| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: 02 Jan 2021 02:00 AM PST If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions, you should include relevant information, such as the following: - How old are you? What country do you live in?
- Are you employed/making income? How much?
- What are your objectives with this money? (Buy a house? Retirement savings?)
- What is your time horizon? Do you need this money next month? Next 20yrs?
- 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?)
- Any big debts (include interest rate) or expenses?
- And 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 And our side bar also has useful resources. 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 [link] [comments] |
| Does the purchase of options have any affect on the price of the underlying security? Posted: 01 Jan 2021 06:34 PM PST Let's say for example that 100,000 people all bought CALL options for AMZN stock that calls for AMZN to be at $4000 a share in March of this year. Does the mass purchase of these options actually affect the value of the underlying stock? If so how? And by what mechanism is the price driven by that? To me it seems like it's just 100,000 people making a prediction but that they could all be completely off and the price is unaffected. submitted by /u/JamieOvechkin [link] [comments] |
| I built two sheets (with data retrieval scripts) to help monitor your portfolio & compare investments Posted: 01 Jan 2021 01:23 PM PST |
| Opinion on portfolio? Posted: 01 Jan 2021 08:40 PM PST Happy New Year to everyone reading this. It's 2021 and it's time to reset the portfolio. I'm 22 years old with about $34,000 CAD in the account with Questrade. Of course, I've used Nordbert's gambit on Questrade to transfer most of my wealth to USD so I can purchase American ETFs. I will be selling all of my individual stocks on Monday and completely investing in ETFs for a more hassle-free approach. I will invest in individual stocks in a non-registered account. As far as my portfolio will go, it will be heavily invested in ETFs with higher risk, but more room for growth. I would like to tackle technology, renewable energy, therapeutics, and will have some room for less riskier ETFs. As far as it goes, I don't want to touch these investments for 10+ years, except add more. My list: ICLN - 15% QCLN - 5% ARKG - 15% ARKW - 5% VGT - 15% QQQJ - 10% VUN(TO) - 25% VT - 10% Opinions, comments? Would be much appreciated. My goal is just to continuously add on to these no matter the cost. I will most likely buy everything on the market open on Monday but wanted some opinions first. Thank you! Edit: It might be too many ETFs, so I was thinking of cutting out QCLN, and ARKW. I would then transfer the remaining percentages to ICLN and ARKG, respectively. submitted by /u/DuePanini [link] [comments] |
| 2021 Market and Economic Outlook Posted: 01 Jan 2021 11:20 AM PST SPX Monthly Chart: - The market basically closed the year at ATH (3pts off) and is within a hair of 3855, which is the 138.2% Fib of the March low.
- The rising monthly channel (shown above) shows that markets are stretched near resistance and already outside of their bollinger bands. The weekly band is at 3774.
- While I believe there is room for upside into 2021, the risk/reward is NOT favorable here anymore. Sentiment is stretched and a correction would be welcomed with open arms.
- I anticipate a 10-15% correction to start the year, which would align us with the rising 200dma near 3219. We ended the year in a tight range, and there is potential to carry into 3855 based on January 15 open interest and gamma positioning.
Last few days I have been selling stocks and calls aggressively in anticipation of a correction. I am long TLT calls (flat) and SPY puts (down 37%). Sentiment: - The AAII Sentiment Survey is quite elevated near multi-year highs and shows overly bullish sentiment.
- The Advisors Sentiment Report reports the views of over 120 independent investment newsletters (those not affiliated with brokerage houses or mutual funds) and reports the findings as the percentage of advisors that are bullish, those bearish and those that expect a correction. The current Bull to Bear spread is one of the highest in decades, yet another indication of frothy sentiment.
- The NAAIM Exposure Index is currently at 89 and off some 100+ prints but remains elevated to the averages.
The BAML Fund Manager Survey shows the three most crowded trades are: - Long Tech via shares
- Short USD
- Long Bitcoin Spot via Perpetual Swaps
- Fund managers are "all-in" on leverage. This is evidenced by our DIX print on Thursday yet again showing dark pool buying.
Consumer Confidence deteriorated sharply in December, as the resurgence of COVID-19 "remains a drag on confidence." CEO Confidence, as tracked by the Bloomberg Consumer Comfort Index hit a two week low at 47. This is the sharpest drop in economic outlook since April. Market Health: Economics: - The common theme appears to be an expectation of a synchronized global growth in 2021.
- The optimism on 2021 delivering a record year for corporate profit growth and strong GDP growth around the globe is very contingent on a successful vaccine rollout. The current surge of cases and hospitalizations in the US and Europe is resulting in further restrictions and lockdowns that will weigh on growth expectations, or at least push out pent-up demand. Consumers have led the recovery so far with a boost from fiscal stimulus but the key to a self-sustained recovery is a strong capex cycle which is seen kicking off in Q2 2021. The labor market will also be in focus after record low unemployment the pandemic saw the number jump to 14.7% in April, the highest since the Great Depression, but has recovered rapidly though losing some momentum as it finished the year near 6.5% unemployment and consensus expectations to reach 5% by the end of 2021, still far-off from the 3.5% pre-crisis rate.
