OT: Stock trading

[uconndogs]

If you were planning to buy a house that money should have never been in equities anyways.

Exactly right!

 

[UConnSwag11]

Like I said the other day. I think there's a risk of panic. Of absolute catastrophe. There are a few things that could mitigate the issues, and policymakers insist on doing the opposite or ignoring reality. So at the moment, we are seeing money flee a market that is already down plenty, perhaps in fear of the doomsday scenario. As soon as there are indications of stability, that the worst isn't coming (depression era event) it will flood back in.

Some of the people I listen to say the s & p is going to 3,600. Possibly 3,100 before the bleeding slows down

 

[CTBasketball]

Some of the people I listen to say the s & p is going to 3,600. Possibly 3,100 before the bleeding slows down

That’s just rough technical analysis - so it’s very possible. But it could deviate from that. I have SPY going to the $355-380 range before any big moves happen (to upside or downside).

 

[HuskyHawk]

If you were planning to buy a house that money should have never been in equities anyways.

 

[husky429]

It didn't go over my head. Your argument was just a silly one.

Do you technically have less money? Duh.

The point is that if you are using equities as longer-term investments like they should be and not to buy a house in a year, then you don't need it, and its value is all but guaranteed to increase in the long run. An even mildly intelligent investor knows a 10 year downturn is ALWAYS a risk and plans accordingly. Not even a risk... it's basically a guarantee. It's a mindset thing, not a literal thing.

 

[HuskyHawk]

If you were planning to buy a house that money should have never been in equities anyways.

Exactly right!

Yes of course. But it doesn't change the fact that your ability to liquidate and convert to cash has changed. You have lost that ability, however theoretical. When people say you lost nothing it simply isn't true. Your asset has been devalued.

Futures look like a reversal of yesterday.

 

[uconndogs]

Yes of course. But it doesn't change the fact that your ability to liquidate and convert to cash has changed. You have lost that ability, however theoretical. When people say you lost nothing it simply isn't true. Your asset has been devalued.

Futures look like a reversal of yesterday.

Really talking about two different things here. Yes, there is a loss of value whether realized or not, and there are certainly consequences to that.

As for the house analogy, I think the point was simply that if you were looking to purchase a home in the short-term, the liquidity you needed to do that shouldn't be in the equity markets.

 

[HuskyHawk]

Really talking about two different things here. Yes, there is a loss of value whether realized or not, and there are certainly consequences to that.

As for the house analogy, I think the point was simply that if you were looking to purchase a home in the short-term, the liquidity you needed to do that shouldn't be in the equity markets.

Yes, I know that. But some things aren't planned. So if something unexpected happened and you needed it, the money isn't there to liquidate, or at least less of it is. Bezos, Zuckerberg and Musk can shrug off losing billions in value, but ordinary people can still be impacted.

The current retirement advise has changed for example. Retirees shouldn't just be in fixed income, they lose out on too much potential appreciation over 20-30 years of retirement. These declines can impact them.

 

[I Bleed Blue]

If you were planning to buy a house that money should have never been in equities anyways.

I’m learning my lesson the hard way

 

[8893]

Yes, I know that. But some things aren't planned. So if something unexpected happened and you needed it, the money isn't there to liquidate, or at least less of it is. Bezos, Zuckerberg and Musk can shrug off losing billions in value, but ordinary people can still be impacted.

The current retirement advise has changed for example. Retirees shouldn't just be in fixed income, they lose out on too much potential appreciation over 20-30 years of retirement. These declines can impact them.

Yeah, I think most of us feel the same--at least I do--despite the conventional wisdom that the value of the equities only really matters when you sell.

I remember trying to wait out the end-of-year plunge in 2018 because I needed to take my daughter's Spring tuition out of the 529. It got worse and worse every day I waited, and I finally had to cash out on the day it hit bottom. The next day it rallied back of course, so I lost like $5k just because I needed to use the money.

Based on that experience, when I got a nice check in the fall of 2019, I kept it in a money market fund instead of investing it, because of the conventional wisdom about the markets tanking the next year based on the election result. Fortunately and unfortunately, it's still there. And now I'm thinking it may be time to start putting it back into the 529 for our youngest, who will be going to college in 2024.

 

[husky429]

I’m learning my lesson the hard way

If you have any extra ying around and don't need it for a while, series I bonds are probably best bet right now. I'm sure you know that though.

 

[HuskyHawk]

Yeah, I think most of us feel the same--at least I do--despite the conventional wisdom that the value of the equities only really matters when you sell.

