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I admittedly DO NOT understand the Stock Market in total and what I'm going to do, before totally swearing it off, is I'm going to go into a full-fledged in-depth study. I'm going to be looking more into the Stock Market, the Bond Market, how Macro economies affect them both, etc. I come to this with my "theories" on the Stock Market already, but I think I should at least seek to fully understand it before throwing it out the window.
That's a very fair approach. And whatever you decide to do with your money at the end, the study won't be wasted. Learning's always a good thing!
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Seeing as though I don't fully understand the damn thing (The Stock Market) it makes no sense to swear it off. Like I said, if I can understand this damn thing and incorporate it, giving me a 7% return over the next 32 years rather than an average of 3%, it will be ALL worth the additional study.
Plus with the Fed about to increase rates, stock prices are going to go down to maybe "discount" levels, which means that would be the perfect time for me to enter the Market rather than entering "tomorrow" while the stocks are trading seemingly in an over-valued state.
Right on both accounts! And a bear market is definitely a young investor's friend.
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Guys like me (very conservative investors) should be welcome around the Investment Community more because everybody should hear out our point of view. Trust me, it's not that we don't want to make more money "on our money", it's just that we aren't trying to LOSE our hard-earned money because The Lord knows, I have gone through a significant amount of trouble to get to where I'm at. I'm talking sleep-less nights, emotional breakdowns, stress out of the REAR, etc.
I do understand your fear of losing money; everyone has it to a greater or lesser extent. But it can be a costly mistake to allow that fear to dominate your investment decisions. Everything we do with money involves risk in the end. At some point, you ARE going to lose money. But if you can keep the losses low and the overall gains high enough, you'll come out all right in the end, which is what matters.
Got it. I'm going to start this in-depth study and post some updates. Before I go though, can I just rant for a minute? You have been around the Stock Market investing community longer than me, can you explain why Stock Investors say some of the following statements which honestly, do nothing but further PUSH conservative guys like me OUT of investing in Stocks?
They say this stuff:
#1.) Statement One
Stock Investor: "Only invest in the Stock Market what you can afford to lose, put in what you plan on losing and if you win instead, then great!"
Tucker 99's and Other Conservative/Safe Fixed Rate Investor's Mentality: What in the blue devil hell does this guy mean only invest what I can afford to lose?? I can't afford to lose ANYTHING! What the hell is the purpose of investing if I'm going to lose money, if I want to lose money I will take that money and go down to the strip club with it. AT least I get some entertainment out of the process of flushing the money down the toilet!
Tucker 99's Suggested Use Of Language By The Stock Investor: Understand this is the dumbest statement you can make to a conservative/safe fixed rate of return investor. We are savers by nature, the reason we put so much into savings is to FIRST AND FOREMOST protect what's already been earned. When you talk about only "invest" what you can "lose", we come to the automatic conclusion that we can't invest ANYTHING because we aren't looking to LOSE anything. I mean come on, who the hell invests just to lose money? That is the stupidest statement I have ever heard but yet it's repeated over and over and over.
#2.) Statement Two
Stock Investor: "Stock Market returns aren't guaranteed, but you are stupid for only investing in low risk investments because historically Stock Market returns are higher, even though I can't give you a prediction of how high they will be going forward other than using previous performance charts."
Tucker 99's and Other Conservative/Safe Fixed Rate Investor's Mentality: Stop talking out of both sides of your mouth dude! You want me to leave a guaranteed rate of return and go to a vehicle that I have no idea what the rate of return is going to be, just an estimate. Stop talking like Stocks are guaranteed to perform well, when in fact they might not.
Tucker 99's Suggested Use Of Language By The Stock Investor: PLEASE just tell the conservative/safe fixed rate investor that they have an "opportunity" to make more with the Stock Market, stop telling them that they are 100% GOING to make more like it's a guarantee because it's NOT! All you are doing is further pushing the guy out of the damn market!
Stock Investor: "Only invest in the Stock Market what you can afford to lose, put in what you plan on losing and if you win instead, then great!"
Tucker 99's and Other Conservative/Safe Fixed Rate Investor's Mentality: What in the blue devil hell does this guy mean only invest what I can afford to lose?? I can't afford to lose ANYTHING! What the hell is the purpose of investing if I'm going to lose money, if I want to lose money I will take that money and go down to the strip club with it. AT least I get some entertainment out of the process of flushing the money down the toilet!
