Best long-term investments in August 2021

[Kirk W]

It seems that the forum has mostly been one of automobil discussions of late, so I thought that I much suggest a return to something more in line with the title. As one who has long been a believer in long term investing and and who is now reaping benefits of that past investing, I still read a lot about the current trends and choices. To quote an article from Bankrate:

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One of the best ways to secure your financial future is to invest, and one of the best ways to invest is over the long term. With the ups and downs that came during 2020, it may be tempting to chase quick returns in 2021. But the economy is still recovering, and it’s more important than ever to focus on long-term investing and stick to your game plan.

Here is one writer's opinion about the 9 best long-term investments in August 2021. What are you doing to plan for your financial future? 

[ms60ocb]

I learned many years from a fellow worker get in the market and forget it. Money in the bank is a bad investment if your not using it. Individual stocks comes with risk. Mutual fund need to be studied but I agree the August list of 9.

I get a little gun shy with October, any 90 day predictions?

Clay  Haven't worried about it since retiring 17 years ago.

[Randyretired]

My tolerance leads to mutual fund investing and I particularly like low cost index funds.  I have had a S&P 500 index fund for more than 20 years.   It hasn't made me rich but it has some nice returns.  In the past I tried stocks and even options but overtime the somewhat steady index funds worked best for me.

[rynosback]

I try to look at up coming trends and invest in a couple companies in that sector. I hold them and don’t trade them. I have had NIO for 2 years and have added to my position on dips. As electric cars are the future and they are just starting off.

[RV_]

Ryno, you gave me that tip on Nio back when it was under $5 and I should have bought a few thousand shares but did not.

New brands like Nio doing IPOs and new EVs from American automakers will lead the way for the next decade at least because of worldwide legislation.

We have always done mutual funds and Index funds and they are way up at the moment.

I am glad to have some investment posts about other Industry investments here, in addition to the threads about investing in EVs, Solar, Battery storage systems be they industrial or residential battery storage.

I have to respectfully disagree Kirk. Automobile Industry investment discussions about what is new and making money are Finance and Investment topics. It is no ones fault who are posting about their investments, that others are not posting about their preferred industries and investments.

How about encouraging others to post here too by starting threads like you just did.

 

Edited August 11, 2021 by RV_

[Kirk W]

2 hours ago, RV_ said:

How about encouraging others to post here too by starting threads like you just did.

I didn't mean to imply that automobile industry's are bad investments, only that it has seemed to be about the only investment discussed recently. My intention was/is the very same as you are suggesting. We used to see a lot of different types of investments and investment strategies in this forum and my hope is to see that begin happening again. 

[Darryl&Rita]

I started one on a YOLO subject, that is slowly evolving into a threat to western investment institutions. It hasn't fared well.

[justRich]

Stay the course has been my lesson learned.
Hillary Clinton's tax return investments were not press worthy: 100 percent S&P 500
Warren Buffet stated that he would invest 90 percent in the S&P 500 and 10% bonds for his wife.

So there's that.
And then there are the "Lazy Portfolio" options: https://portfolioslab.com/lazy-portfolios

Generally, at this late point in life, we are not as adventuresome as the early days.
Investing early in one's career is most important - though that can be hard to do when many demands are placed on one's income salary. 

[Kirk W]

It seems to me that most people get really serious about retirement plans no earlier than their 40’s and more commonly in the 50’s investing didn’t take much priority for us until our kids began to leave home. 
 

A 401k is probably the best tool for most working folks. If I were at that age today, I think a Roth IRA would be my second investment. 
 

Simce passing 75, we have become less aggressive in selecting investment choices. Bonds tend to be very safe but it hard to find any that have much yield. 

[Randyretired]

Bonds tend to errode a portfolio as inflation  and possibly some taxes tend to leave a negative outcome.   I know they are safer but I can't bring myself to buy bonds at this time.  I keep a couple of years worth of withdrawals in a money market and the rest is in stock mutual funds.  Hopefully I can ride the next downturn with the money in the money market.  

[steiny93]

If long term is the goal...

The strategy for 2021 is the same has it has always been.  Stocks not bonds, keep costs low and continue to fund through thick and thin.

 

 

[Kirk W]

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Stay the course has been my lesson learned......

 Hopefully I can ride the next downturn with the money in the money market.  

Stocks not bonds, keep costs low and continue to fund through thick and thin.

But how do you invest? Self directed IRA or 401k, choose your own mutual funds, use the services of a financial advisor, or broker, or................... ? 

Some reports say that more people are saving than in the past. 

