Investing Strategies. What is your move?

[PimTac]

Since the original investor thread got ed , let’s try the second edition.

2022. Inflation. Rising taxes. The shifting into a new economy. How are you adapting your investments and portfolios?

 

[JeffKeryk]

Virtually nothing. I have 3 major categories of investment strategies:
1 - Schwab Private Client - conservative growth
2 - Stock options and purchases - basically insane as compared to conventional wisdom. Waaaaay outta whack.
3 - CA Municipal Bond fund - ultra conservative and double tax free. If I lost the other 2, I would get a nice little monthly income with very low risk.

The economy is very good, unemployment is near early 1950's low. As supply chain and other global issues improve, inflation growth will slow.
But right now, there are 3 big issues: Inflation, inflation and inflation.
My solution (which has not changed): Contingency, contingency and contingency.

Schwab 2022 Outlook

 

[Cujet]

I've now chosen to split my investments. 75% in safety, 25% in funds with varied aggressiveness. Inflation is clearly outpacing my gains. Now with the current fluctuations, I'm even farther back. While the "index" is trending back up, my stocks are still heading the other way. In my life, it could not be any other way.

Despite an entire career of full payments into an IRA, I have something like $35K in my IRA. Every "correction" did a great job wiping me out. Every bull market left me flat. Disgusting and infuriating. I've tried 4 firms, all with instructions to choose wisely and diversify, all 4 provide the same results. Fast losses, slow gains. I recently became quite annoyed and visited my advisors at UBS in Jacksonville. Incredibly fancy office on a top floor, I also noticed the expensive clothes and a stunning number of expensive cars in the parking lot under the building. I know exactly who paid for all that.

I don't have any other way to say it, gambling carries risk.

I will also say this: Where did a Venezuelan invest to protect their assets and outpace inflation? Answer, nowhere in Venezuela.

 

[PimTac]

I've now chosen to split my investments. 75% in safety, 25% in funds with varied aggressiveness. Inflation is clearly outpacing my gains. Now with the current fluctuations, I'm even farther back. While the "index" is trending back up, my stocks are still heading the other way. In my life, it could not be any other way.

Despite an entire career of full payments into an IRA, I have something like $35K in my IRA. Every "correction" did a great job wiping me out. Every bull market left me flat. Disgusting and infuriating. I've tried 4 firms, all with instructions to choose wisely and diversify, all 4 provide the same results. Fast losses, slow gains. I recently became quite annoyed and visited my advisors at UBS in Jacksonville. Incredibly fancy office on a top floor, I also noticed the expensive clothes and a stunning number of expensive cars in the parking lot under the building. I know exactly who paid for all that.

I don't have any other way to say it, gambling carries risk.

I will also say this: Where did a Venezuelan invest to protect their assets and outpace inflation? Answer, nowhere in Venezuela.

At least we have the options to invest in other countries as well.

During my discussion last week with my advisor we talked about the new economy and how markets and investments adapt. There is a period of volatility during that transition. I have stuck with the basic 64/36 Sharpe allocation. The issue now is fixed income. Bonds are adapting as well but that takes time. As long as I stay ahead of inflation I am happy.

But with all that said, nobody knows the future.

 

[99Saturn]

No adjustment here - dollar cost averaging - VOO and VTI.

 

[jstert]

Despite an entire career of full payments into an IRA, I have something like $35K in my IRA. Every "correction" did a great job wiping me out. Every bull market left me flat. Disgusting and infuriating. I've tried 4 firms, all with instructions to choose wisely and diversify, all 4 provide the same results. Fast losses, slow gains.

seems that these 4 active investment managers were trading alot, trying to catch a wave or avoid a trough, unsuccessfully for you, profitably for themselves. i never trusted any intermediary to manage my money except me and i never attempted to time the market. starting in 1982 i consistently and fully funded any/all retirement accounts with one or two conservative, low cost, balanced, stock/bond mutual funds. markets went up and down but i am way ahead of my starting point. i prefer “fire & forget” investing in instruments that are relatively inaccessible to anyone’s greed or nervousness.

 

[Vern_in_IL]

Since the original investor thread got ed , let’s try the second edition.

2022. Inflation. Rising taxes. The shifting into a new economy. How are you adapting your investments and portfolios?

I heard the recommendations is to SPEND NOW to prevent inflation from munching up your portfolio.
If you expect car/house prices to increase spend now, some say buy more crypto. You think we will see 5 buck a gallon gas by summer? Then bulk on site gas storage might be something to invest in, now, if you got the liquidity.

The recent market downturn was not enough, should have lost another 5k points for a good correction. Still too much "funny money" in the system. I expect housing/ maybe vehicles prices to crash and high inflation soon. Housing needs to crash, so does vehicle prices, but the lots are bare due to chip shortage, "the market" cannot afford 100k+ housing and 50k trucks, may be a wave of defaults.