I remember trying to wait out the end-of-year plunge in 2018 because I needed to take my daughter's Spring tuition out of the 529. It got worse and worse every day I waited, and I finally had to cash out on the day it hit bottom. The next day it rallied back of course, so I lost like $5k just because I needed to use the money.

Based on that experience, when I got a nice check in the fall of 2019, I kept it in a money market fund instead of investing it, because of the conventional wisdom about the markets tanking the next year based on the election result. Fortunately and unfortunately, it's still there. And now I'm thinking it may be time to start putting it back into the 529 for our youngest, who will be going to college in 2024.

That's the point I was trying to make. The interest rate situation of the last decade+ essentially meant that equities were the only place you could park your funds, since there was no viable money market fund returning more than 1%. So you can leave them there or perhaps in what seems "safer" stocks/funds like SPY because you don't want to miss, for example, the increases from 2019 to late 2021. Back when you could get a 5% CD that was viable. It hasn't been for a long time. I recall my dad taking out one for me at around 16.25% back in the Carter administration.

As for the house, I'm waiting and watching the wildly inflated Cape Cod real estate market. If we get a crash, I'll probably go in. I regret not pulling that trigger several times in the past. Right now prices are dropping, but not as fast as my stock holdings.

 

[8893]

As for the house, I'm waiting and watching the wildly inflated Cape Cod real estate market. If we get a crash, I'll probably go in. I regret not pulling that trigger several times in the past. Right now prices are dropping, but not as fast as my stock holdings.

Yeah, I had been eyeing the same type of thing in the Rhode Island neighborhood where we vacation in the summers. Saw the perfect deal on the day we arrived in the summer of 2019 and the next day it was sold. Been kicking myself ever since, especially when we pass it and see what they've done with it.

Meanwhile, the two houses we've rented for multiple years have both come off the rental market because the owners (with whom we became friendly from years of renting) each decided to move in and retire there. In other words, all these years we've been helping them do what we should have been doing ourselves. Instead, we'll be paying a little more to rent a different place this year.

That said, if we had bought years ago and rented it out, I'm not sure if we would have been able to do all the other trips we've done in the meantime.

 

[storrsroars]

That said, if we had bought years ago and rented it out, I'm not sure if we would have been able to do all the other trips we've done in the meantime.

Back when we had the assets to get a second home, my recurring thought was always similar to considering a timeshare - do I want to be locked into this? There are so many places in the world to see and so little time.

 

[Drumguy]

Back when we had the assets to get a second home, my recurring thought was always similar to considering a timeshare - do I want to be locked into this? There are so many places in the world to see and so little time.

On the other hand, vacation properties within driving distances of major metro areas, at least in the Northeast and CA, are doing tremendous. Lake Tahoe, Lake WInnipesaukee had a huge rise due to the pandemic and there's no inventory on the market so prices are up, way up!

 

[HuskyHawk]

Back when we had the assets to get a second home, my recurring thought was always similar to considering a timeshare - do I want to be locked into this? There are so many places in the world to see and so little time.

Oh I agree. Thinking at the moment is to get a place, rent it out summers, use it spring, fall and winter. Fix it up a bit as needed. Then in a couple of years move there and sell the current house. We are fairly confident that's where we want to end up.

 

[uconndogs]

Bezos, Zuckerberg and Musk can shrug off losing billions in value, but ordinary people can still be impacted.

My understanding is that those guys leverage their stock to avoid realizing huge taxable gains and to manage swings in stock prices. Although Musk did recently sell a huge block of Tesla.

 

[aburks41]

It's times like these that people make millions. So many good companies are "on sale" right now. It might be worse before it gets better but I'm buying low here because some of these companies may not ever see these price levels again. Some look at these times as "oh crap I just lost 20%", I look at them as "where can I buy something that's been unfairly beaten down to make even more $$ in the next 5 years"

I'm stuck in that zone where I was basically 99% invested in stocks so I have no cash to buy anything. Although I am maxing out my 401k so at least I'm getting some money in every pay cycle.

I've "lost" more money since January 1st than I make in my yearly salary + bonus lol. I'm not selling anything so it doesn't really matter, but it still hurts to look at my fidelity balances

 

[8893]

Oh I agree. Thinking at the moment is to get a place, rent it out summers, use it spring, fall and winter. Fix it up a bit as needed. Then in a couple of years move there and sell the current house. We are fairly confident that's where we want to end up.

