Gonna start investing in stock. Any tips for a newbie?

[l_e_g_e_n_d]

But they might or might not pay dividends Legend, you aren't guaranteed those dividends all of the time.

Historically, they have always paid dividends. The risk is these high-dividend, -market cap stocks cut dividends below your minimum dividend threshold. If this were to occur, you adjust your portfolio by liquidating the "cutter" and increase current or other positions.

If my bonds/fixed income averages 5% a year over a 10 year period

Please cite these "conservative" bonds/instruments you worship. This should be fun.

 

[Tictac]

BTW, there are periods where the above example happened. Usually with stocks, you need to hold them at least 15 - 20 years to complete a full-fledged boom/bust/boom/bust cycl

When?

And if your bonds are at 5% they are not US Treasury bonds. So you are taking credit risk (spread, event and default) the entire time you own them.

 

[Bible_Belt]

He probably means a bond fund. A lot of people own shares of mutual funds that invest exclusively in bonds. There is a common misunderstanding that a bond fund can't lose money; that's not true at all. If the fund manager makes poor decisions, the price of the shares will go down, even if none of the bond issuers default. Bonds go up and down in value, just like stocks. If rates go up, nobody wants the old bonds, so they have to trade at a discount to face value. If rates go down, old bonds will trade at a premium, going up in value.

 

[Tenacity]

Historically, they have always paid dividends. The risk is these high-dividend, -market cap stocks cut dividends below your minimum dividend threshold. If this were to occur, you adjust your portfolio by liquidating the "cutter" and increase current or other positions.

Please cite these "conservative" bonds/instruments you worship. This should be fun.

I've already listed the type of fixed income investments I like, they include Individual Bonds, Long Term CDs and P2P Loans. If you want to play the individual stock picking game then that's on you, if I were in stocks I would not try to beat the market. Very rarely do mutual fund managers (who have access to more information than you would as an external investor) beat the market so how does someone externally consistently do it? But if you can, all power to you.

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When?

And if your bonds are at 5% they are not US Treasury bonds. So you are taking credit risk (spread, event and default) the entire time you own them.

I didn't say I didn't like taking risks, my issue with stocks is that I can't make any forecasts on what the index funds are going to do for the next 10, 20 and 30 years. That's my issue with stocks.

Let me give you some 10 year examples off the top of my head of when Stocks didn't beat Long Term CDs:

* Jan 1999 - Dec 2009: S&P had a CAGR of .84% per year over the 10 year period. Long Term CDs (5 year CDs and above) averaged 5.6% per year over the 10 year period.

* Jan 1965 - Dec 1975: S&P had a CAGR of 4% over the 10 year period. Long Term CDs (5 year CDs and above) got well over 6% per year over the 10 year period.

I do realize these are examples that we might NEVER see again for Long Term CDs as the Central Bankers have kept rates at 0% or NEGATIVE (Japan) so that they could PUMP up the stock market with artifical demand to pay off Wallstreet and screw over the savers. But you asked for some examples so there's two off the top of my head.

He probably means a bond fund. A lot of people own shares of mutual funds that invest exclusively in bonds. There is a common misunderstanding that a bond fund can't lose money; that's not true at all. If the fund manager makes poor decisions, the price of the shares will go down, even if none of the bond issuers default. Bonds go up and down in value, just like stocks. If rates go up, nobody wants the old bonds, so they have to trade at a discount to face value. If rates go down, old bonds will trade at a premium, going up in value.

No, I'm not talking about Bond Funds. A Bond Fund is pretty much just like a Stock Fund, due to the active trading aspect that's going on within the Fund.

A Bond Fund (in my opinion) is not a true fixed income investment. To me a true fixed income investment is something you buy, hold until maturity, and collect interest payments along the way. This would be an Individual Bond purchase, a Long Term CD, a P2P Loan Portfolio, an Annuity, etc.

I like true fixed income investments. I understand if you guys love the stock market, I just can't predict my returns with stocks so I just stay away from them...but that's just ME though. I really don't "recommend" my strategy to others. If people ask me the best approach to passive investing, I always tell them to utilize a diversified balanced pool of stocks, bonds, and cash.

Yes, there are some stocks that pay dividends but the payment of said dividends isn't something you can always count on.

 

[Tictac]

Jan 1999 - Dec 2009: S&P had a CAGR of .84% per year over the 10 year period. Long Term CDs (5 year CDs and above) averaged 5.6% per year over the 10 year period.

* Jan 1965 - Dec 1975: S&P had a CAGR of 4% over the 10 year period. Long Term CDs (5 year CDs and above) got well over 6% per year over the 10 year period.

Well, at least you backed off saying that there is any period where the stock market went down 5% a year for ten years. Ignore the chart I posted all you like.

