The Investment Thread (stocks, bonds, real estate, retirement, just not gold)

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Freakonomics has a great podcast this week on index funds. An introduction for newbs.
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Pharmacy Kid said:
Can I brag that my individual stock picks made 48% the past two years?
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Its nice to see other smart people around here.

Keep picking those stocks, until we get tax cuts, this market isn't going any higher. If it does without cuts, look out below.
 
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Pharmacy Kid said:
Can I brag that my individual stock picks made 48% the past two years?
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Depends how much you invested. $10k? $100k? $1 mil?

I find that individual stock investing doesn't scale well because of the huge volatility. Imagine having $100k in a stock like RAD and then it takes a 70% dive so you lose $70,000! But if you decided you're only willing to risk $10k at $6 when the buyout offer was $9, you would have made just $5k if the deal went through, even though that's a 50% gain.

Having said that, I'm still putting around half of my stock market investments in individual stocks -- mostly in 72 AMZN and 41 GOOG. I'm fairly comfortable with this given the mammoth size and growth prospects of those companies. Also I've paid off my student loans and mortgage so that takes off a lot of pressure to keep the cash flowing just to pay the bills. Even if the stock market crashes I'll be ok. Plus I have a lot in bonds and cash.
 
WVUPharm2007 said:
Freakonomics has a great podcast this week on index funds. An introduction for newbs.
Click to expand...
I think I'm going to give this a listen. I've made a little bit of money by investing in hot stocks like AMD, or picking up shares in companies after a bad news dip (like when Amazon bought Whole Foods and every other grocery chain dived), but for the most part I tend to make losing bets. A solid performing ETF is what I'm looking for now.

Speaking of losing bets, NEOS continues to slowly drop in price despite getting FDA approval for a drug this spring. I'm going to hold out until the FDA rules on their extended releases amphetamine suspension later this year. I just need a little bump to make some profit before I cash out.
 
Look at Apple go!!! Hope everyone got on board back in the 100s. Stock picking continues to win.
 
wagrxm2000 said:
Look at Apple go!!! Hope everyone got on board back in the 100s. Stock picking continues to win.
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Bought at $93, but given the weighting given to these stocks pretty much everyone with an S&P500 fund is probably slightly overexposed to AAPL at this point!
 
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It is time to be cautious. This may not end well.


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BMBiology said:
It is time to be cautious. This may not end well.


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Yep like I've said, we need tax reform or this will burst.
 
Market corrections happen. I'm not retiring for 20 years at least, so I'm not really concerned. I can put some cash I've got on the sideline into the game if a bear market appears.
 
WVUPharm2007 said:
Market corrections happen. I'm not retiring for 20 years at least, so I'm not really concerned. I can put some cash I've got on the sideline into the game if a bear market appears.
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I've been waiting for a downturn in the market. Like you said, retirement is decades away and will recover. I've got cash on the sidelines just waiting to grab up discount stock. If we could get a housing market correct in there I'd also like to buy a house at a reasonable price while we're at it.
 
I got my house in Mar 2012 at 3.75% APR...timed that pretty well. Rates were pretty low and market was at its bottom. Zestimate is is up about $60,000 since purchase, too. Not sure how reliable that metric is, but it appears that it's a decent measure.
 
Hoping for some input on this. Debating on whether or not to fund my wife's 401k with high fees....My wife works for a small company and the expense ratio's in her 401K are ridiculous. The target date funds are 1.2%, the SP500 fund is the lowest of the choices at 0.7% (still very high). We have been putting the 18k max in her 401K for a few years now but as her account grows the high fees become an issue. She has 30 years until retirement and it is likely she will be with this company til then, so no rollovers to a cheaper bank like Vanguard or Fidelity. I guess my question is, should we be investing just the match and anything beyond that put into a post-tax account? Are the tax benefits of the 401K greater than the high fees on our money for the next 30 years? From what I have read on the Boglehead forums the answer is that the 401K is the better of the two choices, but I would be interested to hear what anyone here has to say. Income-wise, I am about 150k/year and she is 42k/year. We live in a state with roughly 7% income tax.
 