Study shows surge in savings during the pandemic

What the U.S. Loses When Americans Save Too Much

[Chalkie]

We have left our funds to professional money management specialists and over the last 10 years have always made a very good return, averaging over 7% (some years a little better, some worse). We have even taken their advice on major purchases, like the truck or RV, as to whether pay in full or take a loan so as to maximize our income and better our tax position and it has always worked out in our favor.

I consider myself to be a fairly smart person, and I would rather take care of things myself, but a professional is IMHO the only way to go. I simply don't have the time or inclination to try play the market better than the experts can. I know there are folks out there that do but I am not one of them and have other things to do with my time. 

[Randyretired]

I self direct my investments.   Index funds are simple and the returns have been pretty good.  I haven't  bothered to check lately but I know it is more than 10%.  With the right selection of low cost index funds one can easily stay diversified and index funds have proven to beat most managed funds.  I don't spend much time managing it.  Most of our funds are after  tax investments so tax efficiency is important to me.  Index mutual funds also check that box.  I only have a small IRA and I just kinda play with that but a few years ago I also used it to buy more index funds. It has now starting building steam but the taxes on withdrawals bite a bit.  The after tax investments are long term capital gains.  I don't know if that is better overall but at least the checks to the government are smaller now.

Edited August 13, 2021 by Randyretired

[justRich]

19 hours ago, Kirk W said:

A 401k is probably the best tool for most working folks. If I were at that age today, I think a Roth IRA would be my second investment. 
 

In retrospect, a Roth IRA would be my first choice - and if a company matching fund were available - max it out.
Long term successful investing can actually put one into a position of getting bumped into a higher tax bracket.
We are required to take withdrawals from traditional IRA's (401k's) at age 70 (or is it 72 now?)

And money taken from a traditional IRA is taxed as ordinary income.  Money taken from a Roth is tax free.
If one does not need the money it is better to leave it alone - in a Roth.

[Kirk W]

37 minutes ago, Rich&Sylvia said:

We are required to take withdrawals from traditional IRA's (401k's) at age 70 (or is it 72 now?)

Like most things in life, government is making it more complicated. This comes from the IRS website.

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You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 70½. However, changes were made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act which was part of the Further Consolidated Appropriations Act, 2020,P.L. 116-94, signed by the President on December 20, 2019. Due to changes made by the SECURE Act, if your 70th birthday is July 1, 2019 or later, you do not have to take withdrawals until you reach age 72. Roth IRAs do not require withdrawals until after the death of the owner.

Your required minimum distribution is the minimum amount you must withdraw from your account each year.

• You can withdraw more than the minimum required amount.
• Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).

In many cases, contributions to a 401k are to some degree matched by an employer, in which case it is usually beneficial to make contributions to it first. You can contribute to both a 401k and an IRA and in many cases it can be a Roth IRA. In looking through the IRS information on that subject, I find that it isn't a simple thing and involves way more than I wanted to wade through. The IRS refers to documents from the US Dept.of Labor for information about mixing the contributions. The IRS limits of contributions:

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For 2021, 2020 and 2019, the total contributions you make each year to all of your traditional IRAs  and Roth IRAs can't be more than:

• $6,000 ($7,000 if you're age 50 or older), or
• If less, your taxable compensation for the year

The Roth didn't exist until after I had retired but I know that 2 of my 3 sons contribute to them and all 3 of them contribute to a 401k. For some people it also becomes important to note that the 401k and IRA are pre-tax while the Roth IRA is after-tax. Since we have passed the age of required annual withdrawals, I really don't keep up on the rules like I once did.

[Ray,IN]

100% of my investment funds are in the same aggressive growth mutual funds I started with in 1990. Had I listened to Derek back then I'd be driving a new Tesla today.

[RV_]

We have funds in a traditional 401 and I am asking my tax people if the tax hit over time worrying about withdrawal ages and the hit if we got out now and took the tax hit all at once are the same amount or close. If so we are gone and putting the money elsewhere.

We are hanging onto our Tesla stock as we expect it to be increasing in value after the Austin and Berlin Gigafactories are finished and in full production of Cyber trucks, Model Y, and Model 3. As well, analysts have raised the Tesla target price to $1200.00.

Ray I sold but bought again just last year when it dropped briefly after the split to ~ $325. When I saw it slide I put in a big buy order for $350 and got it all. It's doubled already.

In all fairness Ray I also went big on two Pot stocks and had I sold on the pop I would have doubled my money but I learned the lesson about pigs getting slaughtered the hard way and lost ~ $35k on those which I only hold as a capital loss for when I cash in our lower yield funds and prepare for the Starlink IPO.

You would have lost big had you listened to me then.

I am considering one of the Chinese Tesla clones, and the low price now of the two stocks Ryno has suggested.

