Jump to content

The secret to making better investment moves when markets are in turmoil: Morning Brief


Recommended Posts

I like this article.

Excerpt:

"The stock market got slammed last week.

The S&P 500 (^GSPC) fell 5.6%, the index’s worst week since March.

For investors, it can be extremely unsettling to watch your account balances shrink so quickly. And unsettled investors often make ill-informed, rash decisions as their instincts become biased. And for that reason, it’s critical to have a well-thought-out plan for these uncomfortable scenarios.

An investment plan typically includes a long-term strategy, but often also includes room to make shorter-term tactical moves to exploit near-term opportunities.

As UBS CIO of Global Wealth Management Mark Haefele wrote just before last week’s selloff: “Election (and fiscal) uncertainty may continue to add volatility leading up to the 3 November election, offering entry points to establish long-term positions.”

It was notable because he was saying that the following two weeks (yes, two weeks) could come with a significant selloff, in which case the move is not to panic. The move is to buy.

Back when Haefele wrote that note, we knew of a bunch of things that could exacerbate market volatility in the near-term: already-high expectations for earnings and GDP; short-term uncertainties and longer-term risks tied to the U.S. elections; much needed fiscal stimulus that continues to be put off; COVID-19 infections on the rise; and increasingly bullish equity positioning.

While markets are never guaranteed to do anything, it certainly shouldn’t have surprised anyone to see stocks take a hit. Indeed if you consider the history of the stock market, then you know you should always be ready for a big, scary stock market selloff.

And so as markets tumbled, Haefele followed up late Wednesday advising clients to use the volatility as an entry point."

Even more hotlinked in the full article here:

https://finance.yahoo.com/news/disciplined-financial-plan-stock-market-panic-morning-brief-105549588.html

Link to post
Share on other sites
On 11/8/2020 at 11:59 AM, Twotoes said:

When do you buy a new $500 suit at Nordstrom? When it’s on sale for half off and it’s only $250.

When do you buy stocks? When the market goes down and stocks are on sale. 

So how to you know when to sell the stocks you own so you can put the money in CD's or bonds while you wait for the market to go down?

Is now a very good time?  With the market at $29,000, up from around $8,000 back around 2008 is that when?   Or is the market going to go up to $35,000 or $40,000.  

Or do you just keep a couple hundred thousand dollars in CD's just waiting for the "right" time to buy? 🙂

Link to post
Share on other sites
2 hours ago, Al F said:

So how to you know when to sell the stocks you own so you can put the money in CD's or bonds while you wait for the market to go down?

Is now a very good time?  With the market at $29,000, up from around $8,000 back around 2008 is that when?   Or is the market going to go up to $35,000 or $40,000.  

Or do you just keep a couple hundred thousand dollars in CD's just waiting for the "right" time to buy? 🙂

Exactly-

All of this comes down to whether or not you can "time the market".  Most folks agree that it cannot consistently be timed, and you are better off staying with it over the long term. But there will always be those who jump in and out, with some big winners (who are quick to report their success) and some big losers (who are not...). 

Link to post
Share on other sites
10 hours ago, mptjelgin said:

Exactly-

All of this comes down to whether or not you can "time the market".  Most folks agree that it cannot consistently be timed, and you are better off staying with it over the long term. But there will always be those who jump in and out, with some big winners (who are quick to report their success) and some big losers (who are not...). 

The same goes for those who go to Las Vegas or the local casinos, they talk a lot about their winnings but very little about their losses.  From the stories I hear & read the casino business is one of the worse in the world, everyone wins but very few loose.

Link to post
Share on other sites

I had a boss once that took a vacation to Las Vegas with his best wife. They enjoyed themselves and actually won and came home with a little over $25,000.00 within about  a year of 2 he would frequently say that was one of the worst things that ever happened to them. (Maybe him) They got almost instantly trained into thinking they could do that every time so they tried again and again.  I worked out of Texarkana at the time and had one building in Marshall Tx. He was based out of Ft.Hood. If he made an inspection trip and we met up at Marshall as soon as quitting time hit he headed to the gambling boats over at Shreveport/Bossier City.

Link to post
Share on other sites
  • 2 weeks later...

Here we discussed my gains with Tesla. I also talked about my losses on ACB and NBEV. Bith are on their way up. But I stand to lose about $20k on ACB even if it quadrupled because that 12/1 reverse split made my 5000 shares bought at $5-$7 now only 425 shares. But my 1000 shares of NBEV bought at $2.50-$3.00 may show a profit yet.

The ego and willingness to dissemble isn't here. You've read about my gains and losses. My ego isn't fragile enough that I need to impress anybody. So not all gamblers only have a choice of lying when they lose or telling the truth or an exaggerated truth. I'm way ahead. My 285 Tesla shares I bought on the dip at exactly $350 a share after the 5/1 split recently are now worth $574.75 after hours today. 

I even have a Navy Federal Investment counselor engaged who just sent me a proposal for a diversified portfolio that he'll need to redo as 3% gains with a 1.5% annual cost is not for me. But we'll keep working on it until I'm happy with it. But again, I expect a big correction in the near to middle future. So I'm not in a hurry to jump into a financial advisor's low risk and gain investment as I want the rest in cash to again buy low. I am not worried about NBEV or Tesla.

