Daily General Discussion and Advice Thread - January 10, 2022 Investing |
- Daily General Discussion and Advice Thread - January 10, 2022
- Pardon my interruption, but we are not in a bear market. Not even close.
- Cash is only thing holding value in inflation-scared market? Weird.
- Take Two Interactive ($TTWO) to purchase Zynga in $12.7 billion deal
- The tech stock I'm currently looking at is approximately 72% down from its 52 week high, as I'm sure there are also many of you looking at similar numbers for other tech stocks. My question is, do we wait for the first sign of a green future in order to invest or do we just DCA in as it's falling?
- Last week the bond market got annihilated
- What Is Your Outlook On Paypals Current Stock Situation? Almost 40% below 52 weeks high
- Intel Drops A Bomb On The Robotaxi Industry
- In prepared marks for his Senate confirmation hearing Tuesday, Federal Reserve Chair Jerome Powell said the central bank will prevent higher inflation from taking root
- ReNew Energy Global, do these numbers make sense?
- Would you consider β and cov where making investment decisions ? Is that true that investors should take risks ?
- The Myth of the NASDAQ Bear
- Make the move to invest in rental property or continue with 401k/stocks?
- Are we heading into taper tantrum 2?
- Trading stocks on mobile apps when you have assets in two countries
- Largest position for 2022?
- S&P 500 vs. MSCI World - what am I missing?
- Best vehicle for short term (3-5 years) growth and preservation of savings?
- What is your investing philosophy?
- Which sector would benefit most from the US complete commitment to renewable energy?
- Question: Shorting Against the Box
- Daily General Discussion and Advice Thread - January 09, 2022
- Portfolio Rebalancing strategy
- What are the downsides to something like VFTAX?
| Daily General Discussion and Advice Thread - January 10, 2022 Posted: 10 Jan 2022 02:01 AM PST Have a general question? Want to offer some commentary on markets? Maybe you would just like to throw out a neat fact that doesn't warrant a self post? Feel free to post here! 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:
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! [link] [comments] |
| Pardon my interruption, but we are not in a bear market. Not even close. Posted: 10 Jan 2022 10:29 AM PST I recently wrote that too many on this site have never experienced a market crash. The link is here: https://www.reddit.com/r/stocks/comments/ru0ic7/too_many_of_you_have_never_experienced_a_stock/?utm_source=share&utm_medium=web2x&context=3 Now, I am beginning to believe that too many don't know what a bear market is. Bear markets occur when prices in a market decline by more than 20%, often accompanied by negative investor sentiment and declining economic prospects. The S&P 500 closed at an all-time high on January 3, 2022, at 4,796.56. We are now at 4615.50 midday on January 10, 2022. We are only down 3.8%. That is nowhere near the 20% to qualify, and it doesn't even qualify as a correction (-10%). In the meantime, people need to chill, stick with fundamentals, and focus on quality. [link] [comments] |
| Cash is only thing holding value in inflation-scared market? Weird. Posted: 10 Jan 2022 08:12 AM PST My portfolio is a split between stocks, bonds, gold, and some crypto. Over the last week, everything is down a fair amount since the Fed announcement about raising rates to fight inflation. Stocks, gold, and crypto have all been touted as inflation-hedges, while cash has no possible upside versus inflation, yet cash is out-performing all of them lately. The only thing I can figure is the market thinks the Fed will be able to tame inflation soon, so cash will benefit at the expense of everything else. Or is it just when there's enough fear in the market, people just sell everything and ask questions later? I think it shows that predicting what the markets will do is a fool's game. Inflation is the financial boogeyman right now, but cash is the best-performing asset at the same time ¯\_(ツ)_/¯ [link] [comments] |
| Take Two Interactive ($TTWO) to purchase Zynga in $12.7 billion deal Posted: 10 Jan 2022 04:52 AM PST From CNBC: Take-Two Interactive is buying mobile gaming company Zynga for $12.7 billion, marking the latest blockbuster acquisition in a string of major deals in the video game industry. The company announced Monday that it would acquire all outstanding shares of Zynga at $9.86 a share, a 64% premium to Zynga's closing price Friday. Shares of Zynga skyrocketed 49% in U.S. pre-market trade. "This strategic combination brings together our best-in-class console and PC franchises, with a market-leading, diversified mobile publishing platform that has a rich history of innovation and creativity," Take-Two CEO Strauss Zelnick said in a press release. Actual article here [link] [comments] |
