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Stock investment

Felis Leo said:
I think the late Jack Bogle had the right of it: You never want to be out of the market entirely. I have been dollar cost averaging for years and it has served me well, and I intend to do so rain or shine (and I know lump sum investing yields higher returns, but I prefer the routinization of regular monthly investment). But I do agree that now more than ever is the time to pay off as much debt as possible.
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Jack is interviewed in the Frontline episode I posted earlier. Smart man who did what was right for his customers.
 
Lord Tammerlain said:
Right now is not a good time to invest in the stock market. High valuations ( p/e) and what is expected to be a rising interest rate environment. Stock in that environment are likely to decrease, along with bonds. Use the money to pay down debt or hold on to it to invest later

Now for the counter argument

If you believe inflation is going to stick around and stay quite high, investing now will would be ok.

I would suggest that as a beginner mutual funds would be the way to go
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Attempting to time the market has not historically worked out so well for most people who try it, and cash is the one instrument guaranteed not to outpace inflation. Whether it is a bull market or a bear market, I prefer to maintain a diversified portfolio.
 
AConcernedCitizen said:
Attempting to time the market has not historically worked out so well for most people who try it, and cash is the one instrument guaranteed not to outpace inflation. Whether it is a bull market or a bear market, I prefer to maintain a diversified portfolio.
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Agreed. If you had put $10,000.00 into a Total U.S. Stock Market Index Fund just before the beginning of the 2008 stock market crash and Great Recession, it would be worth over $30,000.00 today. I do think Lord Tammerlain makes a good point about paying off debt; that in my opinion is always a good idea because it frees up more of your income to invest. But as the trite-yet-true adage goes, time in the market beats timing the market.

www.fool.com

If You Invested $10,000 Just Before the Last 3 Market Crashes, Here's How Much You'd Have Today | The Motley Fool

As a long-term investor, staying fully invested through a stock market crash is probably your best bet.
www.fool.com www.fool.com
 
It
Felis Leo said:
Agreed. If you had put $10,000.00 into a Total U.S. Stock Market Index Fund just before the beginning of the 2008 stock market crash and Great Recession, it would be worth over $30,000.00 today. I do think Lord Tammerlain makes a good point about paying off debt; that in my opinion is always a good idea because it frees up more of your income to invest.

www.fool.com

If You Invested $10,000 Just Before the Last 3 Market Crashes, Here's How Much You'd Have Today | The Motley Fool

As a long-term investor, staying fully invested through a stock market crash is probably your best bet.
www.fool.com www.fool.com
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It also generally increases an investor's 'comfort level'.
 
mrjurrs said:
It

It also generally increases an investor's 'comfort level'.
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Definitely. If you had a remaining home mortgage balance of $250,000.00 and got a windfall of $250,000.00, and you were to approach me about whether you should pay off your home mortgage or invest the money into the stock market, I would say pay off your mortgage 100% of the time. There are few things more freeing than being completely debt free and having your four walls and a roof paid for.
 
Felis Leo said:
Definitely. If you had a remaining home mortgage balance of $250,000.00 and got a windfall of $250,000.00, and you were to approach me about whether you should pay off your home mortgage or invest the money into the stock market, I would say pay off your mortgage 100% of the time.
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Careful. Accidentally perfect timing gives me currently a .8% home mortgage. Tied to the 6 month LIBOR (I bought the margin down), it is in position to move higher now, but I've been under 1% for over 5 years.

Even a blind pig finds a truffle now and again...
 
PirateMk1 said:
I don't think you do.
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You can talk about a gain on a particular transaction, or you can talk about annual gains. It appears to me you are talking about one trade, not an annual gain on your investments.
 
Felis Leo said:
Agreed. If you had put $10,000.00 into a Total U.S. Stock Market Index Fund just before the beginning of the 2008 stock market crash and Great Recession, it would be worth over $30,000.00 today. I do think Lord Tammerlain makes a good point about paying off debt; that in my opinion is always a good idea because it frees up more of your income to invest. But as the trite-yet-true adage goes, time in the market beats timing the market.

www.fool.com

If You Invested $10,000 Just Before the Last 3 Market Crashes, Here's How Much You'd Have Today | The Motley Fool

As a long-term investor, staying fully invested through a stock market crash is probably your best bet.
www.fool.com www.fool.com
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I think it depends on the debt. If you are talking about paying down a 2.5% mortgage, odds are that you will get better returns on VTI or VOO. Even so, I would put a little bit extra into the mortgage each month and put the rest into a mix of ETFs and bonds.

If you are talking about credit card debt at 18% on the other hand, then I would pay that all the way off before even considering stocks.
 
mrjurrs said:
Careful. Accidentally perfect timing gives me currently a .8% home mortgage. Tied to the 6 month LIBOR (I bought the margin down), it is in position to move higher now, but I've been under 1% for over 5 years.

Even a blind pig finds a truffle now and again...
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That is one of the best interest rates I have seen, but my personal counsel would remain steady. I would still say no mortgage payment and totally freed home equity beats even an enviably-miniscule mortgage payment. Especially when you never know what the future holds. Speaking as a bankruptcy lawyer, I have found that there are a thousand contingencies that can make even a small mortgage payment at least temporarily unpayable. Having a completely paid off home in the state with some of the lowest property taxes in the Union can be the very best investment one can make.
 