- The recovery has already started in 2H20 in the US & China while the European recovery has been more subdued. The driver of the strong 2021 recovery will be the full reopening of economies worldwide which makes a successful vaccine distribution critical. The US Dollar is closing 2020 weak and looks to have some structural issues with surging deficits, Fed's intention to boost inflation, easy financial conditions, and expected economic and political improvements. The combination of easy monetary policy, a rebound in old economy industries and a global upswing in growth provides a healthy backdrop for 2021. The balance sheets of households, corporate and governments are expanding alongside the aggressive monetary policy and signs of inflation returning causing a rotation back to value and cyclical growth supported by a steepening yield curve.
- GDP is seeing rising 6.4% globally in 2021 according to Morgan Stanley, the consensus is for 5.4% growth. In the US those numbers are 5.9% and 3.8% respectively.
- Inflation would be the key risk into 2021 with it likely to start showing up in 2H21, and the risk being an overshoot could start a disruptive shift in Fed policy. Surging debt remains another concern, as a share of U.S. GDP, total debt has spiked near a record high and total nonfinancial debt has surged to new all-time highs. The rapid increase in government deficits is due to the combination of 1) the budget shortfall that already existed and was growing, plus 2) the deficit spending to fund the stimulus programs to date.
- The other clear risk in 2021 is China where debt defaults are rising and could spark a move to credit tightening and a recession that would strangle the global recovery. The overall default rate is currently low but the percentage spike in debt/GDP was the highest since 2009 which could lead to policy tightening in 2021.
Market Valuation and Fundamentals: - The NASDAQ continue to outperform in 2020 with a 45%+ YTD return compared to the S&P at +15% as major secular trends in technology continue to play out. The trend of rapid rotational moves also continue with growth often seeing selling pressure for a few days before quickly recovering and resuming the longer-term uptrends. Into 2021 earnings growth is expected to be a record though room for multiple expansion is minimal. A combination of improving economic conditions causing greater business and consumer confidence should drive strong earnings growth in 2021. Increased fiscal spending and a moderation of tariffs provide additional tailwinds. In 2020 many businesses shedded labor and transformed business models to higher productivity to offset the collapse in demand and low inventories with rebounding production point to margin expansion in 2021. The 2021 environment shapes up to be one of solid earnings growth, a return of buybacks and modest multiple contraction. The growth versus value debate is likely to continue but the low-rate environment continues to favor growth, but even more-so a greater preference for quality, companies with strong balance sheets, cash flow generation, and returns on capital should continue to outperform. We are seeing historically strong earnings revision ratios and a record percentage of stocks with dividend yields above the rate of the ten-year Treasury, both conducive to allocations to equities. Compared to bonds, equities can act as a hedge in case of inflation and, with a thorough selection process, can still offer returns closer to historical returns.
- My forecasts for 2021 take into account consensus expectations, a bull case for a strong vaccine rollout, and a bear case for disruptions to the vaccine rollout and geopolicatical potential issues. I am assigning a 40% probability for the bull case, 40% for the base case, and 20% for the bear case to arrive at a S&P fair value of 3600 though 1H21. In 2H21 we start to look to 2022 estimates and feel we can approach $200 EPS with slight multiple contraction to 22X leaving upside potential to 4400 for year-end 2021.
https://imgur.com/a/QqPjfbU - For 2021, the bottom-up EPS estimate (which reflects an aggregation of the median EPS estimates for CY 2021 for all of the companies in the index) is $169.20. For CY 2021, analysts are projecting earnings growth of 21.7% and revenue growth of 7.7%. The 6% trend growth rate since the 1930s would point to S&P 500 EPS getting back to trend levels of $187 in 2022. An optimistic vaccine scenario would see S&P 2022 EPS well above $200.
https://imgur.com/a/lLhmsb3 - The low rate environment impacts the multiple, and assuming the 10-year stays low, the Fed keeps rates at zero, and credit spreads stay firm, a valuation framework would put a trailing PE at 24X and forward at 21.5X for the current environment. The spread between the S&P dividend yield versus the corporate Baa bond yield is near historical highs and the ERP (Equity Risk Premium) is very high by many measures. Assuming the spread between the dividend yield and IG corporate yield goes back to 2012-19 levels, it would point to 30%- plus upside for S&P 500 valuations. Assuming some rise in rates as the spread narrows more from falling equity yields would point to 20%-plus upside. In 2021, policy support should remain in place to curtail risk aversion. Besides the risk of a credit crisis, concerns over a late-cycle overheating have been pushed further out due to the pandemic-induced recession and policy makers' increased inflation tolerance. When comparing relative attractiveness across asset classes, which ultimately steers a substantial part of investment flows, equity markets continue to look quite attractive. Since the beginning of 2020, real bond yields in the USA have declined by over 100 basis points, outpacing the decline in earnings yields (inverse of the price-earnings ratio), thus supporting higher valuation multiples. Currently the difference between the earnings yield and the real bond yield as a measure for the equity risk premium (ERP) is higher than the long-term average, suggesting that equities offer an attractive excess return over bonds. Although lower interest rates support higher multiples due to the increase value of future earnings, a return to normal could push long-term interest rates higher and exert downward pressure on equity valuation multiples.
