The Rokslide Stock Traders Thread

[bowhiker88]

Far far from an expert but with 25 years left, I would buy long term blue chip stocks and not look back.

It is pretty hard to not take 5.3% with near 0 risk though.

I dont think interest rates are coming down in the near future.

Yup. You buy in the money LEAPS on winners in their respective industries, these businesses are usually well known, when the stock/market has a pull back. I'd avoid anything in financial/banking sector or energy, unless energy is your specialty. Buy stock as well. Buy what you know and a lot of times what you see around you.

 

[Johnny Tyndall]

Alright guys….


Just pulled my 401k from a previous employer and rolling into a IRA. The check just arrived. I need to forward to my retirement guy and let him manage.

What does your crystal ball say? Is the trump trial impacting the market short term? If he’s acquitted do the anti-trumpers freak out and the market drops? If he’s found guilty do the pro-trumpers freak out and the market drops?

Or does it have no impact and the last few days of drop are because people are nervous about the new interest rate meeting in early June?

Do I invest immediately, and get back in?

Do I wait to see what the market does with the trump trial?

Do I dump it into t bills at 5.3% for the next 3 or 6 months and get back in after the November election?

I don’t need the money for 25 years, it’s a fairly sizable amount. I know there’s never a bad time to get into the market if you’re in for the long haul.

If market timing were easy, everyone would do it. More a question of how you feel about gambling. Me, I'd immediately lump sum it into my standing asset allocation. If the thought of it dropping right away bothers you, you could split the difference and piece it in over 6 months.

 

[Beendare]

Alright guys….


Just pulled my 401k from a previous employer and rolling into a IRA. The check just arrived. I need to forward to my retirement guy and let him manage.

What does your crystal ball say? Is the trump trial impacting the market short term? If he’s acquitted do the anti-trumpers freak out and the market drops? If he’s found guilty do the pro-trumpers freak out and the market drops?

Or does it have no impact and the last few days of drop are because people are nervous about the new interest rate meeting in early June?

Do I invest immediately, and get back in?

Do I wait to see what the market does with the trump trial?

Do I dump it into t bills at 5.3% for the next 3 or 6 months and get back in after the November election?

I don’t need the money for 25 years, it’s a fairly sizable amount. I know there’s never a bad time to get into the market if you’re in for the long haul.

Strict rules on transferring those accounts…make sure you follow them or you will incur tax and penalties.

Your time frame matters. 5 years or 20- it matters.

It never hurts to ‘Dollar Cost Avg’ into the market vs plopping it in there all at once….but with a longer time horizon its less of an issue. Maybe invest it into the market in 20-25% increments over a year or two with the rest in 5% plus treasury based money markets.

Managing risk is key;
1) DCA spreads out your risk
2) a long time frame decreases your risk exposure.

A guy can create a pretty darn good portfolio with just 3-5 ETFs. That equates to thousands of individual companies.

I have my young adult kids in 4 ETFs; mid cap, tech VGT, S&P index and Nasdaq index- no bonds.
They Buy and hold- just keep adding to those DCA in every month. They are in their 20’s, so long investing time horizon.

( backtest this portfolio- its avgs almost 20% over the last 10 years- better than the investment advisors)

Worth noting; The tech sector has stabilized, continues to outperform and as long as you are spread out in an ETF- long term its low risk. If I was a young guy, I would have 1/3rd or more in tech ETFs.

My son likes to play around with meme stocks and options- but its only $3-$5k. Worst thing that happened was he did really good on his first couple…he has taken it on the chin a little since and realizes that internet hype is not legit research.

The old line that a percentage of your $$ needs to be in bonds has cost a lot of people a lot of $$$- negative returns in the last 5 years.

There are guys making money trading options- a couple here it seems….but its a skillset and discipline many don’t have and can take years to acquire…Plus thats earning money…not investing.

Nobody has a crystal ball. The market is pretty extended…but it tends to do that. DCA solves that.

 

[BBob]

It never hurts to dollar cost avg into the market vs plopping it in there all at once….

I'm into that plan. Buy short term treasuries and phase back into the market. Todays auction for 3mo I think was 5.37ish%. I'm holding a fair amount and I can cycle that $$$ in or out as things go by.

 

[Marshfly]

Alright guys….


Just pulled my 401k from a previous employer and rolling into a IRA. The check just arrived. I need to forward to my retirement guy and let him manage.

What does your crystal ball say? Is the trump trial impacting the market short term? If he’s acquitted do the anti-trumpers freak out and the market drops? If he’s found guilty do the pro-trumpers freak out and the market drops?

Or does it have no impact and the last few days of drop are because people are nervous about the new interest rate meeting in early June?

