Stock Market

[KennyTheKangaroo]

the reason kenny the kangaroo asks is because kenny the kangaroo intends to hold a few stable, consistently profitable securities and has done so since kenny the kangaroo got started back in late 2008. one of the things that has kind of been a tough question is when/if to sell at least a portion of a holding in a company even though you itend to hold on to it in the long term.

[ExPatriatePen]

the reason kenny the kangaroo asks is because kenny the kangaroo intends to hold a few stable, consistently profitable securities and has done so since kenny the kangaroo got started back in late 2008. one of the things that has kind of been a tough question is when/if to sell at least a portion of a holding in a company even though you itend to hold on to it in the long term.

IMHO, you trade growth stocks (NVR being a notable exception) and buy and hold Dividend stocks.

If you really understand the market, you rotate from sector to sector based on the macro economic picture.

If you're even smarter, you hedge your growth stock position by going long your favorite in that sector and shorting the stock in that sector you think will be the biggest loser.

I'm not quite that smart.

[ExPatriatePen]

At 8:30am this morning the jobs report comes out of the DoL.

I'm going out on a limb and going to predict that not only is it disappointing, but that it will move the overall market lower.

Edit: the numbers are out and they're pretty much exactly spot-on consensus opinion.

Market is shrugging it off with a big meh.

Job growth over the last three months:

247k - November
196k - December
157k - January

It looks like deceleration to me... The unemployment rate climbs to 7.9

Now that the market has had a few minutes to digest the numbers, they don't look so good.

You should know by now that the market is decoupled from the first Friday of the month jobs report. As long as there isn't some totally unexpected number, the market will continue to inch upward as long as the Fed keeps the spigot open, at least in the near term.

The report is useless. It's +/- 100K. It will get revised next month and nobody will bat an eye at what the delta between what was reported for January on 1Feb and 1Mar really means.

While I agree that the behavior you're describing has been accurate for the past couple of years, that eventually there will be a return to corollation.

We've had a significant run over the last 30 days or so, this market will eventually look for something to use as an excuse for a correction. I mistakenly thought that it could be a bad job numbers report.

With earnings season coming to a close, the rally may just continue for another 30 days or so.

[KennyTheKangaroo]

you seem like a very macro economic foucus dude.

[ExPatriatePen]

you seem like a very macro economic foucus dude.

That's always been my bias.

[Tomas]

Funny stuff:

Morning: NY Post reported that Herbalife likely probed by FTC; shares drop by 10+%

Then the company denies it, and the shares fully recover (and then add some 1%) by the end of the day. (Though at roughly $35.50, they still trade well below the $45+ price the stocks had on the day of the Icahn-Ackman showdown)

[ExPatriatePen]

We've had a significant run over the last 30 days or so, this market will eventually look for something to use as an excuse for a correction. .

How you like me now?



In all honesty, I'm not sure what the market will do tomorrow.

[SirMario66]

So I just started my first real job and am starting to make some real money. I've always only kept money in my checking account and that never really got over $1500. I know pretty much nothing about the stock market and was thinking about investing most of the money I'm making now in a mutual fund. I don't really spend money so I don't need much in my checking acct. Anyone have any advice as to which sites to use to invest in a mutual fund and which mutual fund to invest in. I just want something safe but I figure it's better than just having it sit in my checking account doing nothing. Not planning on needing money for another 3-5 years. Thanks!

[columbia]

Definitely invest at least $5K in an IRA, which is the max allowed tax deduction/yr
(I wish I had started doing this much earlier is life.)

I assume you are your 20s and can deal with higher risk levels, in terms of the investing strategy.

I think EPP will second this and say, just stay away from the bond market.

[ExPatriatePen]

Definitely invest at least $5K in an IRA, which is the max allowed tax deduction/yr
(I wish I had started doing this much earlier is life.)

I assume you are your 20s and can deal with higher risk levels, in terms of the investing strategy.

I think EPP will second this and say, just stay away from the bond market.

You betcha, on all counts.

If you don't want to follow your investments everyday, stay away from momentum issues. Even at your young age. Buying the shares of stable enterprises which have paid dividends for dozens of years is a smart way to go. (see also: Clorox, PM, Heinz, etc...) OU won't get rich quick, but you won't lose it all quickly either.

