Yeah they ultimately won me over. Their platforms are super easy to use, very straightforward and they're probably second behind only VirtualBrokers in terms of cost, and also have ALL ETF's commission-free. And VirtualBrokers just seemed VERY discount, and I'm gonna pay that tiny bit more for the convenience.
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Stock-Age: Stocks, Options and Dividends oh my!
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Yeah they ultimately won me over. Their platforms are super easy to use, very straightforward and they're probably second behind only VirtualBrokers in terms of cost, and also have ALL ETF's commission-free. And VirtualBrokers just seemed VERY discount, and I'm gonna pay that tiny bit more for the convenience.
I was caught short NFLX at the beginning of the year. Left a huge gaping hole in my account.
Ether_Snake
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2014 begins, which means I'm rebalancing my tax free savings account and starting anew. Since I'm already heavily US-weighted outside of the this account, I'm going to be around 35% invested in the S&P, 30% in emerging markets, and around 15% and 15% in Israel and Japan. I have 5% not invested yet, will figure it out later.
I'm bullish on Japan's fundamentals, but not politically. It's a country full of corruption and lacks the transparency such a country would be expected to have, and while I believe the US will make Japan a big focus in the coming years it will also be a double-edged sword, and Fukushima remains a serious concern to me. I think prospects will be much better once Abe is out because all of what's on the table which makes sense to improve the economy is in no way inherent to Abe and his party, it will be continued and probably in better fashion when his party is defeated. What makes sense for Japan is obvious, there's no more taboo over admitting they had it wrong and need to turn things around, favor startups, improve women's conditions, etc., because they know they'll benefit economically from doing so.
The reason I added Israel is that I'm very confident in that country. Economic booms happen where the society has a motivation to build, something lacking in most developed countries these days. It's how Japan boomed after the war (and before), same for Germany, etc. This motivation is still in its infancy since it has gone through a lot of hurdles but I believe that the real growth will begin over the next decade now that the country has a better footing, entrepreneurs have more resources available, etc. I think worries over middle east wars and Palestine has actually kept a lid on Israel's valuation. The country's main issue is probably its small territory, as I believe the desire for a lot of Jews to live in Israel will grow significantly in the next years since it will become increasingly attractive economically. I don't think space will be enough of an issue to hamper economic growth in unpredictable fashion. Maybe it will be a bigger issue in 20 years.
30% in emerging markets is a lot, but again it's small considering the overall weighting it represents in all my investments. Then again, I like to look at this account as a whole, excluding what I have invested in outside of it, so it is sizeable.
I have nothing invested in developed countries outside what is mentioned above, so nothing in Europe, because I don't believe the US can go down significantly without Europe doing worst, stability there is much more volatile due to political/cultural fractions. Nothing invested in Canada because I don't see us doing better than the US in the coming years.
Biggest worry for 2014 will probably be China, but it might be time for things to balance out.
I'm bullish on Japan's fundamentals, but not politically. It's a country full of corruption and lacks the transparency such a country would be expected to have, and while I believe the US will make Japan a big focus in the coming years it will also be a double-edged sword, and Fukushima remains a serious concern to me. I think prospects will be much better once Abe is out because all of what's on the table which makes sense to improve the economy is in no way inherent to Abe and his party, it will be continued and probably in better fashion when his party is defeated. What makes sense for Japan is obvious, there's no more taboo over admitting they had it wrong and need to turn things around, favor startups, improve women's conditions, etc., because they know they'll benefit economically from doing so.
The reason I added Israel is that I'm very confident in that country. Economic booms happen where the society has a motivation to build, something lacking in most developed countries these days. It's how Japan boomed after the war (and before), same for Germany, etc. This motivation is still in its infancy since it has gone through a lot of hurdles but I believe that the real growth will begin over the next decade now that the country has a better footing, entrepreneurs have more resources available, etc. I think worries over middle east wars and Palestine has actually kept a lid on Israel's valuation. The country's main issue is probably its small territory, as I believe the desire for a lot of Jews to live in Israel will grow significantly in the next years since it will become increasingly attractive economically. I don't think space will be enough of an issue to hamper economic growth in unpredictable fashion. Maybe it will be a bigger issue in 20 years.
30% in emerging markets is a lot, but again it's small considering the overall weighting it represents in all my investments. Then again, I like to look at this account as a whole, excluding what I have invested in outside of it, so it is sizeable.
I have nothing invested in developed countries outside what is mentioned above, so nothing in Europe, because I don't believe the US can go down significantly without Europe doing worst, stability there is much more volatile due to political/cultural fractions. Nothing invested in Canada because I don't see us doing better than the US in the coming years.
Biggest worry for 2014 will probably be China, but it might be time for things to balance out.
Parts of my annual rebalance are still in flight, but they will all have landed by the end of the week.
Our Roth IRA's are 50/50 total US stock market, global ex-US stock index funds fund. The Roth 401(k) is the institutional S&P500 index from Vanguard, the only index fund on offer from my employer. Our college funds are moving to a 529 (finally), with the same 50/50 index mix as the Roth IRA's. When the kids enter high school, I'll move 10% of those funds to an inflation protected bond fund each year, so they hit college with half bonds, half stock.
Our savings funds migrated to a blended US and international stock and bond index fund. (Just an allocated bundle of index funds.)
So as of the end of next week, we'll be in 100% index funds outside of cash and company stock. I got out of bonds, as we have no need to stabilize the portfolio in exchange for lower returns. My older daughter won't be in high school for several years now, so hopefully interest rates ebb up by then and we avoid the drop.
I've become convinced that bonds don't have a role in my portfolio outside of our savings funds, or investments that we plan to utilize in a ~5 year horizon. They reduce volatility sure, but if we're not going to use the funds, there's no reason to care. It's just handing over lower returns in exchange for feeling better about market swings.
I'm starting this year feeling really good about where we're at and the strategy we're using, for the first time.
Our Roth IRA's are 50/50 total US stock market, global ex-US stock index funds fund. The Roth 401(k) is the institutional S&P500 index from Vanguard, the only index fund on offer from my employer. Our college funds are moving to a 529 (finally), with the same 50/50 index mix as the Roth IRA's. When the kids enter high school, I'll move 10% of those funds to an inflation protected bond fund each year, so they hit college with half bonds, half stock.
Our savings funds migrated to a blended US and international stock and bond index fund. (Just an allocated bundle of index funds.)
So as of the end of next week, we'll be in 100% index funds outside of cash and company stock. I got out of bonds, as we have no need to stabilize the portfolio in exchange for lower returns. My older daughter won't be in high school for several years now, so hopefully interest rates ebb up by then and we avoid the drop.
I've become convinced that bonds don't have a role in my portfolio outside of our savings funds, or investments that we plan to utilize in a ~5 year horizon. They reduce volatility sure, but if we're not going to use the funds, there's no reason to care. It's just handing over lower returns in exchange for feeling better about market swings.
I'm starting this year feeling really good about where we're at and the strategy we're using, for the first time.
Ether_Snake
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Which fund are you invested it for the one ex-US? Is it Vanguard too?
In the 529, it's this Vanguard fund. For the Roth IRA, it's a similar Fidelity index. The 529 options were picked by our state 529 plan, while our retirement funds are with Fidelity.
salivating...if it hits the 30s again i'm in...
Vanguard Total Bond Market Institutional. Approx 5 yr avg duration. Not trying to time the Bond market.
Ether_Snake
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I see. Thanks
SolarCity got upgraded today, nice bump.
Crazy how much better DDD has been doing compared to SSYS. Last I checked SSYS seemed to have better fundamentals, but whatever, that's why I invested half and half in both, for an average combined return of 37% so far
Same for solar stocks, except I'm half in TAN (ETF) and half in SCTY, average combined return of 27%.
I looked at my 401k, average return since 2006 of 7.94%.
When combining all my investments (including 401k) I'm around 55% stocks, 45% indices/etfs. I want to balance that further to around 35/65, but it will take some time.
Ether_Snake
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What do you guys think of Under Amour? I don't know the company well, I'm invested in NKE and am doing very well with that one (40% return) and am wondering if I should balance it with a bit of UA. I'm 100% confident in NKE, I wonder if it's worth it at all to balance with UA or maybe even Adidas.
the_log_ride
Member
subbed for research.
Oh how things have changed for MSFT and Apple since 2007, and the introduction of the iPhone. (The OP goes all the way back to 2007.)
Ether_Snake
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Got out of FitX at a great position. Lord what a rise that was. I may not smoke pot but I don't mind making a bit on those that will and do
lol nice, what did you buy at?
btw I think I will start splitting my NKE with ADS, 70/30, since I'm quite long term on NKE I prefer to balance it a bit. I'm too unsure about UA, I have a feeling they'll have a lot of difficulties growing in Europe. If they instead focused on non-traditional sports-related gear, like everything hiking/climbing/paintball/fencing/motorcycles/etc, I think they would have a chance to find their place, but the climb would be very steep. NKE and ADS are have done so much work already, I don't think there is much room.
RumblingRosco
Member
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Haha damn!!
Oh my god lol.
I'm happy NDN.TO is up 10% today. I haven't seriously invested much yet (just testing the questrade platform), but NDN.TO is one of the two stocks I bought. Yay!
Ether_Snake
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I love reading Garth Turner's Greaterfool. Funny tone, make what you will of what he says but IMO he has been right on the money on Canada by saying that people should put their money in the stock market, especially the US, maximize their TFSA contributions, etc., and not waste cash on houses. I love his writing style
All I hear around me these days is people who bought condos at most three years ago, who are now selling at a loss (yep, selling less than three years after buying), or seeing the value of all the houses around theirs go lower than when they bought, and want to move into their own house and never have to live in a condo ever again. There is a sense of rush in the air, mixed with slight fear, confusion, panic. They don't have the money to afford a small overly expensive condo, let alone a house and its responsibilities. But people don't want to go back to renting, their egos won't let be a chump among their friends. They'll get the loans, and then I am curious as to what will happen next.
I feel like when people rushed to buy Apple stock in 2012, and then panicked when it went down and doubled down, and then sold at a loss. People who had never bought stock before. Same behavior.
All I hear around me these days is people who bought condos at most three years ago, who are now selling at a loss (yep, selling less than three years after buying), or seeing the value of all the houses around theirs go lower than when they bought, and want to move into their own house and never have to live in a condo ever again. There is a sense of rush in the air, mixed with slight fear, confusion, panic. They don't have the money to afford a small overly expensive condo, let alone a house and its responsibilities. But people don't want to go back to renting, their egos won't let be a chump among their friends. They'll get the loans, and then I am curious as to what will happen next.
I feel like when people rushed to buy Apple stock in 2012, and then panicked when it went down and doubled down, and then sold at a loss. People who had never bought stock before. Same behavior.
RumblingRosco
Member
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BigWeather
Member
I held on through the plummet and while the last couple of years were nice and I'm finally ahead of where I was in 2007 I have lost six years on the process. Tempting to move out of the market now while it feels near its peak and then re-enter after a significant dip. Given that I'm 40+ and getting closer to retirement I'm not sure how many more 2007 - 2013 rollercoaster rides I can afford to do.
Ether_Snake
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The thing is they are doing worst than that, they are selling to buy the new hot thing. Most people my age were renters a few years ago, and I recall very well in 2008-2009 everyone was talking about how they were going to buy a condo, or had just bought one, and it was a self-feeding loop since you would not pass for a winner to stay a renter. Now almost all of them have hated living in a condo, and just as when it was uncool to be a renter it's now uncool to own a condo, which leads to a new self-feeding loop where people are looking into buying houses instead, even though all of them just lost money selling their condos bought less than five years ago. So really, people are making serious financial decisions based on what their other colleagues/friends did, and whenever I talk about the responsibilities of owning a house people cut it short. After all, if one of their friends can own a house, why not them?
It looks just like how bubbles form to me. Hype, people get burned, others are quick to hop in a new fire and all others follow without knowing what they're jumping in, thinking it's salvation from what they went through.
percephone
Neo Member
I'm 40+ too.
Why don't you put stop orders on your positions? You can always buy back when it start to trend upward again.
My first broker used to insist i give him a stop order with my buy order. I think that's why i never really had a big loss. I change my stops regularly to follow my gains but never lower them.
When i put my buy order. I set an initial stop that will reduce my risk to a loss of less than 1.5% of my total account equity including broker fee and slippage. If the stock volatility is such that i cannot put a stop safely. I won't buy into the position.
I love reading Garth Turner's Greaterfool. Funny tone, make what you will of what he says but IMO he has been right on the money on Canada by saying that people should put their money in the stock market, especially the US, maximize their TFSA contributions, etc., and not waste cash on houses. I love his writing style
All I hear around me these days is people who bought condos at most three years ago, who are now selling at a loss (yep, selling less than three years after buying), or seeing the value of all the houses around theirs go lower than when they bought, and want to move into their own house and never have to live in a condo ever again. There is a sense of rush in the air, mixed with slight fear, confusion, panic. They don't have the money to afford a small overly expensive condo, let alone a house and its responsibilities. But people don't want to go back to renting, their egos won't let be a chump among their friends. They'll get the loans, and then I am curious as to what will happen next.
I feel like when people rushed to buy Apple stock in 2012, and then panicked when it went down and doubled down, and then sold at a loss. People who had never bought stock before. Same behavior.
Interesting read, and it definitely makes sense. Even though the housing prices in my area (Minnesota) arent ridiculous, I really have no strong desire to stop renting and buy a house.
What's Stock-Age's opinion on Bonds? I'm not sure if I should even allocate anything into them, and if so how much (in % of total portfolio) and what term max. And I'm trying to find some good info on how Coupon/YTM interplay, but damn it's hard to find good info on that. So I'd appreciate it someone was able to put that in simple terms.
Here is the question you have to honestly answer for yourself. "Am I going to sell my portfolio at the worst possible time (the next time things crash, and they will)?" Its hard to really know the answer to that until it happens. But if you end up buying high and selling low during a crash because your investments are too risky for your own risk tolerance then you are not holding enough bonds and it probably cost you a ton of money.
A lot of people around here sound like they are investing in very risky penny stocks and other high risk instruments that are all about looking for short term gains. So I guess that some may tell you to hold 0% in bonds around here.
Here is a link to a recent decent article by Rick Ferri:
http://www.rickferri.com/blog/investments/a-reason-to-own-bonds/
Well I won't be investing much into individual stocks for obvious reasons, I don't have the time or risk tolerance for that. I'll dabble in it a bit with money I can easily afford to lose.
The vast majority I'll be investing in total/branch index funds, but I'm not sure if I should allocate a percentage into bonds, for some stability.
I can afford to not sell when the market is low, I'm not going to invest the money I'm "using on a day to day basis", so to speak. I want to treat it as saving for later and maybe get some extra income.
But given how non-transparent the bond market appears to be (Questrade has a nice list, but the terms are hard to understand and wade through), I'm a bit lost.
I don't have an opinion on the bonds vs. Stocks allocation, but I want to comment on the frequent recommendation around here to buy bond funds.
For those looking to diversify into bonds, you should buy actual bonds, not bond funds. Bond prices are subject to considerable volatility (although generally less than most stocks) and because the fund constantly trades the bonds, your investment will end up fluctuating with the whims of the market...and it becomes more like owning a conservative dividend stock than an actual bond.
Bond funds, IMO, violate the very principle of investing in bonds: that you get your money in full, with interest. It shouldn't matter what your bond's price is except when buying it.
That's not what bond funds offer and it's misleading to suggest those funds will have the same effect as holding the real thing.
For those looking to diversify into bonds, you should buy actual bonds, not bond funds. Bond prices are subject to considerable volatility (although generally less than most stocks) and because the fund constantly trades the bonds, your investment will end up fluctuating with the whims of the market...and it becomes more like owning a conservative dividend stock than an actual bond.
Bond funds, IMO, violate the very principle of investing in bonds: that you get your money in full, with interest. It shouldn't matter what your bond's price is except when buying it.
That's not what bond funds offer and it's misleading to suggest those funds will have the same effect as holding the real thing.
But its a lot easier and more diversified to buy a bond fund. If you plan to buy and hold and not be affected by the daily price fluctuations then in principle a bond fund like Vanguard Total Bond Market is much safer and more liquid than investing in random individual bonds... much lower individual default risk, much easier to sell if needed, etc... that is unless you have a hundred million or so or more of your own to put into bonds (in which case you probably wouldn't be asking questions on this forum about what to do with it).
Don't get me wrong, I don't think they're bad or anything. I just think they aren't true diversification because they are closer to a conservative stock than to a bond, in practice.
They give the false impression of being fully diversified.
I get what you are saying but a bond fund is not like an individual conservative stock. (E.g. people used to say that GM was a good conservative Blue Chip stock. Until it went to zero...) It is hard to believe you will see Vanguard Total Bond Market go to zero, and if it does you probably have much bigger things to worry about than that (like possibly food and shelter and warmth). Bonds pay you every month, many stock funds don't. You could make an argument that a conservative high dividend stock paying fund is similar to a Bond fund. But I think they're different. One holds AAA bonds that are required to pay you, the other holds stocks that could change their dividend at any time.
Regarding being "fully diversified". Unless you have 100 million dollars or more to invest in Bonds, then owing a bond fund is much more diversified than holding a few individual bonds which could default or become illiquid in the future for one reason or another.
That's what I think anyway.
Bad example, automakers are cyclical, they always have been and always will be.
A better example would be WMT, a defensive stock because its stores tend to do better in tough economic conditions as shoppers go downscale.
Let's take them side-by-side:
Bond fund: Stock into an entity that owns bonds as a revenue source
WMT:Stock into an entity that owns discount stores as a revenue source.
I wouldn't recommend to anyone that Walmart or Berkshire - Hathaway or any individual stock or even a conservative stock fund could take the place of holding a good bond fund or a diversified portfolio of bonds. A lot more risk with the stocks than the bonds IMO. But to each his own I guess.
Ether_Snake
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Lol, Garth posted the mail I sent him, summing up what I said earlier about the condos, he changed my name to Randi
http://www.greaterfool.ca/2014/01/12/the-road-ahead/
He didn't answer my question about the CMHC though, I wondered if they are still backing all those bad bank loans. Former GS dude has been put at its head. Spooky.
I'm really wondering what to do with the damn falling CAD. I hate seeing my money getting diluted like this. Good thing a lot of my investments are in USD and were made some time ago, but it's getting more expensive to buy. It will probably help soften the fall of the Canadian economy though. Maybe if I'm going to hold any CAD, I should put some in energy/mining, it rocked bottomed for a while, I doubt it will go further down with a falling CAD. Don't really feel like it though, returns won't be better than alternatives.
http://www.greaterfool.ca/2014/01/12/the-road-ahead/
He didn't answer my question about the CMHC though, I wondered if they are still backing all those bad bank loans. Former GS dude has been put at its head. Spooky.
I'm really wondering what to do with the damn falling CAD. I hate seeing my money getting diluted like this. Good thing a lot of my investments are in USD and were made some time ago, but it's getting more expensive to buy. It will probably help soften the fall of the Canadian economy though. Maybe if I'm going to hold any CAD, I should put some in energy/mining, it rocked bottomed for a while, I doubt it will go further down with a falling CAD. Don't really feel like it though, returns won't be better than alternatives.
ToyMachine228
Member
Looking for some advice. I'm looking to make a few small penny stock-esque investments. I'm wondering if there are any decent ways to make small, long term investments in e-sports (I'm thinking something like Twitch makes sense but there's no obvious way to do it that I can find) or MMA. Any advice, tips, places to look?
Penny stocks are risky. If you are sure you want to dive into something like this, I'd suggest you read more on what you are going to get yourself into. With penny stocks you could lose everything instantly.
ToyMachine228
Member
Looking at investing extremely small amounts of money. Like $100 here and there. I just made my first investment in 2013. Not looking to drop any serious money. Just getting started.
You could try to find some smallcap stocks but those are risky as well...
Take a look at NVAX...it's between $5-6 a share. I think it will double in 2014, but don't take my word for it. You need to do research and then reach your own conclusion.
You could buy 15-20 shares as a start and see what happens.
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