Enjoy your sub-par performance, expensive, hard to get in an out of and risk laden strategy. So much better that the Vanguard S&P 500 Index fund? Whatever makes you feel better. Because you surely are not paying attention to the numbers.

 

[Tenacity]

Well, at least you backed off saying that there is any period where the stock market went down 5% a year for ten years.

I just showed you two 10 year (which is longer than 5 years) averages of when the stock market didn't beat out Long Term CDs and in one of those 10 year periods, the stock market had a NEGATIVE RETURN when inflation was factored in. I just showed it to you.

Ignore the chart I posted all you like.

You, stock brokers and financial advisers can post all of the 100 year old plus charts that you want, I NEED TO KNOW what is the S&P Fund going to do for 2016 - 2046 because that's the only thing that's relevant to my situation.

You are posting 100 year old charts that included a stock market that wasn't as influenced and artificially pumped up through central banker "low rate" influence, globalization, and other fraud related Global NWO measures.

Nobody wants to talk about the GO FORWARD with stocks, all you guys want to do is dust off some 100 year old chart but I remind you of the statement on the bottom of the mutual fund statements and I'll paraphrase: PREVIOUS PERFORMANCE has nothing to do with FUTURE PERFORMANCE.

Enjoy your sub-par performance, expensive, hard to get in an out of and risk laden strategy. So much better that the Vanguard S&P 500 Index fund? Whatever makes you feel better. Because you surely are not paying attention to the numbers.

I'll enjoy it greatly. It's funny you mention "hard to get out of" when the mantra is buy/hold for 20 years. We should be looking at a 20 year investment timeframe not a day trading or short term trading aspect, so why would you need to "get out of" the investment so quick?

And the only numbers you have provided are the 100 year old charts that stock brokers and financial advisers provide when they want you to put 80% of your passive retirement monies with their brokerage so they can make 1% a year off "managing your assets" while you take on all of the risk.

You do whatever you want....just like I'm going to do whatever I want. I'm not investing SHYT into the stock market until I get information on 2016 - 2046 prospective stock appreciation forecasts. So far, all I get are 100 year OLD performance charts which does me no damn good.

 

[Tictac]

I just showed you two 10 year (which is longer than 5 years) averages of when the stock market didn't beat out Long Term CDs and in one of those 10 year periods, the stock market had a NEGATIVE RETURN when inflation was factored in. I just showed it to you.




You, stock brokers and financial advisers can post all of the 100 year old plus charts that you want, I NEED TO KNOW what is the S&P Fund going to do for 2016 - 2046 because that's the only thing that's relevant to my situation.

You are posting 100 year old charts that included a stock market that wasn't as influenced and artificially pumped up through central banker "low rate" influence, globalization, and other fraud related Global NWO measures.

Nobody wants to talk about the GO FORWARD with stocks, all you guys want to do is dust off some 100 year old chart but I remind you of the statement on the bottom of the mutual fund statements and I'll paraphrase: PREVIOUS PERFORMANCE has nothing to do with FUTURE PERFORMANCE.




I'll enjoy it greatly. It's funny you mention "hard to get out of" when the mantra is buy/hold for 20 years. We should be looking at a 20 year investment timeframe not a day trading or short term trading aspect, so why would you need to "get out of" the investment so quick?

And the only numbers you have provided are the 100 year old charts that stock brokers and financial advisers provide when they want you to put 80% of your passive retirement monies with their brokerage so they can make 1% a year off "managing your assets" while you take on all of the risk.

You do whatever you want....just like I'm going to do whatever I want. I'm not investing SHYT into the stock market until I get information on 2016 - 2046 prospective stock appreciation forecasts. So far, all I get are 100 year OLD performance charts which does me no damn good.

Like I said before, enjoy your sub-par, expensive and risky strategy.

I pay nowhere near 1% to have a broker manage my money. I don't have a broker. I invest direct with Vanguard, pay less than 20 basis points a year with no other fees and minimal tax events because the 7 funds I use are index funds. You are taking more risk and paying way more than 1% to get in and out of your debt instruments for which you get returns that do not equal the returns I get and have gotten for the last 30 years.

The same risks, plus the other risks you take (other than initial stated yield for your debt investments) affect all financial instruments. You buy and sell at current market rates. So whatever the nominal yield, the price of the debt you buy is adjusted (via premium or discount) for the expected (and unknown) implied yield curve. That's before you add in credit risk, reinvestment risk and price risk.

I've worked in the debt markets for over 30 years. Yet the only thing I use financial investments in debt for is to hedge against inflation (TIPS) and deflation (30-year US Treasury bonds), both of which have 15% of my portfolio. The other 70% is in equities and REITS. I have 11% compound growth for the entire period since 1982.

