Stock Market

[V3r1f13d]

I took some time off from playing sports to put more time into managing my portfolio.
I intend to play some more sports this year, but what happened to the stock forum?

Any short/long traders here?

[joepa66]

Were only several of us posting in that forum so I think it got canned!

I have some mutual funds, and riding with some long-term stocks right now with F, EGO, HI, SD, WFT, IPGP, ARO, FUN, MSFT and a couple of others. How about you?

[V3r1f13d]

I held 3 mutual funds (TEDIX, AEPGX and GBRAX) and was in and out of stocks (BAC, MAT, IL, DIS, S, etc.) and played some ETF's. The ETF's made me money. Did nice when gold plummeted (DZZ). Did nice with the 3x small cap bear (TZA)I came up a little on a BAC trade, Mattel and Disney have always done well for me. Got out of Sprint before it tanked (minor loss). Got hit fairly hard with Intralinks. I'd say I lost about 10-15% in the last couple of years. Not bad considering some people are in the 40% plus zone.

So, now I basically sold everything. Cashed out except for TEDIX which is my domestic fund which pays great dividends so I stayed in.

I'm going to look for day or two, and possibly just short the hell out of everything. Holding TZA right now. I might short the Euro as well.

I think I am going to go like this in 2012
40% mutual fund

40% stock (probably the majority in a blue chip like DIS, then some in BAC and maybe even Tokyo Electric Power, might grab some more Mattel, not sure yet).

20% ETF. Going to play TZA/TNA, DZZ (once gold gets back up to 1800 or so), EUO (watching Europe) and SCO/UCO (monitoring oil).

Everyone has great hope for 2012. We'll see. I think if it is a bad year, 2011 will look like a good one with how bad 2012 will be. We either have some what of a recovery, or the global market gets hit hard.

[V3r1f13d]

Well, I tried to hold out a bit but I couldn't.
Stocked up on Disney this morning. I look at it as a long term investment (plus a safe haven) more than anything. Threw almost all of my single stock reserve fund into it.

Bought some EUO as well. Planning to sell if I make 10%, hoping to go up from there to 20% but I'll put a stop loss at 10% if it clears above.

Was hoping to grab BAC at $6 before it passed me up. Way too bullish on BAC. I'll wait for it to hit $6 again, because it definitely will.

So right now I'm all about playing the ETF's and catching BAC at a low so I can tuck it away.
DIS and TEDIX long haul (no worries).

[akatdrake]

Hey fellas, I am pretty new to this - and only have one account through dvinvest.com (my 401k runs through there). My pre-tax contribution is 10.0% with 3.5% employee match. I am 28 years old and recently switched to this:

Interm./Long-term Bonds:
5% PITAX

Large-Cap Stocks:
15% RWMEX
15% TEBIX
15% VINIX
15% RGAEX
*only these four are offered*

Small/Mid-Cap Stocks:
5% LACAX
30% PRNHX

Truthfully, I played around with it but the only research I did was look on Morningstar at the Risk vs Reward rating they have there. I feel like a fish out of water... I know I have a long way to go before I retire, but I'd like to sooner rather than later. I read I should only have minimal portion of my assets in Bonds as they're more long-term vs stocks that are short-term? Does that make any sense?

Any advice from you guys?

[akatdrake]

I do however save my money in an Ally MMA, and have been looking to get a Roth but haven't pulled the trigger on that. Is there a preference to what kind of company to get a Roth through? I have options through companies like Ally, or through State Farm (my insurance company), or through US Bank. Do you guys suggest anything?

[V3r1f13d]

Those aren't stocks. Those are all mutual funds.
It all really depends on your outlook. People will tell you "you're young, think long term".
I think more along the lines of "I'm young (29), I can take risks".

I put about 40% of my portfolio in "safe" long term dividend paying mutual funds.

I put the other 40% of my portfolio in stocks, mostly long term divided paying but in today's market (extremely volatile) it pays to day trade. I have no problem buying a stock, selling it, then buying it back for cheaper. Long term is long term. It doesnt mean I can't buy and sell.

