How are you investing your money? (Full Version)

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tychtyp -> How are you investing your money? (8/30/2008 8:54:37 PM)

I'm currently building up a portfolio of index funds.  My current holdings: Of equity, I have 45% in Vanguard's Total International Stock Market Index Fund and 55% in Vanguard's Total US Stock Market Index Fund.  My cash buffer is small--about $3,000. 

My investments are down quite a bit for this year, but, perversely, I want the markets to go down even more.  Most of my earning years are still ahead of me, so I hope to scoop up stocks cheaply.

How about you guys?



Termyn8or -> RE: How are you investing your money? (8/30/2008 9:34:19 PM)

It is not possible, using my specific knowledge to give any advice until and unless I know in what those funds are vested. I can say some general things, and luckily I have the time right now, well a little.

You invest in funds, yes you are going with the winners, but I say things are going to change, and these guys will be useless. First of all precious metals, and if you have the means to REALLY invest in them, do that instead of speculation. You could dump a hundred pounds of silver on the market all at once and get the current price, which you will have caused to drop (afterward). Yes I remember the Hunt brothers, but they went too far. They basically "fell off the edge".

If you want specific info for investment pruposes, you have to control it, going with a fund or whatever you call it is letting them do the gambling for you. If you really want to do your own betting, you need ALOT of info.

Precious metals except gold. The reasons I exclude gold are too complex to express right now. Get silver, platinum, palladium, whether it is futures or the real thing. That reason I can delve into, because I know things about the market.

They are literally dismantling everything in the US, and the reduced raw materials are being shipped to foreign countries to facilitate their selling finished goods back to the US. We all know that, but now I am going to tell you what I know. Here goes :

When those finished goods come to the US, they are plagued with a limited life ON PURPOSE. The natural materials, the metals and other substances they use in the manufacturing process are very difficult to recover. I am not bitching, sometimes that is the only way to build something, what I take exception to is that they make no spare parts available. While I know this is in their best interests, it is not in the best interest of humanity. Not in the least.

Any product, you send the scrap steel into it, no matter where it is produced, the original metals and anything valuable are much more difficult to recover. This creates a situation where my statement is true. Metal.

Also, if you are an investor and have anything going on overseas, you know the kind of trouble the dollar is in, so you should consider foreign currency. We ("we") have been thinking about taking some money up to Canada and opening a bank account there, and we are not even talking about that much money, maybe twenty or thirty grand.

I have just perved your profile, being in the US right now, real property is the best investment. It may be hard to decide which property to buy, but it looks like, say in a few months it is going to bottom out. You want to buy low and sell high, property is becoming the way to do it, it seems. It's like it is reaching an "anti-node". A term used in wave technology. I am riding the storm out, everything is paid off and I am glad not to have the money. Money is the worst thing to have.

If you want a small hedge, consider foreign currency as well.

Just some ideas, you asked.

T



popeye1250 -> RE: How are you investing your money? (8/31/2008 12:02:43 AM)

quote:

ORIGINAL: tychtyp

I'm currently building up a portfolio of index funds.  My current holdings: Of equity, I have 45% in Vanguard's Total International Stock Market Index Fund and 55% in Vanguard's Total US Stock Market Index Fund.  My cash buffer is small--about $3,000. 

My investments are down quite a bit for this year, but, perversely, I want the markets to go down even more.  Most of my earning years are still ahead of me, so I hope to scoop up stocks cheaply.

How about you guys?


Right now I'm in WEL and it's doing very nicely!
I made about a thousand on it in the last week or so.
It's a company called "Boots and Coots" that does oil rig work.
Another company that I like is NAT that has a very nice dividend but that is on it's yearly downslide , which is good because I'll pick it up again at 25-27.
It's high was 44 I think.
Other companies I like GHM, AFAM, CLF, HCKT.



Paulnz -> RE: How are you investing your money? (8/31/2008 1:37:07 AM)

Read " Common Stocks and Uncommon Profits " by Philip A. Fisher. It is still the best book on investing in stocks, which is the soundest way to make money from investing. When you get time, also read " The Intelligent Investor " by Benjamin Graham, and " One up on Wall Street: How to Use What You Already Know to Make Money in the Market " by Peter Lynch.

What I do:-

I don't invest in funds
I don't invest in any company I can't describe in 10 words or less
I don't invest in any company I can't reliably predict where they are going
I don't invest in any company where I don't know exactly who the CEO is or haven't met
I don't invest in any company with a head office that has a fountain in the foyer or a corporate jet
I don't invest in any company that is described as sexy
I don't invest in any company that has a history of failure, losses, capital raisings and any other nonsense.

Everything else is fair game.






gobsmack -> RE: How are you investing your money? (8/31/2008 4:26:49 AM)

I suck badly investing in individual stocks. I blew up a trading account a few years back and decided that I just don't have the time to do the research or the discipline for it.