Tucker 99's Suggested Use Of Language By The Stock Investor: Understand this is the dumbest statement you can make to a conservative/safe fixed rate of return investor. We are savers by nature, the reason we put so much into savings is to FIRST AND FOREMOST protect what's already been earned. When you talk about only "invest" what you can "lose", we come to the automatic conclusion that we can't invest ANYTHING because we aren't looking to LOSE anything. I mean come on, who the hell invests just to lose money? That is the stupidest statement I have ever heard but yet it's repeated often and often and often.
Context to this statement is really important. IMO, this statement applies more (probably you can append only too) when you're investing in individual stocks and not when you're an index investor. Yes, technically you're index investment can go to 0 (if we take going to 0 as the definition of 'affording to lose') but if that were to happen well then probably we're in apocalypse and everybody is packing & moving to mars .
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Originally Posted by jotucker99
#2.) Statement Two
Stock Investor: "Stock Market returns aren't guaranteed, but you are stupid for only investing in low risk investments because historically Stock Market returns are higher, even though I can't give you a prediction of how high they will be going forward other than using previous performance charts."
Tucker 99's and Other Conservative/Safe Fixed Rate Investor's Mentality: Stop talking out of both sides of your mouth dude! You want me to leave a guaranteed rate of return and go to a vehicle that I have no idea what the rate of return is going to be, just an estimate. Stop talking like Stocks are guaranteed to perform well, when in fact they might not.
Tucker 99's Suggested Use Of Language By The Stock Investor: PLEASE just tell the conservative/safe fixed rate investor that they have an "opportunity" to make more with the Stock Market, stop telling them that they are 100% GOING to make more like it's a guarantee because it's NOT! All you are doing is further pushing the guy out of the damn market!
I don't think anybody here on this thread has guaranteed any sort of return on the market. The overall sentiment has been that historically markets have moved up (2/3rd of time) and with history (in terms of factors) always repeating itself we're mostly only going to see an upward trajectory.
A conservative investor has to understand that s/he is entering a different part of the investing world and equip themselves with the know-how on how to navigate this side of the world. If the conservative investor were to look for investments using the same filters that they have used in the 'guaranteed'
return part of the world well they are going to lose track, become fearful and ultimately take the next flight out of this world so to speak.
I would add that there is risk in not taking risk. Compound that safe decision over decades and the impact can be massive and potentially life-changing.
My 401K (via employer) is with charles schwab for many years. I have been maxing out my contributions every year last few and current balance is ballpark 250k. When I logged in and checked my "personal performance" this year YTD, it shows about 3.4%. I was like that's too low! Right? (Last year's return was about 6%).
it is not low. my YTD was 3.93% as of July 31st. (it looks like im down about 2% since then)
I would add that there is risk in not taking risk. Compound that safe decision over decades and the impact can be massive and potentially life-changing.
When did I say I didn't take risks? I think operating a business is the riskiest investment one can have.
Context to this statement is really important. IMO, this statement applies more (probably you can append only too) when you're investing in individual stocks and not when you're an index investor. Yes, technically you're index investment can go to 0 (if we take going to 0 as the definition of 'affording to lose') but if that were to happen well then probably we're in apocalypse and everybody is packing & moving to mars .
There are years when the S&P has had negative returns. 2008, 2002, 2001, 1981, just to name a few. But I agree with you, overall the S&P has been positive over the historical time frame.
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Originally Posted by ThisDamnLife
I don't think anybody here on this thread has guaranteed any sort of return on the market. The overall sentiment has been that historically markets have moved up (2/3rd of time) and with history (in terms of factors) always repeating itself we're mostly only going to see an upward trajectory.
Yes, I know they don't use the phrase "guarantee" but they are presenting it as a "guarantee". When you say the following, "Tucker99 by having your money in CDs and not in Stocks, you are losing out on more gains by not having more of your money in Stocks," then you are presenting Stock Investing as a guaranteed way of making more than CDs.
Make sense?
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Originally Posted by ThisDamnLife
A conservative investor has to understand that s/he is entering a different part of the investing world and equip themselves with the know-how on how to navigate this side of the world. If the conservative investor were to look for investments using the same filters that they have used in the 'guaranteed' return part of the world well they are going to lose track, become fearful and ultimately take the next flight out of this world so to speak.
That's why I want to take my time. I like Dave Ramsey's statement of, "The only people that get hurt on roller coasters are those who jump off of them."