Then I'll play with the other 20% which really requires you to live and breathe the market.

What I am saying is, that's where I personally feel comfortable with and do well with.
My numbers can change. You need to find what works best for you.

My bold opinion? Having all of your money in straight mutual funds is a waste of money. About 30% of these mangers end up beating the actual market year to year, WHILE still charging you fees to manage and buy.

Study up a bit. Make some fake trades on paper. See how well you do. If you are that new, I'd say learn first. It's not like sport betting where you just pick a team and enjoy the game. Wall Street can crush people.

Disney is spiking but I am going to sell at close.
I'm shorting the Euro (US Dollar goes up, plus Euro goes down, at a 200% inverse) and it's doing well.

I think the market is going red next week.
Learn to play shorts. Right now, in my opinion, that's the only way you are going to make money. I don't see a bull market until 2014.

[V3r1f13d]

Originally Posted by akatdrake

I do however save my money in an Ally MMA, and have been looking to get a Roth but haven't pulled the trigger on that. Is there a preference to what kind of company to get a Roth through? I have options through companies like Ally, or through State Farm (my insurance company), or through US Bank. Do you guys suggest anything?

Just max out your 401K. I'd take advantage of your employer match. Not too many of those going around these days. If you max out your 401K your Roth or Trad IRA can't be a tax deduction. You can still make contributions, but you can't claim a deduction. I'm not a licensed CPA, but that is my understanding.

Go with a company that has 24/7 phone service and a nice online site. Something like ETrade or Scottstrade. Places like US Bank, State Farm, Edward Jones, etc. won't let you day trade. If they do allow it (ie-Edward Jones) they rape you per transaction.

Right now you are playing like "I think these 5 teams will win the world series". You are doing that every year. Where as day trading is actually playing days, weeks, and at the most a month.

Get into it. It will pay off.

[Kevin]

I'm pretty conservative and usually just do the blue chippers such as costco, walmart, Proctor and Gamble, etc, but found HOOK to be of interest. Their beer is incredible. I could see them doing the same thing Sam Adams did. I'm not the only one who likes them, I believe Budweiser bought into them.

They have a beer called "Widmer Hefeweizen" and the stuff is off the hook good.

A wise successful investor once told me buy into things that I think are good and of high quality. HOOK is a winner.

[Kevin]

I'm pretty conservative and usually just do the blue chippers such as costco, walmart, Proctor and Gamble, etc, but found HOOK to be of interest. Their beer is incredible. I could see them doing the same thing Sam Adams did. I'm not the only one who likes them, I believe Budweiser bought into them.

They have a beer called "Widmer Hefeweizen" and the stuff is off the hook good.

A wise successful investor once told me buy into things that I think are good and of high quality. HOOK is a winner.

[PhilRivers]

I do however save my money in an Ally MMA, and have been looking to get a Roth but haven't pulled the trigger on that. Is there a preference to what kind of company to get a Roth through?

Look into a Roth IRA at Vanguard. Vanguard has the lowest mutual fund fees in the industry. Think of them as 5dimes reduced juice. You can create a Roth IRA online at their website vanguard.com. My advice to you would be to do this as soon as possible as you can only contribute $5k per year to a Roth IRA. You have until April 15th to make contributions for last year, 2011.

The reason a Roth is so attractive is that it grows tax free and when you withdraw at retirement you withdraw everything tax free. Tax free my man! You cannot beat that and this type of account is a must to take advantage of and max out if you are able to. So with that in mind, to take advantage of this even more, you can put your long term investments that are going to be tax inefficient into your Roth (i.e. bonds and REITS). Another benefit of the Roth IRA; in an emergency you can withdraw your contributions (not your earnings) at any time without penalty, although I would avoid this at all costs since you're only allowed to contribute $5k/year.