Sector Growth Rates Analyst 2021 Predictions: - Morgan Stanley: $3900 - After a year of big swings in valuations, 2021 will be about who can deliver on earnings. 2020 was all about beta and understanding how equity markets trade in and around a recession that handed us the fattest pitch we've seen in a decade. 2021 will be much more about stock picking (alpha) and should favor those companies that can deliver earnings growth that isn't already expected or priced. MSCO prefers companies with earnings growth most tied to re-openings and an economic recovery and also favors small caps. Financials are also preferred due to positive upside skew on rising rates and better credit; Materials and Industrials on demand rebound, earnings leverage and inflation protection; and Health Care given its GARP characteristics and re-rating potential with fading political overhangs.
- Bank of America: $3800 - Stocks have already priced in much of the expected recovery in the economy and corporate profitability, leaving just slightly more upside heading into next year. Even as investors ride a wave of vaccine-related optimism, potential negative catalysts abound. The recovery is intact and the world likely reopens in the 2H, but a lot of optimism is priced in already on vaccine/recovery. Vaccine execution risk, delayed fiscal stimulus and longer lockdowns are risks. But a few themes support stocks: the S&P 500 dividend yield is 3x the 10-year yield, and S&P 500 dividends are set to increase in 2021. And unlike bond yields, earnings are nominal and participate in inflationary upside – where inflation risks may be running higher, given rampant money-printing and a potential post-vaccine spike in demand. BAML picks value stocks over growth, cyclicals over defensives and small caps over large caps, given each of these groups' likelihoods to be disproportionately boosted by a post-virus economic recovery.
- Goldman Sachs: $4300 - A vaccine is a more important development for the economy and markets than the prospective policies of a Biden presidency. The economic reopening coming alongside a vaccine, in tandem with a status quo policy environment cemented with a divided government, will help push the S&P 500 to 4,300 by year-end 2021 and then to 4,600 by the end of 2022. The forecast assumes that the Senate will remain under Republican control following the Georgia run-off elections in January, the economy will continue on a path toward a "V-shaped" recovery, corporate profits will rebound, Fed funds rate will hold near-zero and the yield curve will steepen while the 10-year Treasury yield climbs only modestly.
- Deutsche Bank: $3950 - Much of 2020's run-up in the stock market came with multiples expansion, as prices escalated despite a drop in earnings, as companies dealt with fallout due to the coronavirus pandemic. Next year, as the economy recovers and a vaccine allows for long-lasting re-openings, earnings growth will rebound and multiples will de-rate. The pattern of the equity market recovery, bottoming halfway through recession and recouping most of its losses before it's over, has been typical but the continued run-up means valuations are high. In our reading, elevated multiples reflect increased participation of retail investors which we see as sustaining, but we expect the multiple to begin to de-rate. For 2021, a recovery in earnings — which essentially increases the denominator of the price-earnings ratio — should lower multiples. That said, an increase in companies' payout ratios as dividends and buybacks return could at least partially offset this. A gradual correction of overvaluation argues for the current overvaluation of 5 multiple points to diminish but remain significant at 3.6 points, putting the end-2021 multiple at 20.5X.
- Jefferies: $4200 - Improving prospects for a vaccine, easy lending conditions and broader participation among cyclical and value stocks will help propel the stock market higher in 2021. November's historic stock market rally, led by cyclical and value stocks in the energy, financials and industrials sectors, reflected broadening equity strength beyond just big tech and software shares. That rotation is anticipated to continue into next year, helping push the broader market higher. Notwithstanding the second and third Covid-19 waves permeating the world, there is a palpable feeling that the global economy is resynchronizing with the household, corporate and government balance sheets expanding simultaneously alongside aggressive monetary policy. The much-maligned value and cyclical growth sectors are slowly making a comeback as inflation pressures begin to return. This rotation has been supported by a steepening in the yield curve and with growthier stocks trading sideways. Improved visibility towards a successful coronavirus vaccine, easier lending conditions, little evidence of deflation and a sentiment switch from growth to value will lift US bank shares through 2021. Rising global capacity utilization rates, firmer producer prices, improving world trade volume, booming housing/autos and a weak dollar are the perfect environment for the S&P 500 Industrials. The S&P 500 materials sector is blowing off in response to a weak dollar, higher commodity prices, an upswing in global manufacturing and a restocking cycle.
- CSFB: $4050 - Our 2021 forecasts are designed to answer a simple question: what the future will (2022) look like in the future (end of 2021). From this perspective, we are forced to de-emphasize the near-term, focusing instead on the return to a more normal world. As we look toward 2022, the virus will be a fading memory, the economy robust, but decelerating, the yield curve steeper and volatility lower, and the rotation into cyclicals largely behind us. Since the stock market discounts future events, each of these prospects for further improvement down the line should translate into a higher S&P 500 as investors price in these events.