| Posted: 10 Jan 2022 07:54 AM PST The stock I'm looking at is Opendoor (OPEN). I would have been happy buying in the mid teens, and I was accumulating cash to do so when the recent bear trend went in to overdrive. I still have the cash sitting on the sideline, but I'm wondering whether it's better to wait for a green "bounce" or slowly DCA in my cash? How much more room is there to go down for these non-FAANG stocks? Would anybody like to suggest better value out there? [link] [comments] |
| Last week the bond market got annihilated Posted: 10 Jan 2022 01:49 PM PST 30-yr was down 9.35% (worst week since at least 49 yrs) 10-yr down 4.24% (only worst week was when Volcker announced funds rate were headed to 21%). 4.24% as a standalone year, would be the fifth worse. And they lost that amount in only one week, last week. 10-yr TIPS down 6.09%, worst week when Lehman went kaboom (down 7.43%) and on the week ended on the 3/13/20, when the FED announced a $100B/day QE due to COVID (TIPS lost 14.39% in one week). When bond market falls, usually the stock market will follow. (e.g. stock market peaked one year after the bond market peaked in '06, or the stock market bottomed in '09, while the bond market bottomed in Q4 of '08) More info: https://twitter.com/biancoresearch/status/1480245524028706820?t=DQmNMsMQvmGng3PYT6MTFw&s=19 [link] [comments] |
| What Is Your Outlook On Paypals Current Stock Situation? Almost 40% below 52 weeks high Posted: 09 Jan 2022 08:18 PM PST I've seen a lot of positive information about Paypal's stock and what the future might hold for Paypal especially with Venmo hitting Amazon; however, it seems every other day it's 3 steps forward and 3 steps back as Paypal stock sits between 180 and 195 for a single share. What do you guys think about Paypal as a company currently? and what do you think as far as stock price within the next year or two? [link] [comments] |
| Intel Drops A Bomb On The Robotaxi Industry Posted: 10 Jan 2022 08:02 AM PST Original article at Seeking Alpha (non-paywall link): https://archive.is/CUIAS Intel Drops A Bomb On The Robotaxi IndustrySummary
Investment ThesisIn a significant bit of news that likely went largely unnoticed by the investment community, not Tesla (TSLA), Nvidia (NVDA) or anyone else, but actually Intel (INTC) Mobileye achieved a major milestone in late 2021 by going into volume production of its camera-only SuperVision autonomous driving system. Combined with Mobileye's robotaxi business that will start operating in two international cities in 2022 (based on a camera-based system combined with a lidar and radar-system), this means autonomous driving has finally gone from the lab to the fab, and is poised to contribute billions or even trillions in value to the economy as the technology gains scale in the coming years and decade(s). In addition, perhaps the most significant news from CES this week was the announcement of the world's first L4 consumer AV, slated for an early 2024 launch, yet again beating others such as Tesla to the punch. As such, Mobileye could become one of the new Big Tech companies as the backbone of the 21st century autonomous transportation system. Hence, I initiate Mobileye (which will IPO in mid-2022) at a $1T market cap target, which could represent 20x upside from its suggested $50B IPO. BackgroundWhen people talk about autonomous driving, there is one myth that is often discussed: the need for compute (measured in TOPS). For that reason, many investors have pointed to Nvidia as a beneficiary of autonomous driving. For example, NIO (NIO) uses 4x Nvidia Orin SoCs in its upcoming ET7 NIO Autonomous Driving System, for a grand total of 1 POPS (1000 TOPS), combined with over 30 sensors including lidar. I provide this comparison to give the reader an impression of just how impressive Mobileye's approach is: Mobileye's SuperVision, which has gone into production in late 2021 in the Geely Zeekr 001, leverages just two EyeQ5 SoCs for a grand total of 30 TOPS. Nevertheless, despite having over 30x less compute resources, Mobileye achieves pretty much exactly the same (or even more advanced) capabilities as any other car currently in production. Mobileye's system also uses about 3x less sensors since, similar to Tesla, SuperVision is completely camera-only (using seven cameras and four parking cameras). To be specific, the SuperVision allows for completely hands-free driving (like a