Inflation will continue to go up, and increased intrest rates from the feds that will not trickle down to savings accounts(inflation will be ahead of the fed rate anyways)

Propane/natural gas prices generally are low in May, June, July, but this year I do not see a drop happening unless major sources come online, salt dome gas reservoirs are low all over, esp Midwest. Excess gas line capacity was converted over to petro products.

Wages never keep up with inflation,, 100 BILLION profit from Pfhizer is not going to help the economy, unless they actually paid out for medical malpractice to victims, just my thoughts.

 

[Nick1994]

Dogecoin!

 

[Wolf359]

Despite an entire career of full payments into an IRA, I have something like $35K in my IRA. Every "correction" did a great job wiping me out. Every bull market left me flat. Disgusting and infuriating. I've tried 4 firms, all with instructions to choose wisely and diversify, all 4 provide the same results. Fast losses, slow gains. I recently became quite annoyed and visited my advisors at UBS in Jacksonville. Incredibly fancy office on a top floor, I also noticed the expensive clothes and a stunning number of expensive cars in the parking lot under the building. I know exactly who paid for all that.

Sorry to say this, but you chose poorly. I did 2k into an IRA for 7 years which racked up gains where it was worth 45k. Then the dot com bubble wiped out a lot of it, but it was still worth over 20k. Bought shares in a mutual fund and never sold them. Dollar cost averaged to buy them. I avoid the firms now and just do buy and hold. I had Fidelity try and manage some of my funds as they talked about how they were the experts and I was just a guy who was holding onto various funds. So I let them do half, I had about the same amount in my Roth IRA as my IRA and after 2 years, they underperformed and the only thing the guy would say to me was that I didn't give them enough time. Mind you in that time period they had gone through some up times and down times and I noticed that I tended to outperform them when it was up and also when it was down. They claimed they'd do better in a down market and they actually did worse. I also noticed most of the funds they had me in didn't have long track records. That's also another clue, bad funds don't stick around long. I've since consolidated down to 3 core mutual funds. My method to outperform them was to hold the same funds throughout the entire time period they managed my funds where they were buying and selling various funds to adjust the allocation.

 

[Dave Hess]

Vern,

Great post and unfortunately you are 100% correct.
I‘m now 90% cash because the House of Cards will come crashing down. Have some cash on sidelines for lots buying opportunities.


Jeff,

Real inflation is around 15-20% but folks on TV say to completely ignore it.



PimTac,

We are in a new economy and a new look on what to invest in definately changed in recent times (5-7 years).



Wolf,

I agree to manage and invest your hard earned money, not a salesman working on commission.

.

 

[doitmyself]

Cujet's story is the perfect example for us laypeople with very limited financial knowledge to be extremely cautious about internet chatter. For all of the investment success stories, there are many Cujet experiences also. The success stories seem to show up more and have more weight vs. the calamities.

At my workplace, I bump into people that boast how much better their plan x choice performed vs. my plan y choice, causing me to second guess. Then, I hear the occasional Cujet story that brings me back to reality. For the past 40 years I followed the basic rules-of-thumb 403B/Roth principles that you guys have preached for years: invest for the long term, more risky while young/more conservative towards retirement, don't panic - ride the wave up/down, diversify, etc.. Be wary about what greed might cause.

I believe that I could be over 1/4 million $ richer had I more actively managed my funds. But then, you hear a Cujet story...........

Be careful people about following the opinions here. There's literally only about a dozen people participating here actively. Absolutely no offense to you guys. I learn a lot from you. But you are a minority that seem to understand what you are doing in a very complex matter.

 

[alarmguy]

A sad story it is.
All one has to do is invest in index funds. S&P, Dow, Nasdaq if they are in the market long term.

No advice needed, the market averages always beat the vast, vast, vast almost all other funds, beat most all investment advisors and beat most all market guru's.
Really simple stuff for the average person whom most likely would come out on top of all others.

You could also if you feel daring, chose well known, established companies with LONG track records.
Really simple stuff. Used to be a saying "keep it simple stupid"
There will always be someone whom wants to give advice OR someone whom wants to control your money.
Index funds do not need advice.

 

[PimTac]

I will be watching the housing market in the coming months and years to see how rising interest rates will affect it.

 

[alarmguy]

Ps. Im still fully invested. HUGE stable companies
WMT, WFC, TMUS
Long hard run with WFC and might be smart to move out of it now but I guess if interest rates are going to keep climbing Ill be in good shape and I hope they climb to the moon and back )

Another portfolio I leave to the funds and dont pay much attention. Nasdaq, S&P, and some world wide ESG find (I think Blackstone, dont even know off the top of my head) Even though I dont believe in ESG investing I dont fight the market... I guess, what do I know, Im pretty comfortable with everything. Learned a while ago, actually from my wife who manages her own portfolio to not fight the market.

For the record, I really agree with DaveHess. I truly feel we are in for a big hit, we truly are in a house of cards. Call me stupid but this time I am not going to fight the market and just go with the flow of Americans being comfortable with government and households on massive spending spree's. I know the day of reckoning is coming I just dont know when, every time I think everything is so crazy the borrowing just continues.
I think with these companies Ill be ok still. Hope I dont regret it. But then there is my wife, whom with her portfolio never paid attention to this stuff and always comes out ok with her funds. As long as you have the time to wait.