Do I invest immediately, and get back in?

Do I wait to see what the market does with the trump trial?

Do I dump it into t bills at 5.3% for the next 3 or 6 months and get back in after the November election?

I don’t need the money for 25 years, it’s a fairly sizable amount. I know there’s never a bad time to get into the market if you’re in for the long haul.

If you can't make a decision then build a T-Bill ladder that will take 6-12 months to finish. Put 1/6 or 1/12 in your equity mix now, do the rest each month as the ladder works it's way through. Best of both if you are indecisive.

But if you have a "retirement guy" why are you making these decisions? That's what you pay him for. If you are capable of making these decisions (you are. it's not that hard.) then skip the fee for the guy and DIY.

 

[Paradox]

First off get rid of your “retirement guy” and eliminate 1% cost to you on top of what you will pay in fund fees. There is nothing he can do that you can not do!
Next I would trickle that money into the market. Invest in 1,3,6 month t bills and invest it when they come due. There is a lot of info here on everyone’s favorite ETF. Pick one you like and let it ride.

 

[Ucsdryder]

First off get rid of your “retirement guy” and eliminate 1% cost to you on top of what you will pay in fund fees. There is nothing he can do that you can not do!
Next I would trickle that money into the market. Invest in 1,3,6 month t bills and invest it when they come due. There is a lot of info here on everyone’s favorite ETF. Pick one you like and let it ride.

I’m pretty damn good at what I do. I want someone good at what they do to manage my money. Could I do it…absolutely. Do I want to do it…nope!

 

[CorbLand]

I’m pretty damn good at what I do.

Wait, you figured out how to make money shit talking on the slide all day?

 

[Ucsdryder]

Wait, you figured out how to make money shit talking on the slide all day?

Hahaha that’s a side gig. It’s unpaid, but it’s fulfilling so I continue to do it for free. Someone’s gotta keep the clicks coming! And since I can’t draw a tag to save my life expect me to put in some overtime this fall.

 

[Marshfly]

I’m pretty damn good at what I do. I want someone good at what they do to manage my money. Could I do it…absolutely. Do I want to do it…nope!

That's just it, they aren't good at what they do. They managed to convince millions of Americans that 6-8% returns are great and that is marginal. They managed to convince people that "nobody can beat the market" so you can't either but you pay them 1% for the privilege of underperforming SPY. They managed to convince people that holding on to losers without a stop loss point is the only way to go and it's not. It's terrible, terrible advice. They are salespeople and that's it.

 

[go_deep]

Wait, you figured out how to make money shit talking on the slide all day?

He's an apprentice in training for that still...

 

[go_deep]

That's just it, they aren't good at what they do. They managed to convince millions of Americans that 6-8% returns are great and that is marginal. They managed to convince people that "nobody can beat the market" so you can't either but you pay them 1% for the privilege of underperforming SPY. They managed to convince people that holding on to losers without a stop loss point is the only way to go and it's not. It's terrible, terrible advice.

People need to due their research and interview these people, their your employee.
We've had tremendous success with our retirement advisor, we have a long term average just under 13%. To me, that's the difference, I can make 6-8%, but I can't get 13% without making that my life, and while I want to know what and where my investments are, I don't want it to be a part-time job that consumers all my free time.

A retirement advisor brags about sub 10% returns long term, run.

 

[Marshfly]

People need to due their research and interview these people, their your employee.
We've had tremendous success with our retirement advisor, we have a long term average just under 13%. To me, that's the difference, I can make 6-8%, but I can't get 13% without making that my life, and while I want to know what and where my investments are, I don't want it to be a part-time job that consumers all my free time.

A retirement advisor brags about sub 10% returns long term, run.

If 13% makes you happy then you are in the right place. 1% a month long term should be the minimum we should expect from a professional IMHO. The MINIMUM.

That said I bailed on long term accounts when I learned to actively trade. I am confident in my results and see no reason to hold stuff long term anymore. This is "full time" for me but that full time is pretty much retired time to be honest. I work maybe 4 hours a week on trading. It did take a ton of work to get here though. The guys I know that are hitting 2-3% a month on the side of their full time job spent a good year or two figuring that out but after that it becomes a 10 minute a night thing, if that.

 

[Beendare]

I’m pretty damn good at what I do. I want someone good at what they do to manage my money. Could I do it…absolutely. Do I want to do it…nope!

Sadly, many of these financial planners are just sales guys. They just plunk your money in broad market stuff with a % in bond funds....the same old portfolio models that have been around for decades.

Many do know tax implications- which is a big plus...but investment wise most just use the same indexes you can- or better. Many tell you to put a % in bond funds to "Diversify"- losing money is a bad way to diversify.