However if StarLink is spun off from Space X and IPOs, I'll sink at least half into it. I have a retirement and assets separate from my investing funds. I'm not risking my future security, just my kid's inheritance.

These are fun exciting times, And no, I hated getting my shares cut to nothing. But I believe I might get a significantly higher return than I thought a week ago with ACB. Big loss but not as big as if I sold while it was down. And my gains have been much better than a $20-25k loss.

I like this market. When it corrects and the market always does, I'm ready to buy index funds again cheap. My wife's ready to roll her funds into cash soon to do the same with her IRA. Then we catch index funds cheap and maybe buy some options which I'm still learning about.

Like I said about Tesla in their IPO at $17 in 2010, I repeat now a out Tesla if you can get it on a dip. I think it is going much higher. But I've learned not to make recommendations here. What works for me won't for some others. Folks need to be accountable for their own cash flow, as caveat emptor always applies. I am very happy with my outcomes. If Tesla ever drops down to under $200 again I may have 1000 shares to sit on again. None of it perfect because Those shares would have netted me $2.5 million had I not sold at $348.00 in 2018, and just held until it hit well over $2000 a share. No regrets, as I can't foresee the future, and I'm OK with that, and making a lot being close, not perfect.

I hope everyone else is doing very well too.

 

Link to post
Share on other sites
5 hours ago, RV_ said:

I have a retirement and assets separate from my investing funds. I'm not risking my future security, just my kid's inheritance.

That really makes it less nerve wracking to invest and really great that you have it. I have it in a way more limited way that coupled with health issues pretty much kept me from dealing with much risk. I admired your foresight on Tesla.  Not a put down just a comment that I know you have had some downs like most people.  It was so long ago I am not sure if I remember it right but didn't you take a shot on that car manufacturing in Shreveport. Did you come out at all on that?

Link to post
Share on other sites

By keeping interest rates at or near zero for a very long long time now the Fed is forcing Americans into risky investments in the stock, bond, real estate, etc. markets.

From my long term research the only way to safely invest (a big maybe) in stocks is in stock index funds that tract S&P 500, etc.  There many  to choose from.

After the 2008 stock market and economic sudden drop/downturn it was revealed that insider trading using complicated sophisticated computer buy and sell programs played a big part of the market sell off.  In spite of criminal penalties there will always be insider trading.  This can easily all happen again at anytime.  I only break even at black jack and video poker and not smart enough to play live table games.

People gambling in Vegas have more fun I suspect.

 

 

Edited by NamMedevac 70
Link to post
Share on other sites
10 hours ago, rynosback said:

Or you pick a big company that is not going anywhere that earns a good yield. Like Verizon,

Good call there rynosback.  What is Verizon debt burden as compared to AT&T. AT&T as you know is trying to find a buyer for Direct TV at same time they are raising prices me thinks.  At&T has extremely high debt burden and just started a major shakeup at their Warner Media division with rumors to sell WM assets including the news division.  Direct TV just announced they are shutting down 60 local TV stations (??).  Because of some grandfathered good deals I am staying with AT&T for now even though I don't like the politics of their executive management period.

On another note according Victor David Hansen an economic history expert the US added $4 trillion dollars to the national debt due to pandemic and this on top of $40 trillion dollar debt load can only lead to runaway inflation or stark stagflation like that of the 70s.  On a brighter side the other nations cannot call in our debt as a USA collapse would severely hurt them or cause their collapse since they have bought so much of our debt (loans to us).  Like bankers lending too much money to land and stock speculators in old and modern times. The proverbial merry go round.

As a former financial/tax accountant and financial planner with SEC certificate I agree with Hansen and others like him. Cheers

 

Link to post
Share on other sites
13 hours ago, NamMedevac 70 said:

Good call there rynosback.  What is Verizon debt burden as compared to AT&T. AT&T as you know is trying to find a buyer for Direct TV at same time they are raising prices me thinks.  At&T has extremely high debt burden and just started a major shakeup at their Warner Media division with rumors to sell WM assets including the news division.  Direct TV just announced they are shutting down 60 local TV stations (??).  Because of some grandfathered good deals I am staying with AT&T for now even though I don't like the politics of their executive management period.

On another note according Victor David Hansen an economic history expert the US added $4 trillion dollars to the national debt due to pandemic and this on top of $40 trillion dollar debt load can only lead to runaway inflation or stark stagflation like that of the 70s.  On a brighter side the other nations cannot call in our debt as a USA collapse would severely hurt them or cause their collapse since they have bought so much of our debt (loans to us).  Like bankers lending too much money to land and stock speculators in old and modern times. The proverbial merry go round.

As a former financial/tax accountant and financial planner with SEC certificate I agree with Hansen and others like him. Cheers

 

Have not looked in both company’s debt. But Direct TV is hurting AT&T. That is why I stated Verizon as a stable good and consistent dividend paying stock.There are several companies out there that pay good dividends and are very stable. 

