Investing / Investment Management

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  • doggydoggdog

    I have approx. $40k invested in stocks and it's not doing great, I'm still down from 2020 a few $k.

    I have another $100k total in life savings in my bank account.

    Someone from Merrill Lynch called me and is pitching me to invest with them under their managed accounts, which costs a <1% fee.

    Is this a smart?

    I could save 6 months of savings from the $100k and give the manager the rest?

    He said I could have made 15% last year if I did it and next year could be the same.

  • grafician-4
  • grafician-4

    I posted there a lot of stock "tips" monospaced got rich betting against me

    I also posted those for traders and not actual investing advice blah blah

  • shapesalad-2

    Just buy Bitcoin.

  • Taschen0

    You're losing over 1k a month with inflation.

    • What do you mean?doggydoggdog
    • end of thread right theregrafician
    • The dollar is getting weaker with overprinting and inflation, less buying powerTaschen
    • At least buy gold to hedge itTaschen
  • monNom1

    If it's a 1% fee fund, it's probably tracking an index like the S&P 500 or the Russel 2000. Both of which you can purchase as a low-cost ETF like Vanguard's VOO (S&P), VTWO (Russel). Those have management expenses of 0.03%.

    Losing money over a couple of years is the norm with stocks. You expect to earn average returns over 20-30years, but that line wiggles up and down the whole way there.

    Don't sink all your cash into the stock market. 60% equities, 40% bonds is the usual recommendation. You look at your portfolio, say once a year, and sell stocks or bonds to rebalance to that 60/40 split. This locks in gains from good years, but leaves cash to buy stocks when they are cheap.

    Also consider what else you can invest that money in to earn a better return than the market. A house has been a pretty darn good investment these last few years. Automation like a CNC router for carving signs or Etsy furniture/decor might supplement your income. Replacing old equipment now might be wise given how prices are rising. Stock up on ramen noodles for the coming apocalypse.

  • Taschen-1

    That 100k in savings will be like 10k in 30 years.

    • Yep. @8% inflation: 50K in 9years, 25K in 18 years, 12.5k in 27 years. $9.9k in 30years. Divide inflation by 72 to get doubling/halving time.monNom
    • I wouldn’t say thatmonospaced
  • doggydoggdog2

    What do I put my money into to counteract inflation?

    • ha, that's the big question. diversifyTaschen
    • also, don't get financial advice from a design forumTaschen
    • +1. Or from your bank.monNom
    • Landcannonball1978
    • Consumer staples. People need to eat, need healthcare, etc.formed
    • Don't take anyone's advice here... Hard assets is my answer. What can you buy today that you can sell to a rich person in 10 years?DRIFTMONKEY
    • gas and toilet paperKrassy
    • Bitcoin. Simple.shapesalad
  • Beeswax2

    This is risky year to invest heavily in stocks or index.
    I'd divide among ETF Gold, Cash and some dividend paying funds/stocks.
    For crypto I'd say wait. Things a not looking great atm. But if there's a dip below 30k in BTC you can start accumulating some strong Alts and BTC.

    • Agree on all that but btc. Those can go down a TON more.formed
  • nb1

    Beware of solicitations from Merrill Lynch

    • Are they shady?doggydoggdog
    • Desperate?doggydoggdog
    • They’ve been known to fuck with people. Plenty of charges by the SEC. ML was guilty.nb
    • Go with Vanguardnb
  • formed2

    You could have made significantly more w VOO last year with virtually no expense.

    Stay away from sales calls, etc. Vanguard's funds are solid and super low cost.

    Wait until fall to think about buying much. We'll be going sideways/down for the foreseeable future (this was a bear rally).

    People aren't really scared yet. Nervous, but not scared. Once the blood starts flowing and people start panicking, that's when the deals will be found and a bottom, eventually, will be formed. We are a long way from that.

    Think DOW below 30k. I wouldn't be surprised to see BTC it 10k. When people need money to cover the mortgages they can't afford, that'll be the first to go and it'll plummet fast.

    Consumer staples, oil/commodities for a few more months, healthcare, are good. I bought RGLD, CAT and CVX a few months ago. They've all skyrocketed. Sold a bunch of tech back then, too, and will buy again when things really go down.

    Have that cash ready and price points picked. DCA in.

    • Seems like everyone's waiting on the sidelines now.Taschen
    • What do you read to stay ahead of the curve?nb
    • Plan and be patient. I have a bunch of GTC orders (Good Till Cancelled) for price points, super low. Some will hit, some not.formed
    • Pick your fav stocks and buy on big dips. MSFT went to 272 recently. It was at 342 in Feb. I added.formed
    • TSLA was at 766 3 weeks ago, it was at 1100 a week or so ago.formed
    • I bought CVX at 125-ish in Feb, it's at 169 now.formed
    • They'll all go down from this recent rally.formed
    • Diversity is key. Patience and not trying to time the market is key. DCA (dollar cost average) into your positions. Buy on dips. Sit back and wait.formed
  • inteliboy0

    Anchor protocol

  • monNom1

    Something to be aware of is how the bond market affects the stock market. Bonds are a much larger market then stocks and movements in bonds will move the stock market around like a dog wagging its tail.

