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Here's a good gauge if your picks beat the market as a whole, look at the market index.
I tried to pick the largest, low risk/return, diversified, no-brain low cost index options out there.
Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) - 1 year return - 17.47%
Vanguard Value Index Fund Investor Shares (VIVAX) - 1 year return - 15.20%
Vanguard Large-Cap Index Fund Investor Shares (VLACX) - 1 year return - 16.13%
If you look at more growth oriented stock indexes, it's drastically different.
Vanguard Mid-Cap Value Index Fund Investor Shares (VMVIX) - 1 year return - 19.34%
Vanguard Extended Market Index Fund Investor Shares (VEXMX) - 1 year return - 26.93%
Vanguard Mid-Cap Growth Index Fund Investor Shares (VMGIX) - 1 year return - 30.37%
It is interesting no mention is made of when the performance is from, as a 1 year performance of 14% is extremely different then a 6 month or 5 year performance of 14%. That is the most important indicator of total performance, but no time frame has ever been stated.
What it shows is that it is hard to do poorly when everything is recovering at a very high rate.
What do you mean I am down? I am up big time! Look at my extraordinary returns.
You would need to tell us the date you bought all your stocks and your entry price. We know your account is worth over $10,000 so telling us the dates you bought your stocks and at what price, can be helpful and is in no way personal info, because we already know personal info, your account value.
So, you will hold your 27 shares of BAC until you have a profit?
And how long will you wait?
That is the point, you do not own enough BAC, to even own the stock.
Your 27 shares are worth $364.00 and you have a loss of 27.64% or
$139, so you paid $503 for your BAC or $18.62.
How many months or years will you wait for it to go back from $13.46 to $18.62 so you can get out?
Sell your BAC now and use $185 to buy a January 2013 $15 call option and HOPE IT IS A MISTAKE TO SELL YOUR STOCK.
Do you know what that means?
It means, if you are WRONG to sell your stock it will go WAY up, and your call option will too.
Forget mutual funds. The fund managers will be in and out of stocks so fast you won't know what you own. You need to decide to manage your own, or turn it over to a mutual fund.
Ok, you are young and do not need the money for a long time. That is a very good reason to put some high reward tech stocks, into your account.
So, on BAC you are wanting the stock to go up over $5.00 per share for you to recover ONLY $139.00?
There are many, many easier ways to make $139 with stock or options versus having to wait for BAC to go up $5.00.
You are thinking pennies and nickels, when you need to be thinking dimes, quarters and dollars.
Is it ok to disclose personal info here? I don't want to get in trouble for CD nor myself.
I am willing to wait until it goes goes in profits. I am not an expert in trading. I know it may not be a good strategy.
I have C so having BAC would not diversify me.
I have not got into options trading yet.
I use Tradeking. What do you use?
Mathjak relies on a Fidelity newsletter that he has been using since 1987.
I guess I got LOTS to learn.
Quote:
Originally Posted by howard555
You would need to tell us the date you bought all your stocks and your entry price. We know your account is worth over $10,000 so telling us the dates you bought your stocks and at what price, can be helpful and is in no way personal info, because we already know personal info, your account value.
So, you will hold your 27 shares of BAC until you have a profit?
And how long will you wait?
That is the point, you do not own enough BAC, to even own the stock.
Your 27 shares are worth $364.00 and you have a loss of 27.64% or
$139, so you paid $503 for your BAC or $18.62.
How many months or years will you wait for it to go back from $13.46 to $18.62 so you can get out?
Sell your BAC now and use $185 to buy a January 2013 $15 call option and HOPE IT IS A MISTAKE TO SELL YOUR STOCK.
Do you know what that means?
It means, if you are WRONG to sell your stock it will go WAY up, and your call option will too.
Forget mutual funds. The fund managers will be in and out of stocks so fast you won't know what you own. You need to decide to manage your own, or turn it over to a mutual fund.
Ok, you are young and do not need the money for a long time. That is a very good reason to put some high reward tech stocks, into your account.
So, on BAC you are wanting the stock to go up over $5.00 per share for you to recover ONLY $139.00?
There are many, many easier ways to make $139 with stock or options versus having to wait for BAC to go up $5.00.
You are thinking pennies and nickels, when you need to be thinking dimes, quarters and dollars.
Saying you won't sell even when you're down is a real killer. I said the same thing to myself when C was down $20 a share. Then I got real, talked with an advisor, and sold it. I then did my homework, bounced my ideas off my little brother who trades in volatility and options, and has the background to prove it, then shorted C down to $7 a share with upside protection. Got back some of my money, but not all.
By all indications the massive liquidity binge that the capital markets have loathed but investment banks have reveled in seems to be tapering off. Typically the big boys will invest in something, inflate bubbles, draw it down and invest in other things, and inflating different bubbles. This is constant in the money supply. The Fed has injected something like $2 trillion into the capital markets through Quantitative Easing (or as I like to call it, print dough and bomb away, Helicopter Ben!). The similar concept of liquidity and inflating lots of bubbles seems like a broken record to me. It's eerily similar to just prior to 2007.
So, let me ask you this: if I'm right and the Fed starts drawing down on its QE and restricts the money supply .. are you ready for the resulting selloff as people have to cover their margin calls? As banks are required to bring money back in to restore their reserve requirements?
Would you still be buying and holding all the way down to a DOW of 9,000?
"Buy LOW, sell HIGH." It seems you do not understand. It sounds like you're a junkie, addicted to your measly 14% returns on your paltry savings. The boys on Wall St. are just waiting for some sucker like you to give them your money and meanwhile selling off their MUCH LARGER share holdings to others at a discount, and you're left with a deflated value.
The limit to sell is different for everyone. For me, it is whenever the stocks are up 10% or down 10% YOY. Short term if it falls 10% I wait a little to see if it recovers and/or the company realizes what's going on. If it doesn't then I sell. Simple. Buy low (hopefully), sell high (hopefully).
But that is just my margin account which is small compared to my bigger (by a factor of 10) eggs ... my Roth and my 401(k). I'm not long on any individual company. EVER. But I am long on the US economy in general.
You seem to have your priorities mixed up if you are willing to dump every spare dollar you have into the stock market. $1000 is great for a mutual fund or ETF of your choice. Nothing much more.
Well with 401K you are holding it for years and years while dollar cost averaging.
When there are sell offs, I just add more shares when the market is bear.
If DOW goes to 9K, I will just buy more shares, it will just dollar cost average.
I thought 14% was better then the DOW that has return about 12% in the past 80 years?
Quote:
Originally Posted by eskercurve
Five words.
You are not Warren Buffet.
Saying you won't sell even when you're down is a real killer. I said the same thing to myself when C was down $20 a share. Then I got real, talked with an advisor, and sold it. I then did my homework, bounced my ideas off my little brother who trades in volatility and options, and has the background to prove it, then shorted C down to $7 a share with upside protection. Got back some of my money, but not all.
By all indications the massive liquidity binge that the capital markets have loathed but investment banks have reveled in seems to be tapering off. Typically the big boys will invest in something, inflate bubbles, draw it down and invest in other things, and inflating different bubbles. This is constant in the money supply. The Fed has injected something like $2 trillion into the capital markets through Quantitative Easing (or as I like to call it, print dough and bomb away, Helicopter Ben!). The similar concept of liquidity and inflating lots of bubbles seems like a broken record to me. It's eerily similar to just prior to 2007.
So, let me ask you this: if I'm right and the Fed starts drawing down on its QE and restricts the money supply .. are you ready for the resulting selloff as people have to cover their margin calls? As banks are required to bring money back in to restore their reserve requirements?
Would you still be buying and holding all the way down to a DOW of 9,000?
"Buy LOW, sell HIGH." It seems you do not understand. It sounds like you're a junkie, addicted to your measly 14% returns on your paltry savings. The boys on Wall St. are just waiting for some sucker like you to give them your money and meanwhile selling off their MUCH LARGER share holdings to others at a discount, and you're left with a deflated value.
The limit to sell is different for everyone. For me, it is whenever the stocks are up 10% or down 10% YOY. Short term if it falls 10% I wait a little to see if it recovers and/or the company realizes what's going on. If it doesn't then I sell. Simple. Buy low (hopefully), sell high (hopefully).
But that is just my margin account which is small compared to my bigger (by a factor of 10) eggs ... my Roth and my 401(k). I'm not long on any individual company. EVER. But I am long on the US economy in general.
You seem to have your priorities mixed up if you are willing to dump every spare dollar you have into the stock market. $1000 is great for a mutual fund or ETF of your choice. Nothing much more.
believing you wont sell a stock when its down is reason enough not to do what your doing.
buying individual issues with no strategy and random picking with no real research is a helter skelter spin the wheel at best.
taking on individual company market risk and marrying the stock can kill you.
a good investor uses stop losses and right or wrong if things go down he is out of it.
heres the problem doing it your way:
as humans we hate loosing money more then we like making it.
rationally we think we will be able to sort things out in our mind if things drop and make the right decisions to bail or not before we loose to much.
the truth is there is another part of our brain thats used according to research by jason zweig that is totaly not logical at all and makes us do the wrong things at the wrong times.
when markets started to drop in 2008 and we were off our highs at first, no problem ,just a normal market day to us.
then our stocks dropped more.
well we will just wait until things turn around we said then we will take our profits and sell.
stocks drop even more ,well now you dont know if its a general market drop or somethings up with your individual issues.
more drops, well cant sell now im down to much you say.
more drops, your freaking out as not only is the market plunging but there are big problems surfacing in your individual issues.
dont forget nobody ever dreamed that the likes of gm,citi,aig ,ge bank of america, lehman,merryl etc could ever be gone nor had any other problems other then the markets were falling..
well even if there are issues you say they will resolve and ill sell when we come back a bit from these lows.
you only assumed it was a general market drop at first and you would ride it out. now your down big time and your brain wont let you take this loss. eventually those issues are gone and so is your money.
more typically the above is what happens if you have no solid plan for getting out of individual issues .
funds only take on market risk ,sure as the sun rises markets will eventually cycle around and you should be okay. no reason to sell or panic.
your playing with individual stocks is a speculation at best and marrying them makes it even worse. those issues your down in may never come back ,even if markets soar your done for.
the greatest analysts on the planet with the most sophisticated software cant get this stuff right long term , what makes you think your dabbling will ?
Yup, very true. However, at the end of the day what options do we have? Stocks are the most efficient way to invest capital. Also its important to mention that everything you do in life has risks. If there is a small chance that your car will crash and you will be killed. Does that mean you shouldn't drive?
Yup, very true. However, at the end of the day what options do we have? Stocks are the most efficient way to invest capital. Also its important to mention that everything you do in life has risks. If there is a small chance that your car will crash and you will be killed. Does that mean you shouldn't drive?
it means yes some people shouldnt drive.. some people dont have the skill to drive or invest in high risk areas and they SHOULD NOT be dabbling in playing with individeual issues. its also not just about stocks. there are other asset classes that shine as well. betting on 1 part of the market cycle and ruling out the rest can be a loosing game.
the last decade saw bonds shine, gold was a star. commodities did well. reits were the winners the past 3,5,10,15 year periods.
its all about owning them all and not guessing which is next to rise or fall.
just owning gold,a total market fund, long term treasuries and cash has beat the pants off most every combo. for the last 35 years doing nothing but re-balancing has had that mix returning over 9% a year cagr with only 25% in equities. it was down 3 or 4x slightly in 40 years and was up solidly in 2008 when equities fell 45%.. all with 50% less risk then the s&p 500 .
investing is not about gains... ill repeat that, investing is not about gains. its about getting the maximum return for the lowest risk you can take to get that return.
a speculator throws money into a bet on something and wins big big if they are right but loose big if they are wrong.
a skillful investor can get nice gains but balance out that risk so the losses are much smaller if your wrong and the daily volatility is at a point where you stay in the markets long term.
going 100% equities and finding out after things fall you dont have the stomach for it and bailing and loosing money serves no good to anyone . but thats what 2008 taught folks. regardless of age the pucker factor destroyed there investments as they bailed and ran instead of rebalancing or adding more money. they thought equities were the only way to invest so they never diversified .
folks like to bet only on equities because when markets are going up they think they are successful investors but then they bail and run for the hills when things drop and give those gains back.
its sooooo bad morningstar actually tracks small investor money in and out of investments. they found the small investor left to his own devices got 1/3 the gains of the actual funds because they do the wrong thing at the wrong time.
Last edited by mathjak107; 04-06-2011 at 03:11 AM..
You can send personal messages to people you want to communicate with.
You have not told how long you will wait for BAC to go up $5.00 so you can sell. How long will you wait?
Bonds, mutual funds are harder than options. There are 1000's mutual funds.
For trading I use Charles Schwab Street Smart Pro and Street Smart Edge.
Online commissions are $8.95. What do you pay?
You have made 14%. But 14% of what?
You plan to wait for BAC to go to $18.00 so you can sell. You could sell now, and invest the $187 in a Jan. 2013 $15 call option. It lets you CONTROL 100 shares of BAC. That is 100 shares. Another way to control 100 shares is to pay $1346.00 for the stock. The option giving you almost two years for performance is $187.00.
My only current non ETF holding is LYNAS corporation,a rare earth company out of Australia,and they are the hottest thing from there since Amanda Drury! LOL.They will have a monopoly on rare earths mined in the western world for about 3-4 years.Sells for $2.50 a share,and there are 1.7 Billion shares floating,and I expect price dips from time to time as the original owners lock up period expire.Rare earths are needed for every green technology out there,as well as iphones,PC's,windshields,etc.The only other thing I own is SILVER,which I expect to go to $55 by 30 June.Just a hunch.Good Luck to everyone.
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