- UBS: $4100 - The vaccine-related developments that drove stocks' gains in November and early December have now been baked into market expectations, leaving vaccine distribution the next milestone for equity investors to consider in 2021. The key driver of U.S. equities will be the pace of vaccinations, similar to how shifts in mobility drove equities through the spring and summer. As people get vaccinated, they are likely to 'normalize' spending on areas impacted by COVID shortly thereafter. We see the rotation toward cyclical services spending and other COVID-hit areas as a key investment theme for 2021. UBS is overweight the consumer discretionary, industrials and energy sectors given that consumption and production will likely rebound next year. It downgraded materials and financials to Neutral. It is also Underweight consumer staples, utilities and REITs and Neutral on information technology, but overweight communication services and health care on still attractive growth relative to valuations. UBS maintained an upside case for the S&P 500 of 4,400, which would emerge in the case of higher-than-baseline growth against a backdrop of still-low interest rates. However, in a downside case, the S&P 500 could fall to 3,300, which would entail a weaker recovery and/or tighter financial conditions.
- BMO Capital: $4200 - Heading into 2021, stocks are poised to keep reaping the benefits of the massive infusion of monetary support from the Federal Reserve, along with an anticipated additional round of fiscal stimulus. This constructive policy environment is likely to help push equities higher even as virus concerns linger for at least the first several months of the new year. Even with recent positive vaccine and treatment developments, the global pandemic and its unprecedented impact is unlikely to fade in coming months. As such, the massive fiscal and monetary response in the U.S. and around the world (also unprecedented) will likely remain in place to combat its negative economic impact for the foreseeable future. Such environments have historically supported continued stock market gains and we see no reason why 2021 will be any different. Aside from the global financial crisis, 2020 represented the swiftest quarter-over-quarter earnings collapse for the S&P 500 where index EPS plummeted nearly 50% during 1Q, thus, we anticipate that 2021 has the potential to be one of the best years ever in terms of earnings growth, something we believe will also help to push stock prices higher. We remain optimistic and expect another year of double-digit gains as the economy and society slowly transition back to normal.
- Barclays: $4000 - Markets are right to be optimistic about the global economic outlook in 2021, with growth returning and inflation rising but staying below central bank targets. Projected global gross domestic product growth of 5.6% in 2021, rebounding from a 3.6% contraction this year, with most Western economies reaching so-called herd immunity from Covid-19 in the second and third quarters of the year. Forecasts reflected the recent slew of positive vaccine results with efficacy rates exceeding expectations, which point to a significant boost for growth in the second quarter of 2021. Barclays also suggested the inflation outlook would not indicate any unwinding of current unprecedented levels of central bank support. Labor markets are recovering, but we are still at very high unemployment, so there is undeniably a lot of slack in the system. That means that when it comes to core inflation and the underlying drivers, to wage costs etc., that was unlikely to happen in the short run, meaning even next year. It would take several years really to come back. While Barclays anticipates a gradual improvement in inflation, it will not be significant enough to cause central banks to consider tightening their accommodative monetary policy stances. We have an environment whereby growth comes back, inflation stays relatively muted, and you have central banks continuing to support the recovery, and tightening is still far out.
- Oppenheimer: $4300 - The S&P 500 is likely to post another double-digit percentage gain in 2021 as the distribution of COVID-19 vaccines underpins a lasting economic recovery. This outcome is based on six key assumptions: First, that the public will expediently accept and receive COVID-19 vaccines and second, that equity investors will discount the success of the vaccines in reversing the disruptions brought on by the pandemic. Thirdly assumes that at least one of the two Senate seats in the Georgia runoff election will go to a Republican lawmaker, thereby retaining their control of the Senate and reducing (if not necessarily eliminating) the risk that the Biden administration will eradicate the corporate tax reform act of 2017. Fourth, the Federal Reserve will continue its low interest rate regime in tandem with accommodative monetary policy, and fifthly, that congressional lawmakers will step in with another round of fiscal stimulus by the first quarter of 2021 at the latest. Lastly, that investor appetite will continue to tilt toward "stocks that favor diversification and both growth and value segments of the market in a relatively low interest rate environment that favors equities, real assets and other asset classes over fixed income for intermediate and longer-term objectives. The vaccine rollout is arguably the most important in determining the trajectory of the S&P 500 next year. Ultimately the stock market is broadly dependent on economic growth to drive revenues and earnings across the sectors.