Risk simply boils down to the idea that more things can happen than will happen. Risk management is about reducing uncertainty as best you can. If you want more return that short US T bills, you will take risk. Period.

You want certainty about the future. Certainty does not exist at all in life or in investments anywhere ever.

 

[Tenacity]

- I don't trade my fixed income investments, I buy and hold. So there's no "fee" I'm paying to get out.

- If you want to be in your 60's with over 70% still in stocks, all power to you.

- I'm not looking for 100% certainty nor investments without any risk. ALL I'm asking for (since you have 30 years of market experience which is damn near my entire lifetime) is for you to give me FORECASTS on what stocks are likely to do for 2016 - 2046 without using 100 year old charts as the basis for the forecasts.

That's all I'm asking for.....

 

[Tictac]

That's all I'm asking for.....

When you can forecast your NET returns for your preferred financial investments for the same period, let me know.

 

[Tenacity]

When you can forecast your NET returns for your preferred financial investments for the same period, let me know.

We do this in business and sales all of the time. We do planning, make estimates/forecasts on performance per year and per quarter, then establish quotas based on said estimates.

Why is it that nobody can provide GO FORWARD forecasts on Stocks TicTac? You've worked in the markets for 30 years, can you provide more information on why nobody can provide a prospective forecast? I seriously don't understand that.....

 

[Tictac]

We do this in business and sales all of the time. We do planning, make estimates/forecasts on performance per year and per quarter, then establish quotas based on said estimates.

Why is it that nobody can provide GO FORWARD forecasts on Stocks TicTac? You've worked in the markets for 30 years, can you provide more information on why nobody can provide a prospective forecast? I seriously don't understand that.....

Because forecasts are bullsh*t for anything and everything. Forecasts are based on assumptions that can and will be different from what happens.

Pick something, anything - financial investments or not that was forecasted 30 years ago and came out anything like what the original forecast predicted. I'll wait here (forever).

If they pay off, you could dump your entire portfolio into 30-year US Treasury bonds today. If the US dollar doesn't collapse, if the federal government does not default on its debt you will earn 2.67% annually (not compound but simple interest) for 30 years. That's as close to certainty as you will get.

 

[Tenacity]

Because forecasts are bullsh*t for anything and everything. Forecasts are based on assumptions that can and will be different from what happens.

Pick something, anything - financial investments or not that was forecasted 30 years ago and came out anything like what the original forecast predicted. I'll wait here (forever).

If they pay off, you could dump your entire portfolio into 30-year US Treasury bonds today. If the US dollar doesn't collapse, if the federal government does not default on its debt you will earn 2.67% annually (not compound but simple interest) for 30 years. That's as close to certainty as you will get.

I've already given you an example of forecasts being a part of business planning and sales planning, which are two "investments", even though they are active investments. You won't even get a business loan without having a business plan full of forecasts and estimates.

If I were going to go into a 30 year fixed income investment, I wouldn't do a US Treasury bond, I would do a 30 year Brokered CD which can be found from 3.25% - 3.5% right now.

Business, real estate, fixed income........just about EVERY investment has a GO FORWARD prospective forecast tied to it where the investor can plan out (or estimate) what their investment will grow to over a period of time going forward.

Stocks are the only damn investment vehicle where you have to count on what they did yesterday, to somehow predict what they are going to do tomorrow, which makes no damn sense considering that yesterday's influences and market plays are not tomorrow's influences and market plays.

 

[l_e_g_e_n_d]

I'm still here scratching my head waiting for Tenacity to cite these no risk 5% bonds/instruments he invests into.

I have a hunch I will be here for a while.

 

[Tictac]

I've already given you an example of forecasts being a part of business planning and sales planning, which are two "investments", even though they are active investments. You won't even get a business loan without having a business plan full of forecasts and estimates.

If I were going to go into a 30 year fixed income investment, I wouldn't do a US Treasury bond, I would do a 30 year Brokered CD which can be found from 3.25% - 3.5% right now.

Business, real estate, fixed income........just about EVERY investment has a GO FORWARD prospective forecast tied to it where the investor can plan out (or estimate) what their investment will grow to over a period of time going forward.

Stocks are the only damn investment vehicle where you have to count on what they did yesterday, to somehow predict what they are going to do tomorrow, which makes no damn sense considering that yesterday's influences and market plays are not tomorrow's influences and market plays.

So don't do it. I'm done here.

Brokered CDs have credit risk over your 30 years. So that is not the certainty you crave.

Comparing investor lending requirements to a 30 year stock index forecast? Seriously?

 

[Tictac]

I'm still here scratching my head waiting for Tenacity to cite these no risk 5% bonds/instruments he invests into.

I have a hunch I will be here for a while.