Dave Ramsey and MathJak both recommend a long term, diversified approach to Stock investing with funds in the largest companies in the US (and globally).
If I were to do this, that's how I would do it, diversification is one of the hedges against market risk. I just need more time to complete my overall study on this.
Yes, I know they don't use the phrase "guarantee" but they are presenting it as a "guarantee". When you say the following, "Tucker99 by having your money in CDs and not in Stocks, you are losing out on more gains by not having more of your money in Stocks," then you are presenting Stock Investing as a guaranteed way of making more than CDs.
Make sense?
There's no guarantee in the investing world. By not taking up on the opportunity to invest (opportunity cost) you might lose out on returns that will outnumber the fixed-income returns. I can understand/feel the apprehension - almost reaching phobic levels (no disrespect intended) - because I was v much afraid of losing my hard earned money (it didn't help either that no one from my family has ever dabbled in stocks) but I finally decided to throw away my inhibitions and started to invest in any small amounts. It has helped that the timing coincided with the starting of the bull run but I'm now punch drunk on investing. Most of my money is in index ETFs but I also have about 5% of my portfolio in stocks (most of which are dividend players).
My portfolio now stands close to ~300k in about ~7yrs. I still think I'm a novice at this and every day I'm learning more on investing and the markets in general. I'm more comfortable with the idea that there's no 'guaranteed' return but as long as I do my due diligence along with knowing my limitations I'll come out ahead.
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Originally Posted by jotucker99
That's why I want to take my time. I like Dave Ramsey's statement of, "The only people that get hurt on roller coasters are those who jump off of them."
Dave Ramsey and MathJak both recommend a long term, diversified approach to Stock investing with funds in the largest companies in the US (and globally).
If I were to do this, that's how I would do it, diversification is one of the hedges against market risk. I just need more time to complete my overall study on this.
I'm not jumping in "tomorrow".
You don't have to jump 'tomorrow' but by not getting into the market (read indexed ETFs) with small positions the 'tomorrow' might never happen.
I don't know what tomorrow holds for me but whatever it's got in store..bring it on, baby
There's no guarantee in the investing world. By not taking up on the opportunity to invest (opportunity cost) you might lose out on returns that will outnumber the fixed-income returns. I can understand/feel the apprehension - almost reaching phobic levels (no disrespect intended) - because I was v much afraid of losing my hard earned money (it didn't help either that no one from my family has ever dabbled in stocks) but I finally decided to throw away my inhibitions and started to invest in any small amounts. It has helped that the timing coincided with the starting of the bull run but I'm now punch drunk on investing. Most of my money is in index ETFs but I also have about 5% of my portfolio in stocks (most of which are dividend players).
My portfolio now stands close to ~300k in about ~7yrs. I still think I'm a novice at this and every day I'm learning more on investing and the markets in general. I'm more comfortable with the idea that there's no 'guaranteed' return but as long as I do my due diligence along with knowing my limitations I'll come out ahead.!
Of course you experienced those high returns over the last couple of years because Stocks are in a Bubble right now. When the rate increases, you will see corrections, look for the losses most likely the rest of this year (if rate goes up in Sep) all the way through 2017 or 2018 as the market corrects itself back DOWN. Stocks are extremely overpriced and overvalued because the artificial demand for them has skyrocketed due to savers running into the market as their Banks aren't paying them anything.
When rates increase and CDs are back over 3% - 4%, Stocks are going down, down, down. I honestly would be looking to take my Stock Returns and GET OUT right now before that rate increase occurs, but you know with The MathJak Team you are supposed to hold until Jesus comes back so....
Of course you experienced those high returns over the last couple of years because Stocks are in a Bubble right now. When the rate increases, you will see corrections, look for the losses most likely the rest of this year (if rate goes up in Sep) all the way through 2017 or 2018 as the market corrects itself back DOWN. Stocks are extremely overpriced and overvalued because the artificial demand for them has skyrocketed due to savers running into the market as their Banks aren't paying them anything.
When rates increase and CDs are back over 3% - 4%, Stocks are going down, down, down. I honestly would be looking to take my Stock Returns and GET OUT right now before that rate increase occurs, but you know with The MathJak Team you are supposed to hold until Jesus comes back so....
You've admitted you don't understand the stock market, have relatively little knowledge but now Nostradamus has appeared and you know how things are going to work with rising rates, impact on equities and the timing of it all? A valuation expert now too I see
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