All my money is tied up in cash.
That means you have locked in a loss of maybe a couple % a year (currently) in buying power to real inflation (not the rigged CPI), foregoing any gain and not risking a larger loss.?ÿ Not a bad current strategy if you can afford it.
Most who take the personal route lose. I would guess maybe 3 out of 1000 self-investors actually beat the S&P. Fortunately I was told by my Grandmother never ever invest without a financial manager. Why she told me this when I was 16, and broke, I haven’t a clue, but I remembered. ????
@flga
The one investing antidote that always sticks in my head was that when Peter Lynch managed the Fidelity Magellan fund from 1977 until 1990 it averaged a 29.2% annual return and over that same time frame the majority of the investors in it lost money.
I've never owned any stock (directly or indirectly), but if I HAD TO buy stock at this point, I would probably buy Boeing, and hope that it rebounds in my lifetime (which is probably a crap shoot).?ÿ
🙂
?ÿif I HAD TO buy stock at this point, I would probably buy Boeing, and hope that it rebounds in my lifetime (which is probably a crap shoot).?ÿ
But if you look at the price history, BA isn't down a huge percentage - maybe lost a quarter of its peak and still well above its price of a couple years ago.?ÿ Given the severity of their problem and estimated time to get those planes back in the air (which like most schedules keeps getting extended) I wouldn't be attracted to it at this point.
I don't put a lot of my money into individual stocks.?ÿ What I do buy is based on Value Line ratings of potential growth and safety, thinned by my own prejudices.?ÿ I'm convinced that's a good start.?ÿ My biggest weakness is an unfortunate tendency to hold onto losers too long hoping they will recover.
1. Very few investors beat the S&P 500 in the medium to long run. Most of the few that do are simply outliers. Lucky.
2. A large percentage of the money the investment banks/brokerages make are commissions on sales to "the little guy". Therefore, the salesman/brokers are encouraged to churn accounts. That is how a mutual fund can average 30% growth for years and an investor can still lose money. By jumping in and out, generating a fee each time. And also very likely paying tax on any before commission earnings.
My 401k/IRA money is mostly in an S&P500 fund. No commission to buy, very low fee to hold, average returns that aren't often beaten.
Imagine a room with 1024 people in it. Give each of them a quarter to flip. Tell them that object of the game is to flip heads. One wrong flip and they are out. At the 1st flip about 500 fail are are told to leave. Flip again and round 250 are asked to go. Third flip eliminates another half, or so. By the 8th flip you have 4 people, more or less, left in the room. These four people have flipped heads an incredible 8 times in a row! These people are true savants! They defy statistics! They cannot flip a tail. WRONG! It's flat luck, their next flip has a fifty/fifty chance of being a tail just like everybody else's.
So it is with stock pickers. Which is what a mutual fund manager is. You can look at past results and find somebody who has been uncommonly successful for some long period of time. But what you need to know is whether their next pick will continue the trend. And the fact is that the next pick is just another flip of the coin.
to hold onto losers too long
Contrast this with the number of people I know personally who were formerly employed at either Dell or Whole Foods and sold most/all of their bennies stock at some point when it seemed too good to be true. People who have paid-for houses or aren??t doing badly, but who would be literal billionaires now.
To many people go into retirement, thinking that the "current trend" will carry through their retirement, it won't.
My brother in-law thought he would retire early, at the peak of the dot com boom. It didn't last long. Hi was a manager for Ma Bell and left with a pocket full of fat stock. Ended up with 10 cents on the dollar...
If he would've reinvested in something a little more stable, he would be in a lot better shape right now.
Don't be greedy...
When I first went to college about 20 years ago I applied for a job at an amazon call center that had just opened in my area. By that time I had owned my own desktop for 6 years and used computers all the time in school. I went to the first day of training which was held in a classroom type setting full of maybe 30 people. They were like "...and this is a mouse. (pause for 1 minute to let people wrap their head around that) Moving the mouse with your hand will move the cursor on the screen accordingly... (pause for 1 minute to let people wrap their head around that). Now this is a mouse pad, you place the mouse ON the mouse pad... (pause for 1 minute to let people wrap their head around that) and so on..". About 10 minutes into this 8 hour ordeal I wanted to claw my own eyeballs out. It was such a tedious, awful experience I couldn't bring myself to show up for day 2 of the training. It's still the only time in my life I've no-showed a job.
I got a check in the mail for the 1 day I was there which I expected, probably $50-60. But I also ended up getting a check for $200 at the end of the year as some sort of profit sharing or bonus program which completely shocked me. Now when I think about it I could probably have been a millionaire if I had stayed. ????
