in my trading, (c) but I run a trading bot that trades for me.
    2. I know how to code, (a) but I don't use it to trade/invest, (b) and I use it to trade/invest

    You can upvote one of the options in the comments below :)


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