[King Sid the Great 87]

So I just started my first real job and am starting to make some real money. I've always only kept money in my checking account and that never really got over $1500. I know pretty much nothing about the stock market and was thinking about investing most of the money I'm making now in a mutual fund. I don't really spend money so I don't need much in my checking acct. Anyone have any advice as to which sites to use to invest in a mutual fund and which mutual fund to invest in. I just want something safe but I figure it's better than just having it sit in my checking account doing nothing. Not planning on needing money for another 3-5 years. Thanks!

If your company offers a 401(k) and provides a match, contributing enough to get the full match is your first stop. If they provide target date funds, those do the heavy lifting of diversification for you.

That will cover your before tax investments. If you feel you can afford to invest more than that, next stop is a Roth IRA.

Make sure you are always growing your cash. When the good times were rolling five+ years ago, you could get into an ING savings account or CDs for 5-6% easily. If you are investing primarily in pre- and post-tax retirement vehicles, growing cash on hand is something that will enable you to consider retiring early. I work with a bunch of guys in their early 50's who technically have enough money to retire, but they spent their entire life socking money away in retirement accounts that they cannot access without penalty until they hit 59 1/2. The "have six months cash available" mantra is nonsense if you can afford to have more.

[SirMario66]

Ok thanks. Yeah I'm 21 so that seems to be what I'm looking for

[Fire0nice228]

good day for UVXY today

[Tomas]

So I just started my first real job and am starting to make some real money. I've always only kept money in my checking account and that never really got over $1500. I know pretty much nothing about the stock market and was thinking about investing most of the money I'm making now in a mutual fund. I don't really spend money so I don't need much in my checking acct. Anyone have any advice as to which sites to use to invest in a mutual fund and which mutual fund to invest in. I just want something safe but I figure it's better than just having it sit in my checking account doing nothing. Not planning on needing money for another 3-5 years. Thanks!

I'd advise AGAINST mutual funds, as they typically require quite a sizable initial investment (the minimum to invest through Vanguard is, I believe $3,000. Charles Schwab did offer funds in $1,500 increments - but their fund fees are quite high).

If you plan to occasionally have a few hundreds to invest, no-commission Exchange Traded Funds are the way to go (and TD Ameritrade offers ~100 funds commission-free). Here is what I advised to somebody in your position a few years ago:

viewtopic.php?f=5&t=54521&p=1792105&hilit=ameritrade#p1792105

Good luck!!

[ExPatriatePen]

Tomas, I often caution young/new investors to be wary of ETF's as they erode and don't always track the underlying investment over time.

I'd be interested in hearing your thoughts on the matter.

(also, I paged you in the Political thread on the subject of bond rating agencies)

[Tomas]

Tomas, I often caution young/new investors to be wary of ETF's as they erode and don't always track the underlying investment over time.

I'd be interested in hearing your thoughts on the matter.

(also, I paged you in the Political thread on the subject of bond rating agencies)

That's definitely true for some of the more "exotic" ETFs. However, on case of the very liquid "basic" ETFs that just track major indices (like $200B+ VTI), I'd say the deviations from the underlying value are negligible - especially when one considers investing over large horizons.

For example, put the checkmark next to S&P 500 here:
http://research.tdameritrade.com/grid/p ... earch=true

The tracking error is very, very small.

[JeffDFD]

So I just started my first real job and am starting to make some real money. I've always only kept money in my checking account and that never really got over $1500. I know pretty much nothing about the stock market and was thinking about investing most of the money I'm making now in a mutual fund. I don't really spend money so I don't need much in my checking acct. Anyone have any advice as to which sites to use to invest in a mutual fund and which mutual fund to invest in. I just want something safe but I figure it's better than just having it sit in my checking account doing nothing. Not planning on needing money for another 3-5 years. Thanks!

I'd advise AGAINST mutual funds, as they typically require quite a sizable initial investment (the minimum to invest through Vanguard is, I believe $3,000. Charles Schwab did offer funds in $1,500 increments - but their fund fees are quite high).