Edited by rynosback
Link to post
Share on other sites
On 11/26/2020 at 8:22 AM, bigjim said:

That really makes it less nerve wracking to invest and really great that you have it. I have it in a way more limited way that coupled with health issues pretty much kept me from dealing with much risk. I admired your foresight on Tesla.  Not a put down just a comment that I know you have had some downs like most people.  It was so long ago I am not sure if I remember it right but didn't you take a shot on that car manufacturing in Shreveport. Did you come out at all on that?

Jim,

I'm sorry to hear of your health issues. Stay safe until we get vaccines readily available.

Elio motors is still scamming with no production at all. https://www.eliomotors.com/about-elio/

My actual investments in individual stocks are just three, Tesla, NBEV, and ACB. I lost on ACB only and not much compared to my gains with Tesla and soon NBEV. We still have funds we bought in the early 90s. 

They said we could reserve a build spot with $100.00 non refundable deposit, and get an Elio Motors T-Shirt and bumper sticker. They sent me a sticker and a T that was two sizes too small and no cars to buy five or so years later. So I was out/lost exactly $100 on Elio. I really liked the design and had the cash to buy one. A non-refundable deposit isn't an investment loss, just a C-Note lost.

I lost on ACB but NBEV is coming back to what I paid. My Tesla shares were quite a profit. And the several hundred shares I just bought on the post split dip. I put my buy order in for $350.00 and have seen its value shoot up to where if I sold now would yield ~ $200 a share profit. I expect to make even more with it in the future. When I sold my Tesla stock for this move and ultimately paying for my Tesla Model S it turned out to be a "fifteen bagger." I had too much liquid left over making a lousy .25% or even less! Tesla came back with an obliging dip.

Our funds we started with in the early 90s are doing well and our recent real estate sales in Louisiana were rewarding too. So of my only three real stock transactions, I only lost some money on one, the $100.00 deposit on Elio is the cost of taking another couple out for dinner and drinks. Jim, I was writing about Musk, Tesla, and Space X, here and on a few other forums back in 2003 to date. I saw them sell out the first roadster's full two year prod sight unseen and most paid cash up front, some a little less. Then they finally IPOd in 2010 and we bought a thousand shares I think I'm done for a bit until the next overdue correction. Like we bought in 2008/2009. As I've said above, our next significant investment will be Index funds in the next correction.

We also cashed in our real properties in Louisiana and did well. Once this COVID gets defeated with vaccines I'll be looking for where to invest next.

Jim I am not a stock trader. I buy then sit on it. So no running losses or big losses like day traders. Had I sold on the pop with ACB I'd have made more than double within a month of the legalization in Canada "Pop."

 

I'm going to look at buying  index funds when the next correction happens. I just got an investment proposal that did not impress me.

Link to post
Share on other sites
7 hours ago, RV_ said:

Jim,

I'm sorry to hear of your health issues. Stay safe until we get vaccines readily available.

Elio motors is still scamming with no production at all. https://www.eliomotors.com/about-elio/

My actual investments in individual stocks are just three, Tesla, NBEV, and ACB. I lost on ACB only and not much compared to my gains with Tesla and soon NBEV. We still have funds we bought in the early 90s. 

They said we could reserve a build spot with $100.00 non refundable deposit, and get an Elio Motors T-Shirt and bumper sticker. They sent me a sticker and a T that was two sizes too small and no cars to buy five or so years later. So I was out/lost exactly $100 on Elio. I really liked the design and had the cash to buy one. A non-refundable deposit isn't an investment loss, just a C-Note lost.

I lost on ACB but NBEV is coming back to what I paid. My Tesla shares were quite a profit. And the several hundred shares I just bought on the post split dip. I put my buy order in for $350.00 and have seen its value shoot up to where if I sold now would yield ~ $200 a share profit. I expect to make even more with it in the future. When I sold my Tesla stock for this move and ultimately paying for my Tesla Model S it turned out to be a "fifteen bagger." I had too much liquid left over making a lousy .25% or even less! Tesla came back with an obliging dip.

Our funds we started with in the early 90s are doing well and our recent real estate sales in Louisiana were rewarding too. So of my only three real stock transactions, I only lost some money on one, the $100.00 deposit on Elio is the cost of taking another couple out for dinner and drinks. Jim, I was writing about Musk, Tesla, and Space X, here and on a few other forums back in 2003 to date. I saw them sell out the first roadster's full two year prod sight unseen and most paid cash up front, some a little less. Then they finally IPOd in 2010 and we bought a thousand shares I think I'm done for a bit until the next overdue correction. Like we bought in 2008/2009. As I've said above, our next significant investment will be Index funds in the next correction.

We also cashed in our real properties in Louisiana and did well. Once this COVID gets defeated with vaccines I'll be looking for where to invest next.

Jim I am not a stock trader. I buy then sit on it. So no running losses or big losses like day traders. Had I sold on the pop with ACB I'd have made more than double within a month of the legalization in Canada "Pop."

 

I'm going to look at buying  index funds when the next correction happens. I just got an investment proposal that did not impress me.

Keep us in the loop with what you think is next or PM me. I like looking into and investing with companies that are going to break out. 

Link to post
Share on other sites
  • 4 weeks later...

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
×
×
  • Create New...