Financial News

[southsider2k5]

I am excited for people to see what I'm looking at to know if there are alternative terms that I don't understand.

 

Post them here, or message me if you like.

[NorthSideSox72]

For all the talk about the Fed we've seen here over the years, and all the hot air from various politicians... I think a lot of people are very unclear what the Fed actually does. It's understandable too. It only bothers me when people act tlike they know, when they don't.

 

So here's an article that lays it out pretty nicely.

 

[caulfield12]

Honestly, the best thing you can do it manage it yourself. Look to see if you company has an SP 500 fund/ETF. For your main investment you should put 100(- your age) % into the fund. The balance of your age should be put into a conservative-ish bond fund (something based in American blue chips).

 

If you are 30 years old...

 

70% into an SP fund.

30% into a bond fund.

 

All of those managed funds are so much more expensive to be in (fees) than the simple SP funds, and historically they underperform the SP on a long term basis. Yes, they might win years as being better, but once you factor in fees and such, you are better off in the SP. Remember every extra fee you pay for aggressive management, is that much higher of a return you need to earn to get similar results.

 

Just my two cents.

 

And also steer clear of load funds that you have to pay upfront fees of 3-5%. That's crazy, IMO.

 

As far as the bond percentages, that's the typical advice from 10-15 years ago, and it's always better to be diversified (small and mid-cap, international/emerging markets, value vs. growth)...there's a possibility we're entering a new environment with all the challenges to the EURO and the fact that some of the safest bonds actually cost you money to own them, essentially....at least when you take into account inflation and taxes.

 

If anyone really is interested in learning more about bonds, they should do their research about Bill Gross and what happened with Pimco's Total Return (Bond) Fund, which was once the biggest in history.

 

When my father got me interested in investing, he put me in a fund called Nicholas out of Milwaukee that's very conservative. Of course, as the 90's went on and tech stocks started exploding, I got frustrated with value investing and sought out American Century (some of the quant/algorithm-based funds) and Bill Miller's Legg Mason Value Index, which was famous for beating the S&P 13 years in a row.

 

So I sold low, bought high...two cardinal sins in investing. I wasn't patient. Even the best, most renowned investors will fall victim to the market, as you'll see if you read the stories of Miller and Gross.

 

In the end, it's BEST for almost any investor to find an index fund (Vanguard/Jack Bogle is the trendsetter) and plow your money consistently into that. Basically, you go up and down with the market, but it's better than trying to beat the market yourself, which is essentially the same as any poster at SoxTalk trying to be the GM.

 

Currently, I try to look for high/er yield stocks...and of course it all depends on your investing time horizon. The only investments I've made in the past 5 years (besides plowing money into Vanguard and Oakmark, another solid "value-oriented" set of funds) have been 500 shares of Vodaphone (for the high yield) and then recently 300 shares of Ten Cent (tcehy), which is the main competitor in China with Alibaba, and the originator of the WeChat application, the most popular in the world (the US bought/developed What'sApp at approximately the same time).

 

 

And always be happy to take a profit...I had 100 shares of JDS Uniphase at 114.....they went to $140 the day they were added to the S&P and I wasn't happy making $2,600 so I got greedy and rode that stock all the way down into the teens, where it was basically a tax write off. A hard but important lesson, any profit is a good one.

Edited February 11, 2015 by caulfield12

[Jenksismyhero]

I'm probably over diversified. I have an IRA that is an American Century retirement target date fund. My investment account is all Vanguard - total stock index fund, total international stock index fund and a total bond index fund (in a 40/40/20 split). And my employer has a 401(k)/profit sharing plan that I've split into three funds - a T. Rowe Price tech fund, T. Rowe Price healthcare fund and Vanguard real estate index fund (split 33/33/33). I had the option of just doing the Vanguard 500, but figured Tech and Healthcare funds will always be pretty solid and real estate has nowhere to go but up.

 

 

[caulfield12]

I'm probably over diversified. I have an IRA that is an American Century retirement target date fund. My investment account is all Vanguard - total stock index fund, total international stock index fund and a total bond index fund (in a 40/40/20 split). And my employer has a 401(k)/profit sharing plan that I've split into three funds - a T. Rowe Price tech fund, T. Rowe Price healthcare fund and Vanguard real estate index fund (split 33/33/33). I had the option of just doing the Vanguard 500, but figured Tech and Healthcare funds will always be pretty solid and real estate has nowhere to go but up.