robotaxi or "full self-driving"). (The reason the system is nevertheless classified as L2+ is because it isn't validated for the safety requirements for L4.) In other words, it really matters what one does with the compute resources available (the software), and Mobileye has proven for years that it can do more with less. What this means is simply that Mobileye's software is much smarter since it can more effectively make use of the available compute. Mobileye's CTO has recently provided a deep dive into the SuperVision system, which is worth watching to see the system in action in cities like Paris and New York City. Note that no other company in the world has been testing its autonomous driving system in as many locations as Mobileye, another testament and proof point of Mobileye's ability to scale its system, which I further detailed previously: Waymo May Be Disrupted By Its Inability To Scale (NASDAQ:GOOG). Consumer AVsSuperVision is still just a L2+ system: despite being fully capable of autonomous driving, it has not been validated for the reliability requirements for the "holy grail" L4. So admittedly, it will still take a few years for autonomous driving to become a reality for consumer: Mobileye is targeting 2024. In its L4 system, in order to reach the required reliability, Mobileye will combine the camera-only SuperVision system with a second system based on lidar and radar (similar to its approach in robotaxis). Mobileye has even suggested perhaps there could even be three subsystems if the lidar and radar are further split into separate systems, which will become possible due to Mobileye's in-house lidar (based on Intel's industry-leading silicon photonics) and innovative high-resolution in-house software-defined radar. Mobileye especially sees the high-res radar as promising to reduce the cost for affordable AVs since radar is inherently 5-10x less expensive than lidar. So although it could be debated if and to what extent the recent SuperVision system counts as "full self-driving", it nevertheless serves as a first proof point that autonomous driving has finally gone from something that perpetually seems five years away, to a tangible commercial reality. In any case, Mobileye's grand announcement at CES was its very first L4 design win with Geely Zeekr, slated for early 2024. This system will be based on 8x EyeQ5 SoCs (or about 120 TOPS). Mobileye further announced its next-gen SoC for widespread adoption of AVs starting in 2025. The EyeQ Ultra is touted as Mobileye's AV-on-a-Chip, providing all compute resources in a single chip. It is one of the most heterogenous chips ever created, containing CPUs, GPUs, NPUs, FPGAs, VPUs and more.
RobotaxisIn addition to extending its current industry-leading position in ADAS into AVs, Mobileye saw several years ago that autonomous driving would first start with robotaxis, and has likewise been investing to lead this new industry (as evidenced by the 2020 Moovit acquisition for example). Mobileye has been testing its robotaxis for many years in Israel, expanded its testing to Munich/Germany in late 2020, and further expended testing to many other cities in 2021, including in Detroit, Paris, Asia, Tokyo and New York City. This will culminate in the initial robotaxi launch in Tel Aviv and Munich in mid-2022, which is on schedule to what Mobileye has been saying since 2018 (!). This can't be emphasized enough since in the same time frame, virtually all of Mobileye's competitors including Google (GOOG) (GOOGL) Waymo, Tesla and GM (GM) Cruise have seen delays to their programs. Mobileye is on track to what it said four years ago, and is targeting an international rollout from the start (made possible due to Mobileye's unique global mapping approach as opposed to the legacy geofenced approach). ADASMobileye also announced several extended ADAS partnerships at CES, including ones to bring its REM mapping for lane-centering ADAS to Volkswagen (OTCPK:VWAGY) and Ford (F). Mobileye further announced that it had achieved 41 design wins totalling 50M units in 2021. For comparison, Mobileye shipped its 100 millionth EyeQ in late 2021. 200PB of dataOne oft-heard argument is that supposedly only Tesla has the data and has the Dojo supercomputers. This is false, as Intel detailed Mobileye has 200PB of data and 500k CPU cores:
