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OP, is there a set sum that you and your husband are investing in this friendly competition?
Just $1,000 into a single stock for fun. You can trade in and out, but the rule is only 1 at a time. I think I want to just buy and hold for a year and think with my patience he might hurt himself getting in and out too much from one company to another.
Quote:
Originally Posted by lenora
In my area, there is a huge difference between Walmart and Target. My Target has a Starbucks. Let that sink in for a moment. That said, I considered buying Target stock after I learned that Target planned on allowing EBT customers to use their SNAP benefits for groceries ordered online. In addition, the SNAP customers could have their groceries delivered to their home. My immediate thought was to buy its stock after taking into consideration that SNAP benefits should increase consistent with inflation. Then, of course, Target issued its quarterly report. I believe that Target can climb its way out of its hole, but I'm not quite ready to buy its stock, yet.
Yes. My circle of friends love Target, Walmart not so much.
Quote:
Originally Posted by moguldreamer
Because you are a novice, IMHO you should think about this a bit differently. Investing for a novice should not be about selecting individual stocks; a good mutual fund or exchange traded fund (basically the same things) allows you to buy a basket of stocks. This is usually called "diversification." The general idea of diversification is that you don't want to put all your eggs in one basket.
There is a ton of empirical research that basically says the price of any stock today ALREADY reflects all publicly available information, including for example the points you made in your original post. It is called the Efficient Markets Hypothesis, or EMH. Now, that might not literally be true of every stock at every point in time, but the evidence shows stocks in general, and large company stocks in particular, do indeed conform to the EMH. The implication is for regular people like those of us on this forum (myself included), conducting in depth analysis of a company's future prospects is largely a waste of time and effort, because we are not going to uncover any new nugget of information that other investors have somehow missed - today's price of TGT already incorporates every piece of available information.
So what should a novice do?
The general approach is usually summarized as follows:
1) understand your tolerance for risk. Understand how much of your hard earned money you are willing to lose. This is harder than one might think; in general, people might think they are willing to accept, say, a possibility of a 20% loss in exchange for the possibility of a 40% gain, but that's in abstract. Do a google search on "risk tolerance questionnaire" https://www.google.com/search?q=risk...+questionnaire and you'll find many online questionnaires to help you understand your risk tolerance.
2) understand what we mean by the phrase "asset class." An "asset class" (https://www.investopedia.com/terms/a/assetclasses.asp) is is a grouping of investment possibilities that exhibit similar characteristics and are subject to the same laws and regulations. Equities (stocks) are one asset class. Bonds are another asset class. Real estate is yet another. So is fine art, jewelry, commodities, etc. Asset classes are thus made up of things that often behave similarly to one another in the marketplace.
Here is a chart showing the past 10 years of performance of 9 popular asset classes:
Large Cap Equity (S&P 500) measures the perforomance of large capitalization US stocks
Small Cap Equity (Russell 200) measures the performance of small capitalization US stocks.
Developed ex-US Equity (MSCI World ex USA) measures the performance of large and mid capitalizaiton stocks in Europe, the Middle East, the Pacific region, and Canada
Emerging Market Equity (MSCI Emerging Markets) measures the performance of stocks in 25 emerging countries around the world
US Fixed Income (Bloomberg US Aggregate Bond Index) includes US Government, corporate, and mortgage backed bonds with maturities of at least one year
High Yield (Bloomberg High Yield Bond Index) includes non-investment grade taxable corporate bonds
Global ex-US Finxed Income (Bloomberg Global Aggregate ex-US Bond Index) includes bonds around the world
Real Estate (FTSE EPRA Nareit Developed REIT Index) measures performance of companies engaged in specific real estate activities in North America, Europe and Asia
Cash Equivalent (90-day T-Bill) is backed by the US Government and is considered risk-free
When you look at the chart, you'll see there really is no pattern. So, as an investor, each of us should focus on "what percentage of our money do we want invested in each of those 9 asset classes?" Think of it as a pie chart - how big do you want the slice allocated to big companies such as Target?
And, don't invest in Target but rather invest in market basket of stocks such as the S&P 500. There are several very good funds that include the largest companies in the US, including SPY, VOO, VONE, FZROX, and others. Buying just one stock such as Target is placing a bet on your ability to outthink the market; instead buying one of these broad funds isn't attempting to outthink the market but rather investing in the long term prospects of the US economy.
You make a lot of great points. My husband primarily invests in real estate and precious metals. He has 3 homes paid off and is looking at getting another.
This is more about a fun competition with just $1,000 each.
I've stopped shopping at Wal-Mart altogether. Never did go there much, but now it's my last resort. Sure, the prices are cheap, but so is a lot of the merchandise.
The last straw for me was a pair of shoes I bought at Wal-Mart. I just happened to see the price when I was in the store, and figured why not save some money (compared to the prices I'd been paying)? Within a month my feet were in excruciating pain. Eventually I narrowed down the cause to the shoes. On a per-mile basis those were the most expensive shoes I've ever purchased.
We only buy groceries from there and pay a yearly fee for delivery to our house. If at all possible, we avoid going into a Walmart. We supplement with Fresh Market and Publix. I agree - Target has its own niche.
Definitely they do but I find their clothes to be not only be nicer but many times just as affordable as Walmart. I get some nice colored V-neck t-shirts from Target that people have complimented me on. They are $6!
Just $1,000 into a single stock for fun. You can trade in and out, but the rule is only 1 at a time. I think I want to just buy and hold for a year and think with my patience he might hurt himself getting in and out too much from one company to another...This is more about a fun competition with just $1,000 each.
OK, I understand. From my perspective, TGT is a good company to own if your time horizon is 5 years, but I'm not so sure about merely 1 year. As you probably know, Target was hurt by supply chain problems and the bottleneck at the Ports of Los Angeles and Long Beach (and to a lesser extent the Port of Oakland). Much of the products they ordered from China and wanted in-store for the "work-from-home" shopper arrived just in time for those work-from-home-ers to be called back in to the office. That hurts. Shoppers want some work clothing and travel/vacation clothing just when Target has sweatpants and yoga pants. It isn't just Target; people want spend their money on vacation just when furniture stores are getting inventory.
All this will sort itself out over the coming years, and I expect TGT to do well - but I just don't know if a 1 year time horizon is long enough.
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