As far as stocks go, I'm no Wall Street fat cat and don't pretend to be. I know my stock picks won't beat the overall market without pure luck. Regarding mutual funds that strive to beat the market (also known as active managed funds), nearly ALL active managed mutual funds do not beat the market average over long period of time , even the winners due to their high fees. So I invest in the opposite of active managed funds, which would be index funds. I don't beat the market, but the market doesn't beat me either. US Stock market index, International stock market index, bond market index, etc. The fees for index funds (as well as their other funds) at Vanguard are unbeatable (for example my total stock market index fee is a ridiculously low 0.18%) and you can't beat the diversification either.

[V3r1f13d]

Yes but with a Roth you are paying your taxes going in.
So let's say you are in a 25% tax bracket, your $5000 is taxed $1250.
I rather get the tax break deductions up front, then worry about my taxes when I am retired. A good CPA and tax planning can negate the capital gains tax at the end.

Also, mutual fund loads are the same no matter where you go. You can't pay a lower load from one broker to the next. If the load is 5.5%, that's what it is everywhere. Vanguard may have their own hedge funds which charges less, but that's their hedge fund. If it's cheap you are looking for there are plenty of no-load mutual funds at other places (in and out).

Then you also have to worry about the class you are in. It could charge you a load on the way out.

At that point you might as well just bet on a stock index.

[PhilRivers]

Yes but with a Roth you are paying your taxes going in.
So let's say you are in a 25% tax bracket, your $5000 is taxed $1250.

That is correct. The money that goes into a Roth IRA has already been taxed. In addition to a 401k it is still highly advisable to take advantage of any tax sheltered space available to you. Your money grows tax free in both accounts. The 401k you pay taxes at the end instead of up front and the Roth you pay taxes up front but none at the end. If you can afford both, do so, but ensure you're at least contributing enough to 401k to receive the full company match first.

A good CPA and tax planning can negate the capital gains tax at the end.

If you're speaking to 401k then I'm not sure where you're getting this misinformation. Unlike the Roth, you will be subject to pay taxes when you are able to withdraw from a 401k, and for many people they will in fact be in a higher tax bracket than what they're in right now, not to mention taxes are likely to go up anyway.

Also, mutual fund loads are the same no matter where you go. You can't pay a lower load from one broker to the next. If the load is 5.5%, that's what it is everywhere. Vanguard may have their own hedge funds which charges less, but that's their hedge fund. If it's cheap you are looking for there are plenty of no-load mutual funds at other places (in and out).

Actually this is not true either, however I forgot all about load fees that many funds charge. Sheesh, what a racket. Load fees are essentially a sales fee up front or a sales fee for when you sell your fund, in addition to operational fees. Vanguard funds do not charge ANY load fees (front or back). The only fee they charge is operational fees, and the 0.18% that I was referring to is Vanguard's operation fees. That's the only fee you pay for stock market index fund. They cannot be beat. Most other actively managed funds will charge you 1-3% (or more) operational fee in addition to any load fees they may have. That's an additional 1-3+% that fund has to win by every year to keep up with market average. Over the many years you should be able to see why nearly all active managed funds don't beat the market.

[V3r1f13d]

Yes, you will pay taxes when you distribute your 401K but that's with your tax return filings. Your broker gives you the entire amount. They won't withhold anything. So if you take your contribution Jan 1st, you have a full year to wash it. Plus you aren't obligated to take all of it at once if you don't want to. So you can wash it little by little (depending on how long you think you will live, haha).

You can play the index with a stock symbol and just pay for the transaction rather than an operation fee.

If you want to play the entire Russell 2000, the symbol RUT.
There is a stock symbol for virtually anything. I rather pay the $0 - $10 fee rather than deal with percentages. Whatever works for you.

Personally I wouldn't play an index unless its at a 2x or 3x inverse. Other than that it moves way too slow.

[PhilRivers]

If you want to play the entire Russell 2000, the symbol RUT.
There is a stock symbol for virtually anything. I rather pay the $0 - $10 fee rather than deal with percentages.

You can't buy RUT. It's just a symbol that tracks the index.