- JP Morgan: $4400 - Investors are entering 2021 against a confluence of market-positive events, including improving prospects for widespread vaccinations and sustained economic reopening, gridlock in Washington and accommodative central bank policy. Given the COVID-19 crisis, vaccine distribution is likely the linchpin event. But even with widespread vaccine availability still months away, optimism over early vaccine efficacy data has already sparked a rally among stocks hardest-hit by the pandemic. The equity market is facing one of the best backdrops for sustained gains in years. After a prolonged period of elevated risks (global trade war, COVID-19 pandemic, U.S. election uncertainty, etc.), the outlook is significantly clearing with the business cycle expanding and risks diminishing. We expect a 'market nirvana' scenario for equities with the melt-up continuing into 1H21, driven by earnings recovery and multiple expansion. Much of next year's stock market rise is likely to come at the beginning of the year, as lingering uncertainties over vaccine distribution, the results of the Georgia senate race and additional monetary and fiscal stimulus start to dissipate. While the broader backdrop should still remain constructive in the second half of next year, by then the market will have likely priced in close to a full recovery and investors may start to expect a gradual shift in central bank forward guidance away from the current exceptionally accommodative stance.
- BTIG - $4000 - Global synchronized growth underpinned by central bank ease and a Washington which sees Election 2020's decidedly mixed outcomes as a catalyst for cooperation (spend, it's necessary) and centrist government (no tax hikes) results in a Redistribution of Wealth consistent with the 2003-06 synchronized reflation period where Value outperformed. Growth, Small Cap outperformed Large Cap, and International equities outperformed the S&P 500.
Gold: - Monthly
- Gold had a solid year in 2020 gaining more than 20% as a long base breakout that triggered in June 2019 continued to play out higher and reached its measured move objective while the rally briefly broke above 2011 highs before pulling back. If we look at Fibonacci extension targets of the 2011-2015 correction GLD has upside targets at $207 and $220. The 2018-2020 rally has Fibonacci retracement support levels at $162.5 and $152.5. Gold rallied in 2020 on economic uncertainty and a flight to safety and has pulled back in Q4 with the greater optimism for 2021 taking hold. On an allocation basis, Gold may be losing some of its luster as a store of value with the momentum seen in Bitcoin , although that has not been seen to this point with global gold ETF inflows topping a record in 2020 as a way to diversify portfolios and hedge against inflation. However, November saw the second largest outflow on record. In 2020 the lockdowns resulted in a 5% decline in global output, so the supply-side is expected to rebound in 2021. Gold prices should be supported by inflationary pressures, a deep fiscal deficit and a weaker USD. Goldman sees Gold reaching $2300 in 2021 as recovery from the coronavirus-related recession fuels higher inflation next year. Further fuel could be added from a recovery in demand from India and China.
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| Is it prudent to open a second account for Day trading (Separate from your regular investing account?) for Easy tax filing? Posted: 01 Jan 2021 09:27 PM PST Hi all, I apologize in advance if this has been answered. Searched this sub for something related to this, but couldn't find any. I've learned a lot from this sub and thought if anyone knew this on reddit, it would be you all. I was reading up on investing related stuff online/YouTube; and I came across a video of someone suggesting that it's good to have your Swing/day trading account separate from your brokerage account as it makes filing taxes much easier, especially fi you might be trading the some of the same stocks that you might have in your long term investment portfolio. Some backstory/Context. I have recently opened a TDAmeritrade account, mostly for day trading/Swing Trading (haven't started trading yet, and am planning to start real slow/small) but given that I like their platform's research/tools much more over Robinhood, am planning to migrate most of the stocks I hold in Robinhood over to this in a later date. So, would it make sense for me to create a second TDA account and migrate my existing stocks to that then? or it should not matter? Personal Take: I would imagine that there must be some tools/method to figure out what are long term vs short term trades to help with Taxes. Given that this should not be the first time anyone ran into this issue/question and I'd be surprised that there are better ways than "oh lets open a second account to make taxes easier for day trading/Swing Trading". Would love to hear your thoughts/Best practices. Thank you in advance! Bonus question :P From what I read, TD Ameritrade only covers up to 500K in spic insurance. Is it worth getting some supplemental insurance when your total account grows more than that? just curious PPS: Not sure if this falls under the beginner question category. Happy to move it to the stickied Daily thread if that's the case. submitted by /u/PcGamer86 [link] [comments] |
| How every asset class, currency and S&P 500 sector performed in 2020 Posted: 01 Jan 2021 12:11 PM PST |
| Smartest way to invest while working abroad as an American? Posted: 02 Jan 2021 03:01 AM PST I've been working abroad for over 10 years. A few times, I tried to set up a Roth IRA account but apparently we have large limitations due to Foreign Earned Income Exclusion. I earn less than $102k and was wondering what other people on the same boat are doing. submitted by /u/demonic-confederacy [link] [comments] |
| Averaging up with DCA Posted: 02 Jan 2021 12:53 AM PST I will keep this short.. I have been on the sidelines since March and have painfully seen the markets reach new highs. Now, I see no sign of this growth stopping and decided to step in. However, instead of buying stocks at one go, I am planning to do a DCA. My question is this: By starting a DCA now, am I taking the risk of averaging up? FYI..the timeline I have set for my investments is around 5 years from now. submitted by /u/scum_on_earth [link] [comments] |