So all I do now is max out my 401k every year and invest in mutual funds. I'm lazy, so I use the set it and forget it method. I don't even rebalance yearly, but I've got years till retirement so I'm not too worried. My current investments are down for the year too, and like you, I don't mind the markets going down more. About half my account is in cash right now and I'm dollar cost averaging in and waiting for the rebound.

My current allocation is about 35% foreign (Canada, Latin America, International Discovery) and 60% domestic with a slightly higher concentrations in natural gas and financial services.



OneMoreWaste -> RE: How are you investing your money? (8/31/2008 6:35:10 AM)

I don't consider anything to be an investment unless I can hold it in my hand. If all I've got are paper, pixels, or promises, it is, at best, gambling. So, I mostly hoard.
If you're taking a long-term view of the stock market, don't forget to consider the effects of all the Baby Boomers drawing their money out when they retire. Could be interesting.



DarkSteven -> RE: How are you investing your money? (8/31/2008 7:46:27 AM)

OP, step back.  I suggest you first think about what you need the money for, and when.

Start building up an emergency fund of 3-6 months income.  In something liquid such as money market.

Prepare for marriage and kids if you're still single.  Put money in CDs.

Are your index funds on a before or after tax basis?  If before taxes, they're earmarked as retirement funds.




tychtyp -> RE: How are you investing your money? (8/31/2008 10:05:55 AM)

No offense, Termyn8or, but you're using terminology from Elliot wave theory, a discredited technical mode of analysis.  Of all the market-timing newsletters with long track records, the Elliot Wave Theorist is one of the worst-performing.  I've also noticed that most of your analysis is based on short-term trends--how about telling me which assets to invest in before they're years-deep in raging bull markets?

Paulnz, if I were actively picking stocks, I'd use a similar strategy.  However, it's very, very difficult to beat the market.  Benjamin Graham warns that you have to be disciplined and business-like in order to be a true investor and not a speculator; spending a few hours a week researching stocks doesn't cut it.  He also emphasizes the importance of accounting knowledge; if you can't deeply and correctly analyze financial statements, you have no business picking stocks.

Have you calculated your IRR and compared your performance on a risk-adjusted basis?  If not, how do you know you're not underperforming the market?

OneMore, historically, gold has only doubled its value from 1910, while the stock market has returned hundreds of times its value.  (See this article.)  Most commodities haven't done much better.  Your investment strategy will only pay off if civilization collapses.  As for the Baby Boomers, they'll probably have to sell some of their assets to foreigners--hardly a cause of systemic collapse.

DarkSteven, thanks for the advice, but I'm already knowledgeable about investing.  I wasn't soliciting advice, but asking others for their strategies.

Here's a challenge to all of you: Make a strong argument as to why you shouldn't be invested in mostly index funds.



servantforuse -> RE: How are you investing your money? (8/31/2008 10:15:02 AM)

To 'onemorewaste'..I don't think that many baby boomers will take their money out of the market. I recently retired ( a year ago,age 55). I left mine in the market and living on the income generated. It is still a way to make money. Just find quality companies and don't get to nervous..



Thadius -> RE: How are you investing your money? (8/31/2008 10:28:03 AM)

I have been putting money into a couple of Vanguard funds for years, I also have a number of shares in various energy companies Exxon/Mobile being one of the heavier weighted stocks in my portfolio, been buying them since the lows of the 90's, the dividends are consistant and reinvested.  The last year was kind of rough for me financially, my own mistakes being the cause, so I am just getting back to the point of being able to save and invest again.

In terms of liquid capital, when I still had a decent ammount, I preferred using revolving 90 day cds, meaning 3 cds that matured on alternating months, just in case of an emergency, this way the cash was earning a decent rate, and wasn't completely locked up, I would always have access to at least a third of it in any given month.

Just some of the ways I have and do invest.



snappykappy -> RE: How are you investing your money? (8/31/2008 10:29:49 AM)

that is a good one to do with the revolving cd's



Thadius -> RE: How are you investing your money? (8/31/2008 10:51:42 AM)

The best part of the revolving cds is that you can continually add to them just as savings and as you reach certain thresholds (ammount invested) you qualify for higher rates.  It also allows you to shop around for the best rates.



Thunderbird56 -> RE: How are you investing your money? (8/31/2008 11:21:52 AM)

You all sound at least better than average educated about money matters. For the people I meet that are not and even most that are, I recomend they acquire a least a couple months worth of income of silver and gold. Priority on silver. Not certificates, not rare coins, the actual stuff. The reason being, if the economy does crash, you could take a wheelbarrow full of money to the grocery store to buy a loaf of bread and they might laugh at you.

In comparitive terms, you won't be any "richer" than anyone with equivilent dollars in US currency, but at least you'll eat. People will always trade for precious metals. There may come a day when they no longer trade for paper currency, or electronic transfers.