 

 

Healthcare seems as good a future bet as any.

 

I'm sure you have some duplication across funds, but at least you have the different sectors and exposure to international...with intl nearly always having the most volatility on a year to year basis.

Edited February 11, 2015 by caulfield12

[Reddy]

question guys. I'm pretty new to investing, and I was wondering if y'all could answer a question for me.

 

If a stock goes up a certain amount, but my position in that stock doesn't go up the same amount as the overall stock, is that because of the different price points at which I bought in on the stock? I assume that's somehow related, but I'd love to actually understand it. Thanks

[southsider2k5]

question guys. I'm pretty new to investing, and I was wondering if y'all could answer a question for me.

 

If a stock goes up a certain amount, but my position in that stock doesn't go up the same amount as the overall stock, is that because of the different price points at which I bought in on the stock? I assume that's somehow related, but I'd love to actually understand it. Thanks

 

Trying to understand your question here, so excuse me if I have something wrong. If you are actually buying a stock, and not an ETF, your gain/loss should exactly mirror what the stock price does. If you buy 100 shares of IBM, and it goes up $2, you make $200, on paper. Your position only changes if you are buying or selling more of the stock.

 

ETFs are a bit different because they are setup to mirror something else, and are not exact copies of what they follow.

 

If you want to give me more details for a better explanation, feel free to PM me.

[Reddy]

Trying to understand your question here, so excuse me if I have something wrong. If you are actually buying a stock, and not an ETF, your gain/loss should exactly mirror what the stock price does. If you buy 100 shares of IBM, and it goes up $2, you make $200, on paper. Your position only changes if you are buying or selling more of the stock.

 

ETFs are a bit different because they are setup to mirror something else, and are not exact copies of what they follow.

 

If you want to give me more details for a better explanation, feel free to PM me.

 

Yeah it's difficult to explain without specifics, so it's easier this way. I don't really care if y'all know which stock I'm talking about :

 

DAL went up 1.34% but when I look at my position on my schwab acct it's only up 1.14% on the day. I've bought in on three separate occasions at different price points and for different share amounts.

 

Color me confused.

[southsider2k5]

Yeah it's difficult to explain without specifics, so it's easier this way. I don't really care if y'all know which stock I'm talking about :

 

DAL went up 1.34% but when I look at my position on my schwab acct it's only up 1.14% on the day. I've bought in on three separate occasions at different price points and for different share amounts.

 

Color me confused.

 

It could be a couple of different things. I think the most likely is that most quotes are 20 minute delayed, while your position profit and loss are not. If it isn't that, it could be the way that they are pricing the position in regards to all of your purchases. For example:

 

Buy 100 shares of XYZ for $100.

 

Next day buy 100 shares at $101.

 

The day after that, the position is trading at $102. If they combined your position in your account summary, you would show 200 shares at $102. Your gain on the first 100 shares is 2% ($100->102) while the second 100 shares is about 1% ($101->102) and if they average it out, it would show up on your statement as a 1.5% profit, or the average profit on the entire position.

[Reddy]

It could be a couple of different things. I think the most likely is that most quotes are 20 minute delayed, while your position profit and loss are not. If it isn't that, it could be the way that they are pricing the position in regards to all of your purchases. For example:

 

Buy 100 shares of XYZ for $100.

 

Next day buy 100 shares at $101.

 

The day after that, the position is trading at $102. If they combined your position in your account summary, you would show 200 shares at $102. Your gain on the first 100 shares is 2% ($100->102) while the second 100 shares is about 1% ($101->102) and if they average it out, it would show up on your statement as a 1.5% profit, or the average profit on the entire position.

 

Awesome. I'm sure it's the latter. That makes complete sense.

 

Thanks man, appreciate it!

[southsider2k5]

Awesome. I'm sure it's the latter. That makes complete sense.

 

Thanks man, appreciate it!

 

Any time.

[Chisoxfn]

Awesome. I'm sure it's the latter. That makes complete sense.

 

Thanks man, appreciate it!

It could also be that one is showing impacts of after hours trading while the other isn't.

