Investing and finance thread

[gregf]

greg: Two thoughts, for what they're worth (which IMO is probably not much):

(1) cryptocurrency - I can't imagine owning something that only exists theoretically, which I can't hold in my hand, and which only 10 people in the world can explain correctly.  In addition to that thought, there is this:

(2) Eventually, the scum in Washington known collectively as politicians will come to you younger people (probably after I'm long gone) with the bright idea to get stop using paper money and replace it with some form of electronic accounts.  Don't buy into it, now matter WHO stands behind that idea.  How much "money" will you have - and how can you spend it - if the power goes out?

Bob

Bob. A long time ago, I was told to invest in what we see. Gas in our cars, coke on the shelf.  The dot.com collapse couldn't be seen in some cases.  What was tge company selling?    Now software we use daily, computer chips, phones in our hand, it's part of our world.
     Buy crypto has no practical use at all in my view. Funny thing, gold has little practical use either, but at least it's tangible and not in the clouds.  Anyhow,  I'd treat crypto like gambling. Invest with what you can afford to loose,  maybe 1% or so.

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[DaveBrown74]

My two cents:

I think this is a tricky time. On the one hand, stuff has sold off immensely already, especially tech. On the other, we are coming out of a truly unprecedented environment of euphoria/mania during which there were record amounts of government spending/stimulus, QE, and zero rates. That caused a speculative frenzy the likes of which we have not seen in a very long time. All of that is now being removed (or has already) in rather abrupt fashion, so clearly markets are going to react. Meanwhile, recession clouds are forming. There is plenty to worry about right now, but obviously markets have already reacted considerably. Who is to say where the bottom will be though? I am sure there are stocks that are great deals right now, but when I read WSJ articles the consensus seems to be that tech stocks on the whole are not cheap yet. In fact, many feel they are still "expensive", which amazes me given the rout that has taken place.

Personally, I am holding fire here. I did manage to lighten up some of my holdings late last year and a little bit more in the first quarter, but obviously in hindsight I wish I had done more. I am between 1/2 and 2/3 invested at this point (in terms of my total stock investing capacity), and I'm ok with that. Obviously the last month has not been fun, but my time horizon is pretty long term so I am not beating myself up too much. With that said, I don't feel in any hurry to add right now. I thought inflation would have begun to calm down by now, and so far it hasn't. Meanwhile I can't say with confidence that we won't have a bad recession in this country.

My preference in times like this is to not try to be a hero and "pick the bottom" but rather to wait until things stabilize and consider adding when the outlook is a little more certain. And if stuff just goes straight up from here, I feel like I have enough in the portfolio where I won't feel like I'm missing out. I'm just in wait and see mode. I think there is way too much certainty to be heavily invested right now.

[Jolly Blue Giant]

Heard on the radio yesterday that the market has shed an estimated 17 trillion since the beginning of the year. That's a hard lick no matter who has money in there from the little guy to the huge financial institutions. Today was a bounce back day and hopefully is the beginning of market recovery

[todge]

Bob, ( or any others)what's your take on the 4% rule of withdrawing your money?  He's my scenario.  During the pandemic, we had 3 coworkers about 50 all die within one month. A good friend of mine, 50 at the time, up and quit at this point. He and his wife pooled all their money and a plan to draw 7% indefinitely if the past returns continue.
      My plan is to budget 50% retirement with my pension and to draw 5 to 6% from 401k for the rest.  More money comes in when I can collect social security.  Also, if my returns do poorly. I dont anticipate spending  lavishly when I'm 75.   
      Anybody else have advice on withdrawal rate?


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Financial Advisor here 30 years of experience.

The 4% withdrawal rate is based on living until age 95 with 2% inflation and 5% growth rate. I

[gregf]

Todge, thanks for your reply.   It truly lines up with advice and research I have done. The  sessions I had chatting with a reputable advisor were extremely helpful to me as well.
     As I mentioned before, if I run down some of my principle from 55 to 80 years of age, I'm ok with that choice to pair back spending if need be.  Hopefully I can leave my full principle to my children.  However, my view is to enjoy as many days of sunrise as the good Lord allows.

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[DaveBrown74]

Good quick WSJ article on what Berkshire Hathaway is up to. I always like to know what the big man is thinking during tricky times:


https://www.wsj.com/articles/warren-buffett-spends-big-as-stock-market-sells-off-11652589031?mod=hp_lead_pos5

[MightyGiants]

Good quick WSJ article on what Berkshire Hathaway is up to. I always like to know what the big man is thinking during tricky times:


https://www.wsj.com/articles/warren-buffett-spends-big-as-stock-market-sells-off-11652589031?mod=hp_lead_pos5

It's behind a paywall, so what is WB up to?


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[LennG]

 Hey Ted

I'm 76, should I be squirreling or spending   

[DaveBrown74]

It's behind a paywall, so what is WB up to?


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My apologies. I should have thought of that.

They have been aggressively buying stocks in recent weeks, after coming out of 2021 with large cash balances. In particular they seem focused on energy stocks, having bought Chevron and Occidental Petroleum. Seems they like these stocks as they act as inflation hedges and also typically pay nice dividends. They have also added financial stocks, which also pay decent dividends and seem to have attractive valuations.

The article talks about how one of Buffett's long term mantras is to "be greedy when others are being fearful and be fearful when others are being greedy."

While I was not going to copy and paste the article for obvious reasons, here is a segment that captures the essence:


Energy stocks also offer two characteristics that Mr. Buffett has traditionally gravitated toward: low valuations, as well as shareholder returns in the form of buybacks and dividends, said Jim Shanahan, senior equity research analyst at Edward Jones.

Dividend-paying stocks have outperformed the S&P 500 this year, in part as investors whipsawed by market volatility have sought out stocks that can offer steady cash returns.

[todge]

Hey Ted

I'm 76, should I be squirreling or spending   

Lol - I don

[LennG]

Lol - I don

[MightyGiants]

My apologies. I should have thought of that.

They have been aggressively buying stocks in recent weeks, after coming out of 2021 with large cash balances. In particular they seem focused on energy stocks, having bought Chevron and Occidental Petroleum. Seems they like these stocks as they act as inflation hedges and also typically pay nice dividends. They have also added financial stocks, which also pay decent dividends and seem to have attractive valuations.

The article talks about how one of Buffett's long term mantras is to "be greedy when others are being fearful and be fearful when others are being greedy."

While I was not going to copy and paste the article for obvious reasons, here is a segment that captures the essence:


Energy stocks also offer two characteristics that Mr. Buffett has traditionally gravitated toward: low valuations, as well as shareholder returns in the form of buybacks and dividends, said Jim Shanahan, senior equity research analyst at Edward Jones.

Dividend-paying stocks have outperformed the S&P 500 this year, in part as investors whipsawed by market volatility have sought out stocks that can offer steady cash returns.

[Bob In PA]

They make mistakes just like everyone else.  Also, Berkshire-Hathaway really got burned on the Wells Fargo fiasco and have no unloaded the last of their holdings.  Bob

[gregf]

Thanks,

I have some Chevron, I love dividend paying stocks, and I just bought a bank ETF.  So I guess I might be going in the right direction

It's hard to judge long term return with dividends I want to say phillips 66 does about 4% a year.  I only keep about 10% in my company stock P66.  Excepting this last year, my biggest investment fund VPMAX far outpaces my oil stock return when dividends are added.  I usually jusmdge investments based on 5 year return total.

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[MightyGiants]

what do people think of Catherine Woods and the funds she manages?