 

[Astro14]

For everyone’s awareness, the “Investors - Come in Please” thread was locked at the request of its most active participants.

They’ve started up a new thread, with the same objective, daily market discussion, here: https://bobistheoilguy.com/forums/threads/investors-blog.351194/#post-6024885

However, this thread appears to have a different focus: long term strategy.

For that topic, I’ve recommended this book many times:

”Common Sense on Mutual Funds” by John Bogle.

First read it 25 years ago. Simple thesis - that a low cost index fund beats over 90% of the actively managed funds and is the individual investor’s best long term bet.

Saint Jack (as he’s known by Vanguard aficionados) was right. Stay the course. Dollar cost average into the broad market with low cost index funds.

My IRA experience, which started 30 years ago, is very different than CUjet, and I see that kind of story often. It is not a criticism of him, because it is common, but it is illustrative.

 

[mightymousetech]

Canadian Couch Potato here. Just keep doing what I’m doing. Don’t try and beat the market, just be the market.

 

[Wolf359]

Cujet's story is the perfect example for us laypeople with very limited financial knowledge to be extremely cautious about internet chatter. For all of the investment success stories, there are many Cujet experiences also. The success stories seem to show up more and have more weight vs. the calamities.

At my workplace, I bump into people that boast how much better their plan x choice performed vs. my plan y choice, causing me to second guess. Then, I hear the occasional Cujet story that brings me back to reality. For the past 40 years I followed the basic rules-of-thumb 403B/Roth principles that you guys have preached for years: invest for the long term, more risky while young/more conservative towards retirement, don't panic - ride the wave up/down, diversify, etc.. Be wary about what greed might cause.

I believe that I could be over 1/4 million $ richer had I more actively managed my funds. But then, you hear a Cujet story...........

Be careful people about following the opinions here. There's literally only about a dozen people participating here actively. Absolutely no offense to you guys. I learn a lot from you. But you are a minority that seem to understand what you are doing in a very complex matter.

Oh yeah, there are also people like that out there that don't know how to invest. There was a secretary that was just putting her 401k money into a money market fund because she didn't know what other funds to pick. I told her to stick it in an S&P 500 index fund that was available and that I was also invested in. She went ahead and did that and I remember about a year later she was up several thousand dollars as I think it had a good year. She said thank you.

 

[JeffKeryk]

In 1982 the S&P 500 was around $110; today, 40 years later, it is over $4,500.
When I see people gloat about short term gains, I just say, "Good for you."
A lot of the products Schwab has sold me miss these short term gains. But they have avoided the losses as well.

 

[38Chevy454]

Long term money (10+ years out) should be 100% equities, preferably low fee widely diversified funds. Such as S&P500, Total Market US, Total Market Ex-US, NASDAQ, Russell 2000 or 3000. Medium term money 3-10 years should still be 70% range equities and 30% fixed income side, again utilizing widely held funds and low admin fees. Short term money 0-3 years should be more conservative and more like 20% equities and 80% fixed income. TIPS, US Govt Treasury bills, US corp bonds, CDs or similar for the fixed income side.

The main thing is you can do this all as a self directed and no need for any financial advisor and the FA's fees which can be 1-2% *each year*. Also that 1-2% is on your total balance, called AUM (Assets Under Mgmt) fee. That fee means your FA needs to beat the indexes (of the widely held funds discussed above) by their 1-2% fee just to break even. Why not put that 1-2% in your pocket?

The biggest thing is just keep investing in your 401k/403b, at least to get the maximum of the company match if you have that. Don;t panic and sell, just keep being invested for the long term. Long term avg for stock market is approx 9-10% per year. Time in the market beats timing the market.

Two fundamental rules for retirement savings and general personal finance:
1. Pay yourself first. This is the 401k/403b or IRA contributions each paycheck, Just keep doing it and let compounding over time take your savings up for retirement.
2. Live below your means. Be smart and don't spend more than you make. Be smart with credit and what the real cost of credit interest costs you. Even save on top of the pay yourself first if you can. That savings will enable you to pay cash for that new TV, appliance replacement, house improvement project, new vehicle, or whatever you may have otherwise bought on credit. Most credit cards are 18-24% interest, that's a steep price to pay.

 

[PandaBear]

401K: as usual, dollar cost averaging between 25% USD, 50% US index fund (S&P 500), 25% international large cap

Free play money: stay the course of my stock pick in the last several years, basically holding Microsoft, AMD, Amazon, but not buying more.

Personal investment: studying a couple new skills so I can find a higher paying job. My domain is shrinking so the potential for more income is limited.

Children: start a stock accounts for them and give each a share of McDonalds, to get them interested, then gradually get more interesting companies' stock for them so they can get interested in how investment work early on, so they will invest early in life.