Especially when the stock market is going down 5% a year for 10 years at the same time.

LOL

 

[Tenacity]

I'm still here scratching my head waiting for Tenacity to cite these no risk 5% bonds/instruments he invests into.

I have a hunch I will be here for a while.

Because I never said anything like that. Do me a favor and respond quoting me saying that I invest in ANYTHING without risk tied to it? In terms of 5% or more fixed income, these are your long term munis, your corporate bonds, and a lot of P2P loans.

So don't do it. I'm done here.

Brokered CDs have credit risk over your 30 years. So that is not the certainty you crave.

Comparing investor lending requirements to a 30 year stock index forecast? Seriously?

You and Legend like to put words in people's mouths when you can't answer a question. I never said anything about investing in ANYTHING without risk or with 100% certainty. All I asked you for was some go forward forecasts on stock market returns. A forecast is a not a certainty, it's an ESTIMATE.

And it depends on the type of brokered CD you purchase, if you purchase those without call options that function "just like" your local bank's CD would function, there's really nothing to worry about for the most part.

You are just dancing around like a puppet TicTac because you have NO ANSWER to the question I pose. This is what guys like you and Legend do often when you can't answer a damn question, instead of just saying, "Tenacity, I DON'T HAVE THE ANSWER..." you dance around and throw out cheap insults.

Dude it's really getting old. The Moderators had to close out how many threads now due to you bickering back and forth with stupid insults like a teenager TicTac?

 

[Tictac]

Because I never said anything like that. Do me a favor and respond quoting me saying that I invest in ANYTHING without risk tied to it? In terms of 5% or more fixed income, these are your long term munis, your corporate bonds, and a lot of P2P loans.




You and Legend like to put words in people's mouths when you can't answer a question. I never said anything about investing in ANYTHING without risk or with 100% certainty. All I asked you for was some go forward forecasts on stock market returns. A forecast is a not a certainty, it's an ESTIMATE.

And it depends on the type of brokered CD you purchase, if you purchase those without call options that function "just like" your local bank's CD would function, there's really nothing to worry about for the most part.

You are just dancing around like a puppet TicTac because you have NO ANSWER to the question I pose. This is what guys like you and Legend do often when you can't answer a damn question, instead of just saying, "Tenacity, I DON'T HAVE THE ANSWER..." you dance around and throw out cheap insults.

Dude it's really getting old. Moderators had to close out how many threads now due to you bickering back and forth with stupid insults like a teenager TicTac?

You don't want an answer. You want affirmation.

I don't have the answer. Happy now? Neither do you. I do know this. Every uptick in yield for anything you invest in reflects in large part the risk you take for buying it. And that's before you take into account the cost of buying it either in direct fees or price changes to compensate the seller.

Bicker on Ten. You're on your own now. Your insults are not better than anyone else's here.

 

[l_e_g_e_n_d]

Ten, don't just generalize with "muni- and corporate bonds or CDs." Cite your 5% instruments. I am very interested in what exactly you invest into.

 

[Tenacity]

You don't want an answer. You want affirmation.

There you go putting words in my mouth again sir.

I don't have the answer. Happy now? Neither do you.

Thank you, that's all you had to say. But most people in the stock investing community will never admit this. Nobody knows what the stock market is going to do, BUT....the first thing out of everybody's mouth is how the stock market has always out-performed everything else (which isn't TRUE).

Makes...no...damn...sense.

I do know this. Every uptick in yield for anything you invest in reflects in large part the risk you take for buying it. And that's before you take into account the cost of buying it either in direct fees or price changes to compensate the seller.

I understand. The more potential return, the more potential risk, is the general theory. Again, I never said anything about investing in something that has no risk component to it. The only thing I was asking was why are stocks never provided a GO FORWARD forecast and only rely on 100 year old charts? Then the next question was why does "inflation" only come up when discussing fixed income investments but never comes up when discussing stocks?

People refer to stocks as growth investments, they say, "Tenacity, you need some GROWTH, so invest in stocks..." but dude you have no forecast for what the stock market is going to do over the next 30 years, so how can you prop up the market as a GROWTH vehicle if you can't provide a forecast of growth?

Makes...no...damn...sense.

 

[Tenacity]

Ten, don't just generalize with "muni- and corporate bonds or CDs." Cite your 5% instruments. I am very interested in what exactly you invest into.

Dude, I've already answered your damn question. The investments are public information, you can easily go to the websites directly and see what I'm referring to. Log into Vanguard to see a list of fixed income vehicles for example. Go to Lending Club and take a look at P2P loan portfolio returns.

You flat out lied about me saying I invest in no risk 5% fixed income investments, then I call you out on it about posting the quote of me saying that...and you just over look that request and continue asking me the same question I JUST ANSWERED.