Felis Leo said:
I think the late Jack Bogle had the right of it: You never want to be out of the market entirely. I have been dollar cost averaging for years and it has served me well, and I intend to do so rain or shine (and I know lump sum investing yields higher returns, but I prefer the routinization of regular monthly investment). But I do agree that now more than ever is the time to pay off as much debt as possible.
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For beginners dollar cost averaging is the way to go as one learns about other methods of investing and trading. It insures the buy were the money is made, is at a general discount to the market over time.
mrjurrs said:
You can talk about a gain on a particular transaction, or you can talk about annual gains. It appears to me you are talking about one trade, not an annual gain on your investments.
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Annual account profit from trading after expenses and losses not compounded annually.
 
AConcernedCitizen said:
Attempting to time the market has not historically worked out so well for most people who try it, and cash is the one instrument guaranteed not to outpace inflation. Whether it is a bull market or a bear market, I prefer to maintain a diversified portfolio.
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Quite true generally,

There are times however that some people should avoid. Times of great instability, and times of irrational exuberance. For some they can make a lot of money others will pile in at the top and lose lots on the way down.

Right now has instability and irrational exuberance. The market is propped up by the government and the fed, not by underlying fundamentals
 
PirateMk1 said:
For beginners dollar cost averaging is the way to go as one learns about other methods of investing and trading. It insures the buy were the money is made, is at a general discount to the market over time.

Annual account profit from trading after expenses and losses not compounded annually.
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Unless you are 'zeroing out' your trading account, trading returns are by their very nature cumulative. Aren't you reinvesting your gains?
 
Felis Leo said:
Definitely. If you had a remaining home mortgage balance of $250,000.00 and got a windfall of $250,000.00, and you were to approach me about whether you should pay off your home mortgage or invest the money into the stock market, I would say pay off your mortgage 100% of the time. There are few things more freeing than being completely debt free and having your four walls and a roof paid for.
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Not always the best choice in the US with mortgage interest costs being tax deductible ( or at least used to be, might have changed in the last few years)
 
One of the primary pillars of investing is diversification. Buying a single stock and hoping it appreciates is not a recipe for success. I’d start with mutual funds maybe one that tracks the S&P 500 and another that invests in quality overseas companies.

Only after that would I start looking at individual companies. Books have been written on picking stocks so no one here can do it justice. If I might, I’d recommend starting with anything a Peter Lynch has written. He is probably the single most successful money manager in modern times. Been a while since I read him but his basic strategy of buying quality and buying things you know and understand made him and clients very wealthy.
 
mrjurrs said:
Unless you are 'zeroing out' your trading account, trading returns are by their very nature cumulative. Aren't you reinvesting your gains?
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That's exactly what I do every year Jan 1 I start with a 150,000 and make trades till the end of the year and empty the account of everything gained over the initial 150,000. During the year the trades are rolled up as trends progress, though I do maintain my initial trading position size regardless of account growth. My initial maximum position size is $3000 with a max of 5 outstanding positions or no more than 10% maximum exposure at any one time. Most of the profit is either dumped into other business or projects. Part is used for living expense. I dont put more than a third into other retirement accounts. I have multiple sources if income so I am fairly set as far as money goes. Buying and selling equipment nets me the same or better profitability. It just takes much more time. The problem with larger accounts and trade sizes is the profitability drops off rapidly as the position size increases due to inherent market mechanics. 150,000 dollars in the account to start seems to be the sweet spot at least for me.
 
mrjurrs said:
Penny stocks are a casino. Why are you looking at those three stocks. Before you start, determine your investment objective...short term vs long term. Risk averse or risk seeker. Before I started with individual stocks I would invest in an index fund and watch what it does over the next quarter and try to learn something from that.
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If your time horizon is 90 days, you're speculating, not investing.
 
Allan said:
If you're 50 you have lots of time. VTI has returned 16% annually over the past ten years. That's hard to beat.
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The past 10 years have been a bull market. almost everything does well.
 
reflechissez said:
If your time horizon is 90 days, you're speculating, not investing.
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Much short term investing is speculation. I wasn't suggesting a 90 day investment, I was suggesting watching it for 90 days to get a sense of what is happening in the market.
 
reflechissez said:
I advise people for a living and don't usually weigh in. There's so much misinformation that it's not worth it.
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It just seemed like you were trying to be helpful but in an unhelpful way that isn't actionable by the OP.
 
reflechissez said:
If your time horizon is 90 days, you're speculating, not investing.
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Don't take this wrong, I just wish to clarify your idea which is sound. I am just providing the terminology. Speculation can be done under any time frame. It is necessary component of the markets as speculators absorb the price risk that hedgers wish to mitigate. Investment is the term used for longer term positions in the market generally thought to be a longer than a year. Trading is the term used for short term positions under a year. So a 90 day horizon would be trading, 5 year horizon investment. Sorry if I stepped on your toes it's just my anal retentiveness shining through.
 
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