Am I an alarmist with a defeatist, bearish outlook on the US Economy? Pretty much so, yeah. I might argue the "alarmist" part a little, but with the Federal Reserve (Which has no reserves and is not Federal) running the presses full speed 24/7 trying to keep up, the dollar having dropped like a rock, oil and gas prices, the national debt and deficit spending, the housing market ... need I go on?

The idiots in D.C. will continue to try and artificially prop up the economy for as long as they can but they are doing nothing to actively fix the problems. The first thing they should do is slash taxes and then slash their spending. I mean slash! I know, that would hurt, big time! But at least it would be a positive step towards solving our long term problems and not just another joker added to the house of cards they are building. Sorry, I know this flew off topic a bit. So endeth my first CM forum post.
Scott





NeedToUseYou -> RE: How are you investing your money? (8/31/2008 11:40:43 AM)

I'd dump it in any of the mega large beaten down bank stocks, that have shown a profit all the way through the current mess. If they have made it this far and managed to maintain profitability then they've made it either through the bottom of the housing crisis, or will survive the bottom. My personal pick right now would be BAC, though I think you've missed the bottom, though if some another meltdown occurs in another bank, or at Fannie or Freddie, it may temporary reach back down. BAC isn't going anywhere, no one is speculating that it will go belly up. The only debate with BAC is will they need to cut the dividend(short term cut). So, it's as safe of a risky stock as you can get, and there is a very high probability that it will touch 60 or higher in a recovered housing market. As they've acquired countrywide, which is a liability now, but an asset in better times. They are large enough to absorb countrywide and more if it was necessary.

In my opinion BAC will double from todays price in leass than 3 years.

I'm not an analyst, just looking at which banks have the most influence on the FED, which have maintained profit, and have room to wiggle(can cut dividend at anytime they want) to this point. Essentially there is a 99.999999% BAC will survive this, and be an even bigger player in the aftermath.







Thadius -> RE: How are you investing your money? (8/31/2008 11:46:47 AM)

IF the economy completely crashed, I assume that the actual best currency would be the same as before there was an economy.  BARTER.

Just sayin,
Thadius



OneMoreWaste -> RE: How are you investing your money? (8/31/2008 11:49:30 AM)

quote:

ORIGINAL: servantforuse
To 'onemorewaste'..I don't think that many baby boomers will take their money out of the market. I recently retired ( a year ago,age 55). I left mine in the market and living on the income generated. It is still a way to make money. Just find quality companies and don't get to nervous..


Sounds like you're much better off than most, then. Being at the head of the wave, you probably don't have that much to worry about.

I heard from the news that after Exxon-Mobil reported record-breaking profits once again, their stock value actually fell because they didn't meet targets. I'm not staking my future on anything that behaves that way.

Let's take another popular company from the index funds- General Motors. In the last quarter, they "lost" $15.5B. Assuming they had revenues of $0, that's a loss of $58,270 per employee in three months. I'm going to "invest" in that?

The DJIA remained more or less flat from the late 50's to the early 80's. Now the baby boomers were pushing middle age, just as the private pension funds that their parents had depended on were being stripped and/or shut down. The stock market became "sexy", and Joe Sixpack started dumping in money. In 20 years, it went up by a factor of 10. That's a big bubble. Did the companies add that much value? Most of the actual "industries" have shed jobs, divisions, and business lines, moving much of what remained overseas. So what does that share of stock, that "investment" actually represent?

May as well invest in a hand of blackjack... at least then you can see the cards, and don't have to take the dealer's word when he says you've just lost.

And I don't mess with gold... too much emotion and history compared to practical value.



Thadius -> RE: How are you investing your money? (8/31/2008 11:53:05 AM)

The stock price may have dropped a bit for Exxon/Mobile, however the dividend being paid went up. They pay out a huge amount of profits back to their shareholders, and as one I use that money to buy more stocks, so the drop in price actually doesn't hurt me one bit.

Just sayin.



tychtyp -> RE: How are you investing your money? (8/31/2008 12:12:53 PM)

OneMoreWaste, you seem to have a rather simplistic understanding of stocks.  All stocks behave as XOM did--when a stock fails to achieve expectations, its price goes down, regardless of whether the company posted record profits or not, because a stock's current price already reflects its expected future earnings.  Same with Ford.  Idiots aren't buying F; right now mostly institutions are trading the stock.  If you think you can predict how F will do with greater accuracy than the brilliant investors who devote their working lives to the endeavor, why don't you borrow money to the hilt and invest with it?

Index funds actually outperform the vast majority of individual investors and actively managed mutual funds on a risk-adjusted basis.  I don't see how you can beat that, for virtually no effort on your part.



LookieNoNookie -> RE: How are you investing your money? (8/31/2008 1:35:45 PM)


Every time I have any spare cash, I put it in real estate.

Always have...always will.



meatcleaver -> RE: How are you investing your money? (8/31/2008 1:38:31 PM)

Buying apartments in Berlin, they are incredibly cheap and forecast to increase value at 15% per year despite the credit crunch.



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