    We have been in a lowering interest rate environment for almost 40 years, and we also had low to moderate inflation for most of that time. That environment has skewed the type of businesses that have been successful to those that thrive on cheap debt.

    We might assume the successful businesses have been successful because of their innovation or their management or products. But without the environmental backdrop, they don't work anymore. A shark might rule the ocean, but take away the water and it's just a rotting corpse.

    Tech is the most critical example, as it is particularly sensitive to interest rates. If we look at the market-cap weighted indices like the S&P 500, we see that the most successful companies in this environment have been the tech companies. 8 of the top 10 holdings in the S&P 500 are tech companies. All of the top 6 are tech. Tech accounts for 28% of the entire index. More than twice the next sector (health care).

    And the rate environment is changing.

    US official inflation is 7.9% now and some goods are more than double that. IE: Houses +19% in a year. Interest rates will be rising, and possibly rising fast to temper inflation. And that change in bond rates will tend to filter the types of companies that can be successful in the new environment. In a high rate environment, sectors like tech aren't likely to fair well. Any company who's stock price has been supported by debt-financed buy-backs is going to be underperforming vs past years as well. -- What's that you say? that's everything that has been driving the S&P over the past few years? Right... Expect carnage.

    • So, what would your suggestion be? With $40k in S&P500 and $100k cash? Just hypotheticallyhardhat
    • Banks will do well w higher rates. Look at BRK-B (Buffett) for nice diversification in one company. He's been killing it (again).formed
    • I'm not really sold on the idea of tech will get effected by interest rates. Which one of the FAAMG has debt? They are all cash cows. On top of that tech hasBeeswax
    • a lot better EBIT than traditional sectors. I hear others sharing your view but I dont understand. Sure FB, GOOG ad revenues can get slashed but in an envirnmntBeeswax
    • where every company is suffering they will still be on top of the market.Beeswax
    • I’m sure there are other factors, but tech in particular has long time horizons for profitability. There’s billions invested in infrastructure with no revenuemonNom
    • On the assumption that if you can build the platform and user base over many years, that makes it very difficult for competitors to challenge you.monNom
    • When inflation is 2% it takes 35 years to lose half your purchasing power. At 8% it is 9 years. That would tend to steer money towards more immediate profits.monNom
    • Rather than the ‘get big fast, then figure out how to make money’ approach we see in tech these past years.monNom
    • @hardhat. That’s a very good question. Passive investment in index funds has been a very successful, zero mental effort approach these past years.monNom
    • What I’m suggesting is that era might be coming to an end. Stocks may be a poor investment for the next decade, like they had been at times prior to the 80s.monNom
    • Or it could be that a different kind of business will do well. You might look at history in North America with similar inflation.monNom
    • Or you might look at other countries that live with higher inflation. What companies are succeeding there? Can you understand why and transfer that to US cos?monNom
    • *edit that should be higher inflation and/or higher interest rates.monNom
    • The thing is, cheap debt has propped up everything. The amount of credit-card debt available is directly related to the spread between bonds and card rates.monNom
    • Narrow that spread and less people can access credit, which hamstrings spending, harming consumer goods companies already having a hard time passing on costsmonNom
    • Supply/commodity/lab... shortages have made autos more expensive. Get rid of cheap financing and expect sales to plummet. Really everywhere you look is carnagemonNom
    • Here’s some more technical discussion and opinion about tech/debt dynamics.
      https://www.bloomber…
      monNom
    • I don’t fully understand it, but seems that it is outside investors taking debt to buy equity that makes tech sensitive. Like tech is a long duration bond.monNom
    • The debt cycle continues. Debt cycle - a production of federal banking systems. We are fucked until we adopt bitcoin as the reserve currency.shapesalad
    • Bitcoin doesn’t get rid of the concept of debt. It just makes it much more difficult to repay as bitcoin is deflationary by nature. Not great for progress, IMO.monNom
    • Bitcoin is worse. People are buying pure speculation. It'll go to zero faster than anything if there's a real crash.formed
    • What remains to be seen is how much of this inflation is "transitory". If it goes down substantively as the supply chain issues resolve, things willformed
    • rocket back up. If it doesn't, who knows.formed
  • imbecile2

    become a member of congress

  • doggydoggdog0

    What about I Bonds?

    • Ask yourself - what is a bond? How is its value determined, is its yield higher than current inflation etc etcshapesalad
    • Premium bonds - yes! Get some USDC on polygon network and put it in https://pooltogether…shapesalad
    • The risk with I Bonds is that official inflation is understated vs real inflation. Headline inflation=8.5%. But Gas+48%, Fuel oil+70%, Food at home+10%monNom
    • And then housing is supposedly up only 5% from last year, but anybody buying a house right now knows that number is off.monNom
    • Case Shiller says +30% over the past 2 years.
      https://fred.stlouis…
      monNom
    • ibonds paying 7.12% right now. So you are basically buying a guaranteed, but not total loss. And I don't believe they have the upside potential.monNom
    • IE if you could buy a 10year treasury at 7.12%, you're paying $0.50 on the dollar, and you could sell that for more if rates/inflation goes down...monNom
    • ...of course 10year treasuries currently pay 2.72%, so that strategy isn't going to work out so well.monNom