[bigruss]

Or taking into account the cost of the trade.

[southsider2k5]

Or taking into account the cost of the trade.

 

That isn't it for sure. That would be reflected in your account balance.

[Reddy]

That isn't it for sure. That would be reflected in your account balance.

Yeah, especially since all my other positions don't have this difference.

 

DAL is the only position I've bought into at multiple price points, so it makes sense that the reason for the difference is what SS2k5 said above.

[Y2HH]

Yeah, especially since all my other positions don't have this difference.

 

DAL is the only position I've bought into at multiple price points, so it makes sense that the reason for the difference is what SS2k5 said above.

 

There should be some sort of summary price that takes into account the different price points and the share amounts you bought them at and let you know what your current "overall" price is. This is the value you'd compare to the current stock price to find out how much you are ahead/behind.

 

But yes, what SS said is correct, it's the multiple price points that are making the difference here.

 

EDIT: And BTW, good to see you're investing in the market.

Edited February 19, 2015 by Y2HH

[bmags]

http://www.blackrock.com/investing/product...nstl-class-fund

 

This was just added in our account for 401k. I'm thinking about moving this over.

[southsider2k5]

http://www.blackrock.com/investing/product...nstl-class-fund

 

This was just added in our account for 401k. I'm thinking about moving this over.

 

Do it. Do it now.

 

This fund should be the cornerstone of your 401k retirement account. It has a 2% turnover, and a 0.12% expense ratio. The others we talked about were WAY higher.

[bmags]

Do it. Do it now.

 

This fund should be the cornerstone of your 401k retirement account. It has a 2% turnover, and a 0.12% expense ratio. The others we talked about were WAY higher.

 

Thanks again for all your help SS.

[southsider2k5]

Thanks again for all your help SS.

 

Just for comparison's sake, this is the one my lion's share is in. Your's is a very good fund to be in.

 

 

http://www.bloomberg.com/quote/DSPIX:US

 

 

[Y2HH]

Just for comparison's sake, this is the one my lion's share is in. Your's is a very good fund to be in.

 

 

http://www.bloomberg.com/quote/DSPIX:US

 

88% of my 401k's overall value is in the S&P500 Index.

 

Though that WAS over 95%, over the years I slowly started upping my contributions to foreign index and bond index while lowering my contribution to the S&P500 index (just to slowly bring a bit of balance), without doing a forced rebalancing.

[caulfield12]

88% of my 401k's overall value is in the S&P500 Index.

 

Though that WAS over 95%, over the years I slowly started upping my contributions to foreign index and bond index while lowering my contribution to the S&P500 index (just to slowly bring a bit of balance), without doing a forced rebalancing.

 

 

That obviously makes sense when much of the projected world growth is in Asia, the Middle East and pockets of South America and Africa.

 

Trusting foreign companies to report accurate results/earnings, though, not an exact science. (Of course, we went through a slew of companies like Enron and Worldcom gaming numbers over a decade ago, too.)

[Y2HH]

That obviously makes sense when much of the projected world growth is in Asia, the Middle East and pockets of South America and Africa.

 

Trusting foreign companies to report accurate results/earnings, though, not an exact science. (Of course, we went through a slew of companies like Enron and Worldcom gaming numbers over a decade ago, too.)

 

The absolute hardest part of investing is buying things nobody else wants with the belief that company or industry will rebound. Take for instance, at this moment, the metals sector...very depressed, and falling like a rock. IMO, right now, VALE is a strong buy, BECAUSE the industry they're in is falling apart and the stock is sinking like a rock. It isn't sexy, it isn't appealing...but I believe that one day, the iron ore industry (steel) will rise again...and VALE will lead the way when it happens...they're also foreign.

 

But that's the market. Buying bargins when nobody else is interested.

[bmags]

Kind of an odd jobs report, the low wages uptick/high jobs report seems good to remove some of the slack...but participation went down. I'm going to say wait for the revisions.

[Cknolls]

Kind of an odd jobs report, the low wages uptick/high jobs report seems good to remove some of the slack...but participation went down. I'm going to say wait for the revisions.

 

What i find strange is no mention of job losses in the energy sector....Those jobs have been getting hammered the last two months and that is not represented in the data..