I still think this is a sound plan, and it definitely worked out well for the people from whom we've rented; but I do also think that those of us who haven't been the second-home owners yet probably underestimate the time, money and headaches the "fixing up" and maintenance costs over the years. Although both were great properties, at least every other summer there was some type of property maintenance "emergency" that required the owners to come out and fix it for the better part of a day, sometimes with a contractor of some sort.

I worry about those types of things because (a) I am not handy; and (b) I wouldn't feel comfortable being overseas or otherwise far away during the rental season, lest an emergency arise.

 

[HuskyHawk]

My understanding is that those guys leverage their stock for exactly that reason, to avoid realizing huge taxable gains and to manage swings in stock prices. Although Musk did recently sell a huge block of Tesla.

Sort of. They mostly do it to maintain control of the companies they built and chart their direction. It's not a coincidence that among the most successful companies of all time, many had founder control for a long time. Microsoft, Apple, Oracle, Ford, Amazon, Facebook, Tesla (Musk took it over very early but didn't found it). Page and Brin still own 51% of Google. Dell lost control, the people who took it over wrecked it, he bought it back and took it private and fixed it.

 

[HuskyHawk]

I still think this is a sound plan, and it definitely worked out well for the people from whom we've rented; but I do also think that those of us who haven't been the second-home owners yet probably underestimate the time, money and headaches the "fixing up" and maintenance costs over the years. Although both were great properties, at least every other summer there was some type of property maintenance "emergency" that required the owners to come out and fix it for the better part of a day, sometimes with a contractor of some sort.

I worry about those types of things because (a) I am not handy; and (b) I wouldn't feel comfortable being overseas or otherwise far away during the rental season, lest an emergency arise.

Fortunately, I've done that. My wife's parents had a place in Vermont. They became infirm and it became ours. Complete with all those headaches. We had a flood come in through the bathroom window (house built into the mountain), that cost us $30k in repairs, including mold mitigation. Thank God the Pandemic allowed us to sell it to a couple from Brooklyn without taking a loss. It be a substantial amount of work. I'm semi-handy. Can do light plumbing (toilets, sinks), and some other things, yardwork. In places like coastal RI and the Cape there are management companies that handle the rental emergencies.

Distance matters a lot. The place in Vermont was 3.5 hours on a good day, much more with Friday traffic. The closest Home Depot was an hour away. Everything in VT is expensive. That made it really hard to manage things like delivery of furniture. But I can get to Falmouth, where we are looking on the Cape, in under an hour (except Friday PM and Saturday AM). Much more manageable. I'm guessing you'd be about an hour+ to RI, right? Doable. Toilets, sinks and vanities are cheap and easy to do yourself and it's fairly rewarding. Anybody can spackle walls and paint.

 

[superjohn]

I'm stuck in that zone where I was basically 99% invested in stocks so I have no cash to buy anything. Although I am maxing out my 401k so at least I'm getting some money in every pay cycle.

I've "lost" more money since January 1st than I make in my yearly salary + bonus lol. I'm not selling anything so it doesn't really matter, but it still hurts to look at my fidelity balances

I know the feeling. As hard as it is try not to look.

 

[husky429]

I still think this is a sound plan, and it definitely worked out well for the people from whom we've rented; but I do also think that those of us who haven't been the second-home owners yet probably underestimate the time, money and headaches the "fixing up" and maintenance costs over the years. Although both were great properties, at least every other summer there was some type of property maintenance "emergency" that required the owners to come out and fix it for the better part of a day, sometimes with a contractor of some sort.

I worry about those types of things because (a) I am not handy; and (b) I wouldn't feel comfortable being overseas or otherwise far away during the rental season, lest an emergency arise.

My parents rented their second house for 15 years before retiring there. All these towns have locals who will work as yiur kind of "emergency contact" for the house if you aren't local. Just some local yocal handyman. Definitely worth looking into costs and such if that's what is making you hesitate on pulling the trigger on the house

 

[husky429]

I know the feeling. As hard as it is try not to look.

Thirding that feeling. My retirement is all in VTI/VXUS and I think I'm down like 60k. Just continuing to DCA and check my balances quarterly.

I have a separate "fun fund" for my play money that I put 100 bucks a month in. I check that one daily. I was lucky enough to sell 5 ethereum in December that I bought years ago for like 100 a piece to pay for my wedding. That takes the stink off a lot, but good golly I think every other asset I own is red.

 

[aburks41]

I know the feeling. As hard as it is try not to look.

I check it maybe once a week just to see what's going on. I don't actively trade, I just set it and forget it. My entire portfolio only consists of 3 things: an S&P index fund, a blue chip growth mutual fund, and Microsoft