PharmDminus said:
Hoping for some input on this. Debating on whether or not to fund my wife's 401k with high fees....My wife works for a small company and the expense ratio's in her 401K are ridiculous. The target date funds are 1.2%, the SP500 fund is the lowest of the choices at 0.7% (still very high). We have been putting the 18k max in her 401K for a few years now but as her account grows the high fees become an issue. She has 30 years until retirement and it is likely she will be with this company til then, so no rollovers to a cheaper bank like Vanguard or Fidelity. I guess my question is, should we be investing just the match and anything beyond that put into a post-tax account? Are the tax benefits of the 401K greater than the high fees on our money for the next 30 years? From what I have read on the Boglehead forums the answer is that the 401K is the better of the two choices, but I would be interested to hear what anyone here has to say. Income-wise, I am about 150k/year and she is 42k/year. We live in a state with roughly 7% income tax.
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I should add we are both currently maxing out 401k and roth, and we have 100% of her 401k allocated to the 0.7% er sp500 index fund
 
PharmDminus said:
Hoping for some input on this. Debating on whether or not to fund my wife's 401k with high fees....My wife works for a small company and the expense ratio's in her 401K are ridiculous. The target date funds are 1.2%, the SP500 fund is the lowest of the choices at 0.7% (still very high). We have been putting the 18k max in her 401K for a few years now but as her account grows the high fees become an issue. She has 30 years until retirement and it is likely she will be with this company til then, so no rollovers to a cheaper bank like Vanguard or Fidelity. I guess my question is, should we be investing just the match and anything beyond that put into a post-tax account? Are the tax benefits of the 401K greater than the high fees on our money for the next 30 years? From what I have read on the Boglehead forums the answer is that the 401K is the better of the two choices, but I would be interested to hear what anyone here has to say. Income-wise, I am about 150k/year and she is 42k/year. We live in a state with roughly 7% income tax.
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I would still go by the Boglehead rule of thumb in the wiki: 401(k) - Bogleheads

0.6% higher ER x 30 years < (15% qualified dividend tax + 7% state tax) x 1.5

which means you should still invest in the 401k plan.

I actually did a rough simulation in a spreadsheet considering:
- you use after-tax money for taxable so have less to invest ($18k x 0.65 = $11,700)
- you pay 22% qualified dividend tax every year on around a 2% dividend from your taxable balance
and the rule of thumb seems reasonable.
 
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PharmDminus said:
Hoping for some input on this. Debating on whether or not to fund my wife's 401k with high fees....My wife works for a small company and the expense ratio's in her 401K are ridiculous. The target date funds are 1.2%, the SP500 fund is the lowest of the choices at 0.7% (still very high). We have been putting the 18k max in her 401K for a few years now but as her account grows the high fees become an issue. She has 30 years until retirement and it is likely she will be with this company til then, so no rollovers to a cheaper bank like Vanguard or Fidelity. I guess my question is, should we be investing just the match and anything beyond that put into a post-tax account? Are the tax benefits of the 401K greater than the high fees on our money for the next 30 years? From what I have read on the Boglehead forums the answer is that the 401K is the better of the two choices, but I would be interested to hear what anyone here has to say. Income-wise, I am about 150k/year and she is 42k/year. We live in a state with roughly 7% income tax.
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Ugh that sucks. No brokerage window available to invest through? I think the terminology is "self-directed brokerage account" or SDBA. I see this in limited 401k's with high-ish fees.
 
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msweph said:
Has anyone heard of or used CIT Bank? Offering 1.3% for a savings account - which is slightly more than where I keep my emergency fund.

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I've never understood the fascination of keeping your emergency fund at the bank. At the very least put it in bond funds with the current uncertainty then if we get tax cuts move it back to stocks and continue to ride this bull market.

I think my emergency fund has made like 4 to 5% this year in high yield municipal bonds.
 
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msweph said:
Has anyone heard of or used CIT Bank? Offering 1.3% for a savings account - which is slightly more than where I keep my emergency fund.

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I have mine in Ally. Normally, it doesn't pay to chase interest. It's barely worth it unless you have a couple hundred k. And at that point, you probably should invest this money vs. having it in the bank. You can do CD ladder, 1/3 or half into 2 and 5 yr CD at 2.3% and half regular savings 1.15-1.3% for a bit more interest.

If you invest in bond fund, you have to invest in intermediate to long term to make to get 3-5%, which is very prone to interest hikes, higher interest cheaper bond (less value). With unemployment sub 5% and fed guidance, we will have 1-2 more interest hikes this year, making bond not a safe play. I would not put money in bond fund right now. This has been a good place to park in recession because there is no way they raise interest when unemployment was 8-10%, but not anymore. Short term bond will be less sensitive to interest rate but they are only give 1%ish also, so it's not worth it, just keep cash very liquid in the bank.
 
confettiflyer said:
Ugh that sucks. No brokerage window available to invest through? I think the terminology is "self-directed brokerage account" or SDBA. I see this in limited 401k's with high-ish fees.
Click to expand...
I work for a TPA firm managing 401k plans, and adding a SDBA is very common and not that hard to set up. In a small company, it might be worth your wife's time to simply ask the owner to add the option to the plan.
 
wagrxm2000 said:
I've never understood the fascination of keeping your emergency fund at the bank. At the very least put it in bonds with the current uncertainty then if we get tax cuts move it back to stocks and continue to ride this bull market.