To many people go into retirement, thinking that the "current trend" will carry through their retirement, it won't.
My brother in-law thought he would retire early, at the peak of the dot com boom. It didn't last long. Hi was a manager for Ma Bell and left with a pocket full of fat stock. Ended up with 10 cents on the dollar...
If he would've reinvested in something a little more stable, he would be in a lot better shape right now.
Don't be greedy...
I worked with a guy who had everything in the very hottest tech fund in 2000.?ÿ He came out of that period with 1/3 of what he went in with. Diversity is essential.
hahahahaha. that sounds about right. so two old friends of mine were among the first 8-10 employees at whole foods. that location, btw, was still open and operational the first time I visited Austin in '91. it was about the size of a, well, what it is now- a goodwill. they worked there for about a dozen years, whole foods grew and spread and went regional, and they took gigs in the "corporate" part, but it was still very much a hippy/dippy family kind of place. '93 they built a big flagship store right up the street- a big old building that they anchored and shared with a couple other places, but still not even the size of your typical Kroger/Safeway/etc. This is when Dave and Diane bugged out- it got too big for them and they couldn't imagine the stock could possibly ever do better or that the store would even last after making that big leap up. so they cashed out, paid their mortgage, and have been doing odds and ends kind of gigs befitting of their bohemian natures since, happily. (I met Dave as a coworker in a sign shop in '95).
and they're friends, but i've never asked too much- t'ain't my bidness- but the impression i always got was they got rid of it wholesale. 27 years ago...
btw- that "new" giant whole foods is still there, but it's just across the street from world HQ now. it's been an REI for about 15 years.
Invest in what you know and what makes you happy.?ÿ I don't know diddly about pork bellies but I've heard there are billionaires out there who do.?ÿ Good for them.?ÿ While they put their money in pork bellies they aren't investing in anything I want to own.?ÿ That works for me.
I like things I can see and touch.?ÿ They may not have the highest return in the short run but that's fine because I hope to never need to cash in my investments.?ÿ I'll let the heirs fight over them.?ÿ If they try to convert them into something other than what they are now, that's their problem.
In 1968 I had a "Business Math" class in HS.?ÿ One of my lessons was to 'invest' an imaginary $500 in a stock, track it weekly and write a report at the end of the semester as to how my stock performed.
NASA's Apollo program was going great guns trying to get to the moon so I decided to invest in one of the larger contractors named McDonnell-Douglas.?ÿ I made a killing.?ÿ A lot of the kids in the class didn't do so well.?ÿ As I was writing my report I realized I had not actually invested in a huge defense contracting firm, but a hamburger chain named McDonald's...just because their tricky little three letter abbreviations were so similar. I had to 'fess up to the class about the mistake I had made.?ÿ I made out with a B in the class and also wished my investment had been real.?ÿ
I was also making around $40 a week pumping gas at Bill's 66.?ÿ At the time gold was $35 an ounce.?ÿ A little foresight and I would have spent a lot more of my money in buying gold than chasing Trisha Stevens or worrying about chrome valve covers.
worrying about chrome valve covers.
What about glass packs? and Holley 4bbl's and Crager mags and Hurst shifters and.......ad nauseam. ?????ÿ
Wait a minute! Did Trisha Stevens come equipped with chrome valve covers? That's something I assume I would like to see. 😳 😳
I worked with a guy who had the bulk of his investment dollars in IBM. The needle didn't move much for IBM and by the mid 90's he couldn't take it anymore and sold to diversify. In 97 they took off and between then and 2000 doubled and split something like 3 times. I thought he was going to start crying the first time he told it to me. I'm not disagreeing about the importance of diversity by any means, it's just that story has always stuck with me. He made the safe play and did what everyone told him was the "right" way and lost out on what could have knocked 5 or maybe even 10 years off his retirement age.
What the heck is retirement age? Is that when you decide to start spending your assets instead of growing them? Better plan on dying young and always worrying about making things stretch instead of enjoying life. Instead, assume you are going to live to be 95 and healthy enough to enjoy the money you are spending.
Trish came with what appeared to be some of the finest equipment ever installed on a young lady...but I could only guess. I never even got to pop the hood. 🙁
I've done much better since investing on my own versus using financial advisers.?ÿ
I've picked a few individual stocks that tripled and quadrupled in value within a 10 years period along
with a couple that tanked. I now have everything resting mostly in a basic 3 fund portfolio, a few individual large cap stocks and real estate.
Savvy real estate investing is the cr??me de la cr??me.
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