ValuationGiven Mobileye's nearly flawless execution to its comprehensive vision and strategy, Mobileye is quickly establishing a tangible leadership position in both robotaxis and consumer AVs. As such, I would argue that Mobileye deserves a premium valuation as one of the upcoming new Big Tech companies. As such, the sky is the limit. For example, Tesla investors for years have attributed trillion-dollar valuations to the company based on the promised (but never delivered) 1 million robotaxis in 2020. Clearly, not Tesla but Mobileye is now making this premise a reality. Investors should note that robotaxis are inherently poised to be very profitable since they remove virtually all opex costs, by removing many thousands (if not millions) of drivers from the (transportation) economy. This will make robotaxis both cheaper and more profitable than legacy ride-hailing services like Uber (UBER), Lyft (LYFT) and DiDi (DIDI). As such, there is indeed no reason why Mobileye shouldn't be able to aspire to this $1 trillion market cap target, which is indeed the target I initiate Mobileye coverage at. RisksGiven Mobileye's progress on the technology side, which as detailed is now being translated into numerous commercial deals, the main risk now is regulation. However, Mobileye has already said it is on track to operate its robotaxis in Germany and Israel without safety driver by the end of 2022. Investor TakeawayAlthough the Geely Zeekr 001 launch with Mobileye's camera-only autonomous driving system went largely unnoticed, it represents a significant first milestone towards the ultimate blue sky vision of an economy based on driverless transportation, freeing up potentially many millions of jobs. The value this creates will be immense, and hence Mobileye, as the leader in driving this revolution, should be valued exactly as such. The next milestone is slated in the next few months already with the start of Mobileye's international robotaxi business. The next milestone after that will be the completion of Intel's in-house lidar and radar, which will bring the cost down to levels suitable for mass production in consumer vehicles. This is targeted for early 2024 (also in partnership with Geely Zeekr), and will likely be the world's first commercial L4 consumer AV. Hence, autonomous driving is quickly becoming a commercial (and profitable) reality, for which the mid-2022 Mobileye IPO provides investors with potentially one of the best investments for the coming decades. Disclosure: I/we have a beneficial long position in the shares of INTC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. [link] [comments] |
| Posted: 10 Jan 2022 09:47 PM PST Federal Reserve Chair Jerome Powell said the central bank will prevent higher inflation from becoming entrenched while cautioning that the post-pandemic economy might look different than the previous expansion. "We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched," Powell said in a brief opening statement prepared for delivery at his confirmation hearing before the Senate Banking Committee. "We can begin to see that the post-pandemic economy is likely to be different in some respects. The pursuit of our goals will need to take these differences into account," he said in the remarks, released Monday ahead of Tuesday's hearing. [link] [comments] |
| ReNew Energy Global, do these numbers make sense? Posted: 10 Jan 2022 03:50 PM PST Solar company in India, aggressively adding to their portfolio, with about 10GWh of operations Market Cap: ~3 Billion Revenue: ~50 Billion Revenue Growth y/y: ~20% Cash: ~64 Billion Debt: ~390 Billion For comparison, Canadian solar has half the market cap, 2.2 billion debt, ~900 million cash, and only 1 billion in revenue. I just skimmed over this and was curious if these numbers are fudged or if it is worth doing a deep dive/seeing if anyone else has an opinion on the stock. [link] [comments] |
| Posted: 10 Jan 2022 02:50 PM PST Would you consider β and cov where making investment decisions ? What's are the pros and cons? β substitute average return of the market. The market demand higher return for higher β stock that mean high covariance with the market stock. While low β means low risk contributing portfolio, the investor willing to take 0 return for law β? As the investor should choose the low cov when making investment decisions? Why there is a concept saying "you need to take high risk to get high returns, but the investors actually choosing low cov? [link] [comments] |
| Posted: 10 Jan 2022 02:34 PM PST I'm one of those people where when I hear something, I will actually research the claim, and see for myself. Lately, I am seeing claims that the NASDAQ is in a bear market territory, and if not, it's in a corrective territory. I disagree. On November 19, 2021, the NASDAQ 100 hit a closing high at 16,057.44. As of the close on January 10, 2022, it is sitting at 14,942.83. That is a 7% overall drop. But let's look at the details.