| When are treasuries the right move? Posted: 02 Jan 2021 01:27 AM PST I spent a lot of today learning about some less popular investment vehicles, and treasuries seem interesting. you basically lend the government money but make no money from interest in a low interest rate environment, since they match the fed interest rate pretty close. So, what I am seeing is basically: getting a payment directly from federal government means you are protected from bank failure (helpful in 1929, not so much now) they probably wont match inflation if the inflationary scenario plays out, but they could be slightly better than holding cash if a severe deflationary scenario plays out I definely don't see it as beating gold or btc for next few years. This is all based on google searches and youtube videos, so please, if anyone knows any other use case to support buying treasuries in the near future, I would love to hear it submitted by /u/CriticalSodium [link] [comments] |
| New to investment - need some help with mutual funds Posted: 02 Jan 2021 01:52 AM PST Hello r/investing, I recently came into a sum of money 25-30k from my aunt who passed away. I already have my 401k invested at fidelity, but I've been looking into Vanguard's mutual funds to develop a nest egg for myself. Basically, I've been researching different funds to put this money into. I've read that a good diverse portfolio has a US market fund, a world market fund and investment grade bonds. Is this sound advice? I would appreciate any and all insights that you guys could give me, as I'm pretty much a newbie at this. Are there any resources you all rely on or trust more than others? Thank you all so very much! submitted by /u/floyd4life76 [link] [comments] |
| If I knew which companies will join S&P 500 in near future could I make money? Posted: 02 Jan 2021 03:48 AM PST So if I understand correctly each quarter S&P 500 is rebalanced. Some stocks may join, some stocks may be kicked out. Many people and pension funds just blindly invest into S&P 500 no matter what because they don't have time to pick stocks. So a company joining the index should have an immediate effect on the demand without a corresponding change in supply leading to a sharp increase in the price. So if I could somehow predict who is going to be in S&P 500 I could preemptively buy their stock and sell immediately after the quarterly rebalancing? Or is the market already saturated with people doing exactly the same? submitted by /u/Fabulous_Leading5944 [link] [comments] |
| Why Prosus NV stock (Euronext Amsterdam: PRX), almost 1/3rd owner of Tencent is a hidden gem Posted: 01 Jan 2021 09:20 PM PST Prosus NV is a holding company mostly and a spinoff from South African holdings giant Nasper. And Prosus holds some companies that are poised to grow. Its portfolio. You must see this before reading further. And this image is all the information you need really to value the company. The extreme discount So, let's do some maths. Prosus holds around 31% stake in Tencent maybe(I haven't checked recently if anything changed, but it shouldn't). So, Prosus's stake of Tencent is higher than $216B+ even after the sell-off from the Alibaba chinamama news cycle. Yet the market is valuing Prosus stock at around $175B+. Now, Prosus's other holdings like Delivery Hero, PayU etc is surely not of negative value? Analysts put a valuation of around $30B for a collection of Prosus' e-commerce portfolio. But who knows. I mean if all of them IPOed in this hot market, I can't even predict what their valuations will be. Analysts Management knows that this stock is being underpriced for stockholders and that's why they were almost forced to issue a buyback worth $5B just like the holdings company Berkshire Hathway (which is also a good way to own AAPL). Bull case - But if anything, I see ALMOST all of Prosus's holdings growing significantly in the upcoming 10 years. I have done some extensive DD on some of their holdings(not all, I repeat). And I am extremely bullish on this holdings company because I think the management gets what sort of investments work in the 21st century. It's kinda like buying Ark ETFs with a margin of safety. Or kinda like buying a modern version of Berkshire Hathway. Whichever analogy fits your way.
- Prosus is also quite heavily invested in China and India. I guess you know what that means.
A starting point for further research on this company. (pdf) Prosus is still not included in most of the European ETFs(where most investments go), when or IF
it gets included, the discount between its book value and market value would probably decrease. Almost no retail investor knows about Prosus. Spreading the pieces of information would definitely help increase its stock price. lol. It's being said by some peeps(or shills) that the Euro and Yuan would gain against the Dollar for the next two-three years. Dollar has already declined a lot. I am not sure if the dollar really would decline further but when enough people start to believe something that something may eventually become the reality; remember that OG mama printer Janet is coming to the office. So, this stock could be a good way to hedge returns. - Prosus' management is not insane like Softbank's management. Sure, they are also not as conservative as Berkshire. But if they were, they would have missed all the boats. They are somewhat middle in the risk spectrum between Berkshire and Softbank, which is my ideal management, really. Your cup of coffee may vary.
Risks: - I accept it. Prosus NV is currently just a roundabout way of buying Tencent holdings(which also partly owns JD, Mairuan etc) instead of buying it from the Hong Kong market. Sure, some of their holdings can keep on growing exponentially and indeed they will. But right now, Prosus is just owning Tencent. So if you hate Tencent (or China), avoid Prosus, by all means.
- The bull case number 5 could actually turn into a bear case if the narrative surrounding the dollar changes.
- The holdings company discount could continue to widen or remain high for lack of enthusiasm, market float etc.
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| RLH Corporation Announces Agreement to be Acquired by Sonesta International Hotels for $3.50 Per Share in Cash; Transaction Valued at Approximately $90 Million Posted: 01 Jan 2021 06:16 PM PST https://www.yahoo.com/now/rlh-corporation-announces-agreement-acquired-015900970.html I found this company months ago and decided to pass on it. The company isn't exactly the strongest one (in their 10-K they mentioned as a risk factor that their executive leadership doesn't have a lot of training in this field so they may make some mistakes). They're being bought out at a heavy discount to their book value. Out of the past 10 years only 4 of those years had positive net income and FCF wasn't exactly stellar either. But I can't imagine acquisitions are always done sensibly. The hotel industry may be seeing consolidation now so they can compete better in the coming years after COVID and trying to make back lost revenue. Was anybody holding $RLH? The stock shot up almost 30% yesterday on the news. submitted by /u/howtoreadspaghetti [link] [comments] |
| A potential winner for 2021 Posted: 02 Jan 2021 02:58 AM PST Clean energy fuels(CLNE)is one of the leading provider of CNG and LNG fuels.It's partners with chevron, Total and now BP. Clean Energy is contracted by the New York MTA, New York Sanitation, UPS, FedX and other companies in the United States and Canada. Infrastructure in place to dominate once hydrogen fuel becomes a useful product. (My opinion) submitted by /u/whoyoubetoday [link] [comments] |
| Passive income vs. Capital gains? (CANADIANS) Posted: 01 Jan 2021 04:51 PM PST Which is better? I understand one may be better tailored depending on your personal needs. Im asking this question on behalf of the general public which would be long term investors. Since im canadian we will assume all canadian laws and regulations apply (tax etc) Would it be better to say own an ETF like ZSP.TO providing a yield YTD of 13.75% with a 0.08 MER. or to own blue chip high dividend yielding companies like TD, BNS, CM, RY, BMO, FTS, BCE, TRP, SRU.UN with money in each sector giving finance and real estate the greatest capitals...followed by communication/utilities/energy (arranged how i like my risk to be). Just spitting out numbers here these companies are still way undervalued so there are capital gains to be made here. However on an annual basis you can look to make on average 6-7% return (when these stocks are not on discount like now) which includes both dividend and capital gains. Less tax you may have a 5% gain. Now you may say that it is a no brainer you would pick a 12% return after tax (assuming you sell) but the difference here is that the S&P has a much higher PE ratio than the TSX. I dont want to market to enter a correction with all my money in one ETF suffering and providing no income. I see having the high dividend yielding stocks would provide more safety than simply tracking the S&P 500. Atleast if prices crashed, it would provide with a dividend payment till things got back on track. If it helps to answer my question im young (22) and have over 6 figs invested into individually picked stocks currently up 19.75%. For only starting to learn all of this stuff in march i think im doing pretty good! Im learning the more you touch your investments the worse i perform lol. Staying away from short term volatility playing is the best option for most traders. I want to know if i want to make tons of money (obviously) is it best to go for ETFs or dividend stocks? This invested money will be put away for LONG. I plan on adding 6K to my TFSA, 6K to my RRSP and 12K to my margin account per year. Thanks. GLTA. submitted by /u/HomosapianDaGreekGod [link] [comments] |
| Following the herd? Posted: 01 Jan 2021 12:49 PM PST I keep seeing posts of the same companies/ETFs recommended on here: TSLA, ARKK, NIO, AAPL. I'm not sure if following the herd with everyone saying how easy it is to make money is a smart decision. I'm still a beginner investor, but will I be following the herd off the 2021 cliff? submitted by /u/dakinerich [link] [comments] |
| Update on Chinese delisting of $CHU, $CHL, $CEO...it also affects any ETF's holding these! $FXI, $ASHR, +more Posted: 01 Jan 2021 03:28 PM PST |
| Invest in NBA player PJ Washington Posted: 01 Jan 2021 01:07 PM PST here's a new one: you can invest in NBA player PJ Washington: https://wefunder.com/pj-washington it looks like you are getting preferred shares in a corp with 5% dividends backed by his endorsement money, but I didn't read it in too great of detail. I'm passing on this one, but maybe someone will find it interesting. submitted by /u/ron_leflore [link] [comments] |
| Newbie investor looking for advice and critiques on my portfolio Posted: 01 Jan 2021 08:04 PM PST I've done a decent amount of research over the last few months and think I have come up with a spread to cover most sectors with an emphasis on growth sectors. Open to any and all suggestions, critiques and advice. 30, Independent Contractor (Real Estate Agent), ~ $125,000 - $150,000 Income. Have an emergency fund put away and looking to allocate 30% of commission checks to Brokerage Account and 10% to Cash savings plus maxing Roth IRA annually. Roth IRA: Just starting one, $12,000 ready to max out 2020 and 2021. - VTI 40% - VXUS 40% - VBTLX 20% (is this necessary?) Brokerage Account (Charles Schwab): - VTI 30% - VXUS 20% - ICLN 20% - ARKK 10% - ARKG 10% - ARKW 5% - CLOU 2.5% - CIBR 2.5% Individual Stocks on Robinhood: - NIO (200 Shares) - PLTR (200 Shares) submitted by /u/recess24 [link] [comments] |