I will reiterate that I am expert on Tesla and their energy industries as well as the Space X side of Musk's interests which may become the primary ISP to the world or not. But the potential is there and Starlink's profitability IMO is probable.

I am reading all the results of the research of others here too hoping for insight to the tricks and traps of the industries others may think are great investments.

Tesla's new Supercharger production line in the Shanghai factory will make the large network able to open to other brands to recharge too.

So I am two hits and two losers for 4 counting initial Tesla buy on IPO and sale in 2018 To buy our house and car. And my buy of Tesla again last year. ACB and NBEV are both at all time lows and may go BK this year. So I am just batting .500 at best, but the big gains in Tesla I took offset those by far. I have learned now to take my profits from other companies not helmed by Musk.

But I am holding Tesla until the Austin Texas and Berlin Germany Gigafactories are in full operation. Hopefully next year the COVID caused shortages of chips is resolved and we see the new Model 2 and Cybertruck come out. Like the Model 2 I hope Tesla comes out with a mini truck as well along the lines of the soon to come Ford Maverick truck: https://philkotse.com/market-news/ford-maverick-compact-truck-size-11118

I owned a 2009 Ranger that could not get out of its own way. It still only got 19 mpg because: 7 foot bed and tow package.

If you look at the mpg figures they are making the same assumptions they did before and not offering a 4WD or AWD version with an electric drive train.

All TEsla needs to do is have the Cybertruck to beat the F-150, and a smaller truck like the Maverick but with the same range and power as my Model Y.

With what I am seeing from new tech and batteries I would imagine 500 mile ranges and 15 minute charge times.

I kept our Forester fort trips but now we know that when we put a trip in navigation the Tesla automatically routes us to Superchargers so we never need have range anxiety on trips either.

Long term investments are no longer for me as at 69, according to actuarial tables for white males in the US, 75 is the life expectancy. Barring accidents I may do a bit better but EV investments are as long term as I want because it is all going down now and for the next ten years.

And for me Starlink is my next big buy. That will be long term as well.

All we need are no debt, cars, or house notes and we can live well on our military retirement. We live well and buy all cash now. But we did that before we invested in Tesla anyway for that reason. But now we can afford to do what we want. My concern is not making more money.

But for long term and for younger folks look to the first viable Fusion power generating, and the sea of disruptive BEVs, charging, and battery tech, are just beginning as the major brands succeed or fail in the transition in the next five to ten years. Why 10? Because the legislation for CO remediation and the lack of service needed for BEVs, will spell the end for stealerships as we know them, because they depend on their service departments for a major part of their profits. They can ramp down to the same as the new Tesla showroom/sales/service here in the Springs. It just went fully operational last month. Much smaller than a traditional ICE age facility. The Denver area facility was not enough for all of Colorado.

I was the opposite here on these forums, when the folks who lost it all in 2008 great recession were calling for the market to crash any moment from then to now, and to get out back then.  I was not worried about the long running Bull market that has existed since 2008 after the TARP bailout of the banks and auto manufacturers who went bk, including Ford who got ~30Billion in federal loan guarantees allowing Ford to all but actually file for bk. In 2009 Ford also received 5.9 Billion from the DOE Advanced Technology Vehicles Manufacturing Loan Program: https://en.wikipedia.org/wiki/Advanced_Technology_Vehicles_Manufacturing_Loan_Program

I see the big buck returns in CO and pollution remediation, ending fossil fuels as dominant, and betting on which companies will succeed and which fail with BEVs and sustainable non freezing energy production like the gas industry had happen in the last big freeze. I am still watching Fusion efforts and wondering how fast the climate changes with predictions of the Gulf Stream stalling out and putting Europe into much colder temps year round.

It is all coming to a head in the next decade or less. Communication/Internet/sustainable transport and energy production/CO and other greenhouse gas remediation.

Right now the opportunities abound. Pick an industry to learn to win with and the gains will be great.

Getting a balanced portfolio that yields 4-6% is great too.

Every age and personalities needs and wants are different and valid for each.

But they are different.

There is no one size fits all best long term investment that suits all. But with a bit of effort and focus There are long term investment perfect for each.

I am re-evaluating in November through February 2022. Many stilll adhere to the old adage:

""Sell in May and go away" is a stock market adage based on what the Stock Trader's Almanac calls the "best 6 months of the year." Historical data reveals that the top performing 6-month rolling period, on average, has been November through April. Hence, the saying investors should "sell in May and go away"—and come back in November."

https://www.fidelity.com/viewpoints/active-investor/sell-in-may#:~:text="Sell in May and go away" is a,May and go away"—and come back in November.

Safe Investing!

 

 

 

Edited August 16, 2021 by RV_