But wait, there's more. Of the 59 companies that actually have earnings and P/E ratios under 45, the average component has a gain of 1.38%. I would suggest that it is the garbage market that is in a correction phase. [link] [comments] |
| Make the move to invest in rental property or continue with 401k/stocks? Posted: 10 Jan 2022 03:07 PM PST Buy a rental property or invest in stocks, IRA? Hello all! I've recently found what I believe is a good opportunity to buy a single family home that I would turn into rental property. House needs a decent amount of work and isn't in the best of areas. They're asking 78k for the house (I'm sure I can get them lower), I'm estimating maybe 20k in work needs to be done and the house sits on a 1/3 of an acre. Rentals in the area go for around 1,000 - 1,200 a month in rent and I should be able to do most of the work myself. That is unless unexpected problems arise. The work that needs to be done consists of new floors around the house, new AC unit, painting all the walls, I'd like to replace the wood panel interior walls with sheet rock, kitchen appliances, ceiling fans, washer dryer and it does have roof damage from a storm that is definitely leaking into the house. I didn't see any signs of termites but the design on the added on to room to the house definitely makes it prone to termites. So given this short and sweet summary... at the age of 27 would it be a good move to buy this property and turn it into rental in come or continue to invest in my portfolio. My 401k, and stock/crypto portfolio have been doing really well but the current situation of the market has me feeling like now isn't a good time to buy. Plus diversifying is never a bad thing and if there's one thing I know in life it's to always have your money work for you. So please share your thoughts on what you would do! I feel like this is a good opportunity but I'm posting this to a few subs and searching for advice anywhere I can get it. Sorry for formatting and any typos, I'm on mobile Thank you! [link] [comments] |
| Are we heading into taper tantrum 2? Posted: 09 Jan 2022 09:37 PM PST given the fears of rising interest rates, it feels like we very well may be heading into another showtime run of a taper tantrum again. I expect Monday will be down as well. If anything though, if you've invested in solid fundamentals and solid companies or ETF's, this would be nothing to worry about but what do you think? do you think it will be a taper tantrum like we had a few years back or do you think it will be nothing soon? and if so, how long do you think the quote on quote, "taper tantrum" will last this time around? Do you think this could be the start of a correction or bear market? [link] [comments] |
| Trading stocks on mobile apps when you have assets in two countries Posted: 10 Jan 2022 03:13 AM PST I'm an American citizen living in the EU. I have bank accounts in both countries, plus some retirement savings in the US. I still pay US taxes every year as well as taxes in my EU country. I would like to start using a little disposable income to do some very minor trading on mobile apps like Robinhood. What, if any, concerns do I have to have due to the fact that I live abroad? Has anyone done this? [link] [comments] |
| Posted: 09 Jan 2022 05:56 AM PST Warren Buffet says diversification is protection from ignorance, and the best way to have market leading returns is to over allocate your portfolio if you're confident in your selections. What's your largest position for 2022? What percentage of your portfolio is it? What makes you confident? For me right now I'm big OXY and OXY/WS for 2022 with 300 and 429 shares respectively, about 16.5k. This is ~18% of my portfolio. I'm a fan of the company because they're paying down billions in debt each year, and having worked for a highly leveraged company in the past I know how fabulous that can make earnings going forward. Each quarter they get 10's of millions more profit for future quarters due to less debt repayment. They also have over 10 billion in FCF this year if oil stays at its current heights and lots of tangible assets if inflation gets out of control. Lastly, I like that the dividend is small - when it increases in the future it'll be a stock price catalyst, and it'll help keep my taxes lower in the meantime. [link] [comments] |
| S&P 500 vs. MSCI World - what am I missing? Posted: 10 Jan 2022 01:45 PM PST Hello, I've just started getting interested in stocks and I have been trying to decide between investing in ETF of SP500 or MSCI world indices. I've read that the SP500 heavily outperforms MSCI world especially in the recent years, but when I started researching, I found these 2 sources and when I compare the results for example from 2015 to date, there doesn't seem as much difference as some other charts would say. SP500 yearly returns: https://www.macrotrends.net/2526/sp-500-historical-annual-returns MSCI world returns: https://www.msci.com/documents/10199/149ed7bc-316e-4b4c-8ea4-43fcb5bd6523 (beware this is a PDF document from MSCI) And now this comparison which seems totally different than when I compare the numbers from the first 2 sources above. https://www.longtermtrends.net/msci-usa-vs-the-world/ Can somebody tell me what I'm missing? Why does the chart in the 3rd link look so different than the actual performance numbers in the first two links? Heavily appreciate any help! [link] [comments] |
| Best vehicle for short term (3-5 years) growth and preservation of savings? Posted: 09 Jan 2022 08:33 AM PST Hello, I am active duty military and I am eligible to retire with pension in exactly three years. I am 90% decided that I want to get out and just spend a few years just crossing off a few items on my bucket list (e.g. doing whatever the heck I want and NOT WORKING). I have zero debt. I have retirement accounts going. I have also saved a decent amount of "F-you money" which I currently keep in a popular stock index fund. Between now and 2025 (when I get out), I plan to save a helluva lot more. So my question is this: concerning my "F-you" money (for lack of a better term), I want to find that sweet spot between growth and preservation. I'm looking for something more than a high yield savings account but I don't want the potential volatility of stocks. I want that money to be there in 2025, but I can accept a little risk because I can always take another assignment and push back my retirement date. So, what are my options? Bonds? I look forward to reading your opinions. Thanks! [link] [comments] |
| What is your investing philosophy? Posted: 09 Jan 2022 09:50 AM PST One thing I'm struck by is the number of different approaches to investing that people have and their ability to make money from them. A few examples: Bogleheads: Hold index funds and reap the benefits of the growth of the market. Buffet: Invests in high quality companies with managements that he could trust. Would hold long-term. Soros: Took advantage of "disequilibriums" within markets. He followed trends, but was cautious of things that could disrupt the investment thesis. He would then either sell or bet against the trend. Most of his bets were concentrated with various degrees of speculation. Nassim Taleb: No one really knows what drives markets due to an infinite amount of factors that we can't possibly have knowledge of. When investors are at their most confident, black swans appears that offer opportunities to be taken advantage of. Edit: to include clarifications from a few responses below. He also favored investments where he would only lose a little money, but could make a lot using bonds and DOTM puts. Other philosophies I've seen include efficient market theory, investing based on capital cycle, investing in companies you see in everyday life after researching them (Peter Lynch), and growth vs. value. What is your investment philosophy or approach? Are there any interesting approaches that I haven't included here that could be worth checking out? [link] [comments] |
| Which sector would benefit most from the US complete commitment to renewable energy? Posted: 09 Jan 2022 03:04 PM PST The sectors under consideration are utilities, information technology, materials and Industrials. Maybe there is one I'm not considering that you think would benefit the most. I'm under the impression utilities would fare best because they are permanently affected by the switch and also benefit from the lower cost for them to produce energy. Also once they switch completely over to renewables, their cost are set and will likely decline over time as advances in the industry continue. Thoughts? Side note: I'd also like to know your thoughts on any of the public energy storage companies. Good investments or pump and dumps? [link] [comments] |
| Question: Shorting Against the Box Posted: 09 Jan 2022 12:30 PM PST Hey guys, I came across a hedge strategy called shorting against the box, and I have some questions for those familiar with it. (https://invest-faq.com/short-against-the-box/) Summary: Basically, it's when you purchase longs on a stock that you're short. The gains on the longs cancel out the losses on the short. And it's typically used (or was used) to avoid capital gains taxes. I think that's illegal now. My questions are:
Thanks in advance! [link] [comments] |
| Daily General Discussion and Advice Thread - January 09, 2022 Posted: 09 Jan 2022 02:01 AM PST Have a general question? Want to offer some commentary on markets? Maybe you would just like to throw out a neat fact that doesn't warrant a self post? Feel free to post here! 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:
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! [link] [comments] |
| Portfolio Rebalancing strategy Posted: 08 Jan 2022 09:37 PM PST What is the ideal strategy for portfolio Rebalancing? Assume that portfolio has 50/50 stocks/bonds and the target is 80/20 stocks/bonds. Option 1 - Sell the bonds to buy stocks and continue investing normally with 80/20 stocks/bonds division. OR Option 2 - Dont sell anything but instead for the next time period invest more in stocks and less in bonds so that at the end of investment period estimate will be back to 80/20 stocks/bonds. [link] [comments] |
| What are the downsides to something like VFTAX? Posted: 08 Jan 2022 09:39 PM PST Sorting all of Vanguard's Mutual Funds by average return since date of inception, VFTAX (FTSE Social Index Fund Admiral Shares) is performing extremely well. I've been following the Boglehead method of investing in VTSAX but the potential for significantly more return is on the table with some of these other mutual funds. Here is what I understand: -Diversity is important to hedge against unpredictable events -Total stock market index funds are historically reliable, you can comfortably expect a rate of return of at least 8% But 8% is chips compared to what some of these mutual funds are returning even with the higher expense ratio. I would like to better understand the downsides before I move money into them, online investment calculators really make it hard not to want to do this. Is the downside essentially that I would be entrusting a random person at Vanguard that I don't know to decide what companies reside in the mutual fund? Or is there more to it than that? [link] [comments] |
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