There are a few around that are smarter than the avg bear- guys like Ken Griffin of Citadel...but few people have the $20m it takes for them to manage your money.

My wife has a teacher friend whose husband is a financial planner. In fact, he sends out a newsletter...and it's a joke of a cut and paste and not even copied from quality outfits like Morningstar.

He does as above with the percentage models- in fact, a retired neighbor used him and lost a shit ton of $$$$$ in bond funds.

The funny part is he thought the RE market was going to drop like a rock and sold his home near us 6 years ago and rented while waiting for the market to collapse. His home more than doubled in the time he was out of the market.

 

[bowhiker88]

Being a stock picker isn’t as easy as people think and most are not suited to manage their own money despite their confidence from a few good picks in a bull market. If it was so easy to manage money at scale, using a real bottoms up fundamental approach, then anyone not doing it would be a fool. It’s moments like March 2020 when the markets get halted 4 days in a row and the only thing people want is cash, when you better have the stomach and knowledge/confidence in what you own (this is achieved by hours and hours of research and modeling) to make a decision about each position and determine if the thesis is broken or if you should add more. The reason most people can’t make money long term and you hear those stats about 5-10% of investors beating the market, is because people get emotional and sell on the way down or at the bottom and buy on the way up. For anyone who thinks it’s not challenging to pick stocks and manage a portfolio I’d love to know what your concentrated in and your thesis.

 

[cowdisciple]

For anyone who thinks it’s not challenging to pick stocks and manage a portfolio I’d love to know what your concentrated in and your thesis.

The thesis is easy - it's the discipline to maintain it over decades that's harder. Pick an asset allocation, keep it simple and in low fee/no fee indexes. I was all stocks for a long time due to not wanting to own near-zero yielding bonds. 60% US total market, 40% international total market. In the current environment I'm holding 20% bonds.

Save, save, save, save. Your savings rate is the thing you can control. The higher the better. 50% plus and you can be work optional in 10-12 years.

Simplify. Get everything you can into one place where you can manage it. Roll any 401ks that you can to IRAs - fees are the enemy. HSAs are even worse in that regard.

Capital loss harvest when the opportunity is there if you want to get "fancy". There's maybe opportunity to do slightly better around the fringes if you enjoy it and are up for the work, but this is the core strategy. Honestly the withdrawal strategies are a lot more complex than the accumulation.

 

[bowhiker88]

The thesis is easy - it's the discipline to maintain it over decades that's harder. Pick an asset allocation, keep it simple and in low fee/no fee indexes. I was all stocks for a long time due to not wanting to own near-zero yielding bonds. 60% US total market, 40% international total market. In the current environment I'm holding 20% bonds.

Save, save, save, save. Your savings rate is the thing you can control. The higher the better. 50% plus and you can be work optional in 10-12 years.

Simplify. Get everything you can into one place where you can manage it. Roll any 401ks that you can to IRAs - fees are the enemy. HSAs are even worse in that regard.

Capital loss harvest when the opportunity is there if you want to get "fancy". There's maybe opportunity to do slightly better around the fringes if you enjoy it and are up for the work, but this is the core strategy. Honestly the withdrawal strategies are a lot more complex than the accumulation.

That’s is not what thesis refers to at the security selection level. I was referring to people assuming they can pick stocks successfully over the long term. By thesis, I meant the reason why someone is allocating portions of their capital to individual stocks, clear reason why the stock is an opportunity, and why it is underappreciated by the market. I’m very curious to know what some individuals think they know about a business that analysts who spend hours researching don’t know. If someone thinks they’re gonna pick stocks over the long term and beat the market, they better understand how stocks work and that you need to have a non-consensus view of forward earnings or cash flow.

At the asset allocation level which you referred to as being easy, I still think playing the factor game via etfs is not easy and while it removes security selection risk you continue to have the element of human behavior that ruins long term gains. Also what is your 60% US total market allocation referring to? Yeah bonds are nice in certain situations but I am highly confident any US total market security combined with bonds is unlikely to net a 13% return year after year.

 

[cowdisciple]

Yes, I don't pick individual stocks because I don't think it's a game I'm going to win (on average, long term, versus total market performance, after considering transactional costs and churn related tax drag). I also don't think that 13% return is a realistic long term expectation, even in a high interest rate environment that juices nominal returns without considering inflation. I'm at about 11% life to date and my planning number is considerably less.

60% US total market - a total market index (VTI, FZROX), or make a synthetic one with 75% S&P and 25% extended market. I go back and forth if I'm tax loss harvesting.

I guess my main point was that if you have a high savings rate and invest it in a way that doesn't totally suck, you're like 90-95% of the way there.

Bonds have their purpose, especially if stocks are looking pