Stock Market

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PainDoc2025

Resident Physician [PM&R]
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Someone make it stop!! Great buying opportunities if you have cash in hand. What's everyones gameplan right now?
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I don't think we are at the bottom, but no one we will no we are at the bottom until its in the past. I have actually been dollar cost averaging into the market. Not sure its the right choice, but cash sitting in the bank during high inflation has a real cost too...
 
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Contribute the same as I always do to 401k/529/brokerage.

Holding more cash than I normally would in hopes that the housing market follows closely behind.
 
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Baron Samedi said:
Contribute the same as I always do to 401k/529/brokerage.

Holding more cash than I normally would in hopes that the housing market follows closely behind.
Click to expand...

mortgage rates are hitting >6%...
housing prices may slow but this will not be anything like 2008-2009
 
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Buying more crypto.
 
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I think this latest drop is the market pricing in a possible 0.75 rate increase in the future or more frequent/urgent rate increases - all of which COULD cause a decrease in growth or recession.

IOW, this is all speculative selling, there's no rational reason someone would horde cash when it's losing value at 8%/year.

No reason to sell IMO

Just think of all the suckers who bought negative yielding bonds in 2010 because of fear. There were many of them. And they were all wrong.
 
Series I savings bonds have good yield rn and it’s pegged to inflation. Though can only put 15k.
 
Don’t retire in the next 10 years and you have no problem. It’s called dollar cost averaging. If the market bothers you don’t look at it.
 
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Keeping my same index funds and investing monthly.

I am using a little funny money where I'm moving some into leveraged ETFs (UPRO) in tranches, first started today at a 20% drop from last peak. Not a huge amount and certainly speculative but I'm OK if it goes to zero.
 
voxveritatisetlucis said:
Series I savings bonds have good yield rn and it’s pegged to inflation. Though can only put 15k.
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I did this a month ago and it took 20 minutes. Not bad if you aren't a 1x baller.

Is it 15k limit? I thought it was 10k? With spouse can be another 10k.
 
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It's hard to believe how new crypto is in terms of being considered an asset by a lot of people. Bitcoin was first released a mere 13 years ago in 2009, just a 3 months after the Federal reserve first started it's QE program in the setting of super low interest rates.
 
ragnathor said:
I did this a month ago and it took 20 minutes. Not bad if you aren't a 1x baller.

Is it 15k limit? I thought it was 10k? With spouse can be another 10k.
Click to expand...
It is 10k for purchases but you can also add up to 5k from a tax refund
 
ragnathor said:
Keeping my same index funds and investing monthly.

I am using a little funny money where I'm moving some into leveraged ETFs (UPRO) in tranches, first started today at a 20% drop from last peak. Not a huge amount and certainly speculative but I'm OK if it goes to zero.
Click to expand...
Be careful with the leveraged ETFs, if you are planning to invest for the long term. Most of them have negative roll yield due to the way that they invest in contracts/options. In other words, over time, the fees paid for the instruments chip at the NAV leading to a decrease in price.
 
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Can't make it stop and disagree that there are good buying opportunities. This is just the beginning. People are scared so are naturally inclined to hear about the market downturn. The media responds to this demand and churns out lots of talking heads on the market crash, recession, inflation, etc. This creates more fear which leads to more selling which leads to more chatter about the bear market and its impending doom.

That's why it needs to get a lot worse before it gets better. When people accept their losses and become comfortable with their fear then that's the time to start looking for deals. We're nowhere close to that.
 
voxveritatisetlucis said:
Be careful with the leveraged ETFs, if you are planning to invest for the long term. Most of them have negative roll yield due to the way that they invest in contracts/options. In other words, over time, the fees paid for the instruments chip at the NAV leading to a decrease in price.
Click to expand...
sorry to piggy back on this thread, what but about REITS? anyone invest in those? they seem reasonable and i'm thinking of taking the plunge. what are others thoughts on this?
 
Iamnew2 said:
sorry to piggy back on this thread, what but about REITS? anyone invest in those? they seem reasonable and i'm thinking of taking the plunge. what are others thoughts on this?
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I personally am not invested in any, but if I did it would only be in tax advantaged accounts unless capital gains taxes are ever increased to income tax levels.
 
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REITS are going to get hammered. They have been overpaying for RE for years with profits dependent on low interest rates and increasing valuation of underlying assets. They are poorly positioned. If anything, I would short REITS
 
Any resources for a young resident to learn more about the stock market? (options, futures, calls, etc)
 
Iamnew2 said:
sorry to piggy back on this thread, what but about REITS? anyone invest in those? they seem reasonable and i'm thinking of taking the plunge. what are others thoughts on this?
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I think that REITs look okay but the increase in mortgage rates would concern me. I don’t think that I would go all in right now, though they do look better than some other asset classes (ie tech). I would personally choose a low expense ratio, diversified REIT etf if I were going to invest in that space. Diversify some of the risk away.
 
PainDoc2025 said:
Any resources for a young resident to learn more about the stock market? (options, futures, calls, etc)
Click to expand...

As a resident, I would recommend you do none of that.

- Build an emergency fund
- Utilize any match you are offered
- Pay down any high interest debt
- Save for any short/intermediate goals in an easily accessible account such as a Savings account
- Maximize your tax advantaged accounts such as Roth IRA/401k/403b/529 investing in low fee diversified index funds
- Open a brokerage account and invest in low fee diversified index funds to save any money you aren't going to need in the near future(7-10 year time frame)
- Maintain a high savings rate and minimize unnecessary expenditures

Once you've done all that, if you have funny money you want to gamble with on individual stocks, options, crypto, or whatever then go for it. As a resident you should not do this.
 
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PainDoc2025 said:
Any resources for a young resident to learn more about the stock market? (options, futures, calls, etc)
Click to expand...
ocw.mit.edu

Finance Theory I | Sloan School of Management | MIT OpenCourseWare

This course introduces the core theory of modern financial economics and financial management, with a focus on capital markets and investments. Topics include functions of capital markets and financial intermediaries, asset valuation, fixed-income securities, common stocks, capital budgeting...
ocw.mit.edu

I wouldn’t suggest derivatives of any type though unless you’re using it for insurance on much larger equity positions. Ie covered calls.
 
PainDoc2025 said:
Any resources for a young resident to learn more about the stock market? (options, futures, calls, etc)
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Gain access to the physicians-only section. I put a decent explanation of options/calls in there. For the stock market, many moons ago I printed out the entire yahoo finance education section and read it. Easy read and educational if it's still around.

No need to worry either way, if you just pick stocks at random or invest in the DOW you'll likely do just as good as, if not better than, nearly all of the so-called experts out there.
 
Pain Applicant1 said:
Gain access to the physicians-only section. I put a decent explanation of options/calls in there. For the stock market, many moons ago I printed out the entire yahoo finance education section and read it. Easy read and educational if it's still around.

No need to worry either way, if you just pick stocks at random or invest in the DOW you'll likely do just as good as, if not better than, nearly all of the so-called experts out there.
Click to expand...
how do we gain access to physicians only section?
 
Pain Applicant1 said:
No need to worry either way, if you just pick stocks at random or invest in the DOW you'll likely do just as good as, if not better than, nearly all of the so-called experts out there.
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On average you may be correct, but picking randomly you are much more likely to do worse than a total market index fund, with a small chance of greatly outperforming. A few companies account for majority of gains of the stock market. Unless you're lucky and pick these in advance, you will do worse than average picking randomly.
 
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ragnathor said:
On average you may be correct, but picking randomly you are much more likely to do worse than a total market index fund, with a small chance of greatly outperforming. A few companies account for majority of gains of the stock market. Unless you're lucky and pick these in advance, you will do worse than average picking randomly.
Click to expand...
Just quickly...

What do you think about:

"the experts...are generally about as good as a monkey with a dart board" -Freakonomics authors

“You choose stocks at random and weight them equally...we tested the idea and immediately did better than the S&P 500” -David Harding of Winton Capital (world’s 14th-largest hedge fund firm) ---he created a business on this

Research Affiliates randomly selected 100 portfolios containing 30 stocks from a 1,000 stock universe every year, for about 50 years. The process replicated 100 monkeys throwing darts at the stock pages each year. Amazingly, on average, 98 of the 100 monkey portfolios beat the 1,000 stock capitalization weighted stock universe each year.

----
I wonder if that small chance of greatly outperforming evens things out. Post your articles showing that HFM or other finance pros do better than random. I'd be interested in looking at them.
 
voxveritatisetlucis said:
I think that REITs look okay but the increase in mortgage rates would concern me. I don’t think that I would go all in right now, though they do look better than some other asset classes (ie tech). I would personally choose a low expense ratio, diversified REIT etf if I were going to invest in that space. Diversify some of the risk away.
Click to expand...
At least in terms of the multifamily market, I know it pretty well, and how the REITs have been buying and how they have made their money. They only thing they have going for them is the significant increase in market rents. However, they are typically overleveraged and dependent on the low interest rates and continued increase in valuations. However valuations are going down and rates are going up. Not a good combo for them.
 
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mid|ine said:
At least in terms of the multifamily market, I know it pretty well, and how the REITs have been buying and how they have made their money. They only thing they have going for them is the significant increase in market rents. However, they are typically overleveraged and dependent on the low interest rates and continued increase in valuations. However valuations are going down and rates are going up. Not a good combo for them.
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I have to agree with you. These investor-owned single-family home rentals are in no way leveraged by 30-year fixed rates. What happens when that rate increases? Also, what happens when they find they can make more money elsewhere? They don't care if they crash a market as long as they can maximize returns as that's their job.
 
Pain Applicant1 said:
Just quickly...

What do you think about:

"the experts...are generally about as good as a monkey with a dart board" -Freakonomics authors

“You choose stocks at random and weight them equally...we tested the idea and immediately did better than the S&P 500” -David Harding of Winton Capital (world’s 14th-largest hedge fund firm) ---he created a business on this

Research Affiliates randomly selected 100 portfolios containing 30 stocks from a 1,000 stock universe every year, for about 50 years. The process replicated 100 monkeys throwing darts at the stock pages each year. Amazingly, on average, 98 of the 100 monkey portfolios beat the 1,000 stock capitalization weighted stock universe each year.

----
I wonder if that small chance of greatly outperforming evens things out. Post your articles showing that HFM or other finance pros do better than random. I'd be interested in looking at them.
Click to expand...

What is HFM?

To be clear I don't think random picking underperforms experts. I agree with the first statement. I don't know what to make of the 2nd and 3rd statements as I have no idea of their methodology.

My position is the majority of random picking will underperform passive indexing over long periods. We can take this to the extreme by picking every stock individually and comparing it to the index. Basically the median stock return underperforms the average market return. Take a look here:

www.stlouistrust.com

Why Do Most Stocks Underperform Their Index? - St. Louis Trust & Family Office

An interesting paradox exists in the stock market: the vast majority of stocks in an index actually underperform the index in which they are a member. This occurs because the pattern of returns in the stock market is positively skewed, meaning a relatively small number of very high performing...
www.stlouistrust.com www.stlouistrust.com
 
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ragnathor said:
What is HFM?

To be clear I don't think random picking underperforms experts. I agree with the first statement. I don't know what to make of the 2nd and 3rd statements as I have no idea of their methodology.

My position is the majority of random picking will underperform passive indexing over long periods. We can take this to the extreme by picking every stock individually and comparing it to the index. Basically the median stock return underperforms the average market return. Take a look here:

www.stlouistrust.com

Why Do Most Stocks Underperform Their Index? - St. Louis Trust & Family Office

An interesting paradox exists in the stock market: the vast majority of stocks in an index actually underperform the index in which they are a member. This occurs because the pattern of returns in the stock market is positively skewed, meaning a relatively small number of very high performing...
www.stlouistrust.com www.stlouistrust.com
Click to expand...
Hedge fund manager. I think we're on the same page on this one.
 
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Why do I have a feeling that it’s only going to be 50 bp hike and my QQQ/TLT shorts are going to blow up?

And of course the long leg of the trade is energy which seems to be the only sector down today
 
The more scared you feel, the more you buy blue chip stocks…

I agree with catching up on crypto if it crashes more
 
ragnathor said:
On average you may be correct, but picking randomly you are much more likely to do worse than a total market index fund, with a small chance of greatly outperforming. A few companies account for majority of gains of the stock market. Unless you're lucky and pick these in advance, you will do worse than average picking randomly.
Click to expand...

 
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Downward spiral here we come. Fear-->Selling-->Negative Chatter-->Fear-->Selling-->Negative Chatter.

I say it'll be several more months of this. Licking my chops and foaming at the mouth. Getting ready to pounce. Who's with me? I asked this question before during the runup and received no responses.
 
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Pain Applicant1 said:
Downward spiral here we come. Fear-->Selling-->Negative Chatter-->Fear-->Selling-->Negative Chatter.

I say it'll be several more months of this. Licking my chops and foaming at the mouth. Getting ready to pounce. Who's with me? I asked this question before during the runup and received no responses.
Click to expand...

We were really due for a correction. though I suspect the down trend will be months---> years and possibly years back up. Depends a bit on who wins midterms and 2024. The psychology of leadership is underestimated IMHO. I'm not really convinced DJT did anything amazing policy wise but he was clearly business friendly whereas Biden essentially declared war on the energy sector and does not inspire confidence in general

Business need to be able to plan and feel the government is not out to pick their pockets/work against them
 
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macman said:
Business need to be able to plan and feel the government is not out to pick their pockets/work against them
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Especially in capital intensive industries like energy. Why would anybody start building more refineries or rigs with such high levels of uncertainty?
 
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Pain Applicant1 said:
Downward spiral here we come. Fear-->Selling-->Negative Chatter-->Fear-->Selling-->Negative Chatter.

I say it'll be several more months of this. Licking my chops and foaming at the mouth. Getting ready to pounce. Who's with me? I asked this question before during the runup and received no responses.
Click to expand...

pounce on what though? boring index funds as per usual, but with interest rates resetting meaningfully higher - 5-6% is likely - will have to reassess portfolio
 
Gauss said:
pounce on what though? boring index funds as per usual, but with interest rates resetting meaningfully higher - 5-6% is likely - will have to reassess portfolio
Click to expand...
Stocks and options, but just not yet. I'm going to monitor very closely and will pull the trigger when I think the time is right. I don't think I can peg the bottom but I'm usually decent at getting pretty close. I'll update in the physician forum like I did on the way up. It'll be exciting if other people placed their thoughts and trades too. It makes the party so much more fun.
 
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macman said:
We were really due for a correction. though I suspect the down trend will be months---> years and possibly years back up.
Click to expand...
Agree here.

I don't really have much of an opinion on the political aspect of the mess we're in other than you're probably right but I mostly think the market has a mind of its own and doesn't really care who's in charge.

Knowing that you suspected this correction, did you trade accordingly?
 
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