If you plan to occasionally have a few hundreds to invest, no-commission Exchange Traded Funds are the way to go (and TD Ameritrade offers ~100 funds commission-free). Here is what I advised to somebody in your position a few years ago:

viewtopic.php?f=5&t=54521&p=1792105&hilit=ameritrade#p1792105

Good luck!!

A few things:

Definitely do the company 401k first if they have a match...free money and you can't beat those returns (depending on if and what your company matches). Important note...you can't/shouldn't really touch this money until you get old and retire...but definitely start now!

You can open a ROTH IRA - you put POST tax dollars into it and then can take it out tax free when you retire (opposite of 401k). BUT - if you need the money, you can always take out the PRINCIPAL penalty free.

In regards to mutual funds - companies are getting competitive. In regards to what Tomas was saying - you do have to watch the fees, but you can find many free to trade Mutual Funds with low expenses at places like Schwab. Sometimes there is a higher initial investment (1500, 3000, higher) but then subsequent deposits can be much lower once your position is opened (500, 1000). Plus, a lot of the discount broker sites will have some real good deals on their own funds. I do not own it myself, but if you have a Schwab account, you can get "Schwab Fundamental US Large Company Index Fund" SFLNX for free, it has really low expenses, 4 star morningstar, and it only takes $100 to open a position and $1 for subsequent purchases. I would imagine you would find similar options at the other sites. Plus index funds are usually cheap no matter where you go (fee wise) if you go that route.

I would check out the various discount brokerage sites and see what and how much they are offering for free/low cost/low initial investment/etc..

Good luck

[columbia]

The employer matching is the most important.
I'm putt 4% of my gross into a 403b and my employer is kicking in fifty cents on the dollar.
I have it pegged to that percentage, so I don't have to worry about increasing my contributions, as my salary rises.
(We get annual raises, performances bonuses and profit sharing payouts.)

Also doing two purchases a month with an IRA.

The most important thing is to start early and keep at it.

[mac5155]

Since we're on the topic, I have about 10k$ in my 401k now. Can I use this to get a loan and pay myself back with interest?

[KennyTheKangaroo]

Definitely invest at least $5K in an IRA, which is the max allowed tax deduction/yr
(I wish I had started doing this much earlier is life.)

I assume you are your 20s and can deal with higher risk levels, in terms of the investing strategy.

I think EPP will second this and say, just stay away from the bond market.

Kenny the kangaroo will caution putting too much money in IRAs and so forth. Its obviously nice to have tha tmo ney stashed away for retirement, but remember that if you plan on buying a house or some other major purchase (car, wedding, whatever), it might be a wise choice to keep some of that money available. you can face tax and (sometimes) penalties for withdrawing ira money early.

[KennyTheKangaroo]

Since we're on the topic, I have about 10k$ in my 401k now. Can I use this to get a loan and pay myself back with interest?

yeah but its not a good idea.

[columbia]

Definitely invest at least $5K in an IRA, which is the max allowed tax deduction/yr
(I wish I had started doing this much earlier is life.)

I assume you are your 20s and can deal with higher risk levels, in terms of the investing strategy.

I think EPP will second this and say, just stay away from the bond market.

Kenny the kangaroo will caution putting too much money in IRAs and so forth. Its obviously nice to have tha tmo ney stashed away for retirement, but remember that if you plan on buying a house or some other major purchase (car, wedding, whatever), it might be a wise choice to keep some of that money available. you can face tax and (sometimes) penalties for withdrawing ira money early.

columbia has no interest in home ownership, but KtK is making a solid point for others.

[mac5155]

Since we're on the topic, I have about 10k$ in my 401k now. Can I use this to get a loan and pay myself back with interest?

yeah but its not a good idea.

why not? I'm just curious, It might be better than putting something on a credit card.

[KennyTheKangaroo]

depdending on the amount vested in your 401k, you are only allowed to w/d 50%. if you have less than $10k in the 401k, you can w/d as much as you want. if you have more than $10k, you are only permitted to take up to 50%.

if you leave your job, you have to pay the amount in full right away

[newarenanow]

I'm 34 and would like to retire by 62 or so. How much money do I need to retire if I plan on having my house paid off and just want to do some casual travel and live a reasonable lifestyle (maybe $50-60K in todays dollars) to retire?

How much should I have right now?

Does anyone have any of those calculators or a good site to point me to?