I think my emergency fund has made like 4 to 5% this year.
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Liquidity.

But I generally agree. My emergency funds are parsed as follows:

Immediate and available
1) cash USD at home + foreign currency (Euro, GBP, and some yen).

Via ATM, within a few hours, outside of bank hours
2) some cash at my bank (basic savings)

During bank hours
3) some cash at my credit union in a certificate that pays 3% (up to $10k) and can cash out on a business day

Roth IRA, within 3 business days (sell position, settle, and wire transfer out)
4) this is where the bulk of my emergency fund sits invested, I can pull principal out without tax penalty.

I also consider my credit card lines as a form of emergency fund. I can transfer directly to my checking account (at some ridiculous interest rate) up to my credit limits (I have two $25k limit cards that link = $50k available, doesn't count as a cash advance for some odd reason). This is my "time to flee the country" money.



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BMBiology said:
I have not pulled the trigger yet on Apple stock.

Up swing: stock buyback, 2.5% yield

Down swing: the global economy deteriorates, challenging environment in China


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OK...this didn't end well. Almost bought Apple a year ago when it was < $100. It is now $157.


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BMBiology said:
OK...this didn't end well. Almost bought Apple a year ago when it was < $100. It is now $157.


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Better get yourself some Bitcoin before this bubble bursts.
 
WVUPharm2007 said:
Can't tell if joking...or recommending napalm to fight fires...
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It's not really worth it unless you have money you are completely willing to gamble. Impossible to know which way it will go but it did just double from it's recent low.
 
msweph said:
Has anyone heard of or used CIT Bank? Offering 1.3% for a savings account - which is slightly more than where I keep my emergency fund.

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Click to expand...
Should be fine since they are FDIC insured. You can even get a $100 bonus if you deposit $15k. But I like Ally Bank because they do transfers in 1 business day to most banks, and I have a Money Market Account with them as well that you can make ATM withdrawals and write checks from. Liquidity does matter.

If you keep cash at Vanguard, Prime Money Market is yielding 1.1% now, and the Tax-exempt Municipal MMs are around 0.6-0.7%.

Bond funds fluctuate in value a fair bit and can even wipe out your entire yield and then some if you buy and sell at the wrong times, so you shouldn't use them for your emergency fund.
 
If we're talking an emergency fund of $10k, it really doesn't matter where you keep it. Making $100, might as well have it where you have instant access but saying bonds wipe out your yield is just foolish.

Anyways, needing thousands of dollars instantly is never going to happen. There's always going to be a buffer period. Keep a small amount in the bank. We keep enough that it naturally gets restored each pay check plus one month. Everyone should be keeping their emergency fund where it can make money, not barely keeping up with inflation.

Remember an emergency fund is enough money to make it 3 to 6 months on the bare minimums. It shouldn't be tens of thousands of dollars. You aren't going on luxurious vacations. While this is hard for the average person who doesn't even save money, a pharmacist should be able to obtain this within the first year of working. Toss it in some vanguard funds and let it grow.
 
I cashed out some stocks a few months ago and bought some bitcoin. Nearly tripled my money today!
 
Bitcoin's rise is working on the greater fool principle. There are a whole lot of people that can apparently find people that are bigger fools than them.
 
When do you think the stock market bubble will burst?


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gwarm01 said:
Speaking of losing bets, NEOS continues to slowly drop in price despite getting FDA approval for a drug this spring. I'm going to hold out until the FDA rules on their extended releases amphetamine suspension later this year. I just need a little bump to make some profit before I cash out.
Click to expand...

Follow up: approaching the Q3 FDA approval deadline. NEOS is up 22% over the past month. I could sell today and make a 10% profit, but I think I'll set a stop loss and ride the train a little longer.
 
BMBiology said:
When do you think the stock market bubble will burst?


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I think a correction will be started with Facebook, not really expecting a crash though. It would take the market falling another 25% before I would get excited about buying stocks.
 
msweph said:
I'd sell. I just didn't so that with DRRX ( up 12%) and now I'm down 6% and holding

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I've got a stop loss order set about 5% lower than the current price which will still give me decent profit. I'll adjust that as the price goes up so I never lose too many gains, then when I sell it will just go back into my ETFs. I never play with more than a few hundred dollars on these trades.
 
Put These Charts on Your Wall…

My tiny 9.1% stake on EM and 25% on international did well this year. My small cap value domestic is sh1t tho, I have a lot more of those lol. Diversification at its best.
 
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