| What are post-pandemic stocks to watch? Posted: 01 Jan 2021 01:32 PM PST The need for a damned good party I read this article about post-pandemic life and it got me thinking about which stocks could perform extremely good during these times, the same way some stocks performed extremely good during the pandemic. I have some ideas about stocks to watch in a post-pandemic world, but I am curious to see what you have to say, and more specifically why. submitted by /u/Necessary_Mongoose71 [link] [comments] |
| ����ALERT���� weBuLL accounts Posted: 02 Jan 2021 02:29 AM PST Unfortunately, I have been short many stocks since 2018 with weBuLL. Late 2019, I noticed a htb tag next to my short shares. I contacted weBuLL and they said would not be charged a htb fee. Over time, a htb borrow tag has popped up on many of the stocks I'm short. I just noticed that they charged a htb fee for the first time in one year after emailing me and saying they do not charge htb fees because they are a free trading platform. Just thought you guys should know. I'm waiting on a response. submitted by /u/Un-Scammable [link] [comments] |
| What should I know before reading The Intelligent Investor? Posted: 02 Jan 2021 01:41 AM PST It's been about 10 months since I've opened an account to invest in the stock market. Since then, I read beginner books on all of the different ways I can buy and sell stocks, and also a few tips here and there. I got The Intelligent Investor (revised edition) for Christmas and was wondering what I should learn before diving into it. I have a feeling I might not understand the jargon that'll be used in the book so I wanted to teach myself beforehand. I appreciate any help! submitted by /u/MoveZneedle [link] [comments] |
| �� In preparation of LOST DECADE or few... how do we NOT LOSE everything? Posted: 02 Jan 2021 03:16 AM PST I'm no investing expert, but I listened to those who are and here are some conclusions (please correct me where I'm wrong). With current frothy market valuations we have less expected future returns from the market. That's just maths. (The higher the asset is valued, the less future return you can expect from it) In recent interview Charlie Munger says next decade we will be getting lower returns. Ray Dalio shared similar view. If hyperinflation happens (unlikely, but some conspiracy theorists do claim it can be the case) stocks might rise against USD, but purchasing power will fall, so stock investors will still be left behind. Investing in speculative SPACS, TSLA valuations, TikTok/Youtube investing channels, Robbinghood WSB gamblers, margin traders: all symptoms of an ecstatic market. Could go on for a few years still, but overall these are signs or overheated market. Lost decades have happened before and surely will happen again and time is about right. (What would magically make this time different?) But how do we PROTECT ourselves against this and even THRIVE during a lost decade? I assume we have no ability to time the market (good for you if you have). One conclusion is DIVERSIFICATION. But apart from a diversified total world stock index, where can we put our money? Bonds? The yields are low and if yields are increased bond indices will fall. Real estate? Yes, real estate will indeed keep up with inflation, but it is not that easy to purchase for average investor, not liquid and also has risks like increased taxes, amortisation, upkeep, geopolitical risk for people living in potential warzones, etc... Gold? Not an income producing asset. Maybe 5% of portfolio? Bitcoin. Also not an income producing asset, but makes more sense than gold. But again, normally you would invest 5% MAX in something so speculative. Cash? Will be eaten up by inflation. Pretty much losing money by doing nothing. Value stocks? Probably the answer, since historically statistically value stocks have returned more than growth stocks (yes it sounds like a paradox, but statistics prove it). Relevant video: https://www.youtube.com/watch?v=UZnVt_CvL3k Here is THE PROBLEM if you want to invest in value stocks. You have to have ability to pick them. But why go through all the learning if you can just outsource it to Warren Buffett and buy Berkshire Hathaway? One reason might be that you have advantage over Berkshire Hathaway by being able to pick value stocks in smaller market cap markets which are inaccessible to BRK due to their size. Problem is - due to information abundance value investing strategies are public information and therefore already priced in at least partially. As a value investor in 2020 you have less chances of outperforming the market compared to value investor in 1950s. Any dude in slums of India can watch Sven Carlin, read intelligent investor and decide to become a value investor, so there are serious doubts that average, common investor from reddit will be able to outperform. There are a few more reasons to consider Berkshire: by Warren Buffett and Charlie Munger passing away in next decade most people assume Berkshire will suffer, but in fact, I think the OPPOSITE will happen: Berkshire will PUMP. Because markets do the opposite of what normies think will happen. Warren Buffett dies -> Berkshire repurchase their stock -> normies realise that the Berkshire can function very well without WB and that his knowledge has been fully passed on to those in charge -> normies rush into Berkshire. Berkshire outperforms S&P during next decade. Realistic or stupid? TL:DR version: Value stocks historically return more than growth stocks and since lately value has been lagging behind and since we are bad stock pickers, shouldn't we just buy Berkshire Hathaway? What am I missing? What other options do normal investors have? I'm not talking about billionaires who can buy sports teams and so on, but normal people on reddit. submitted by /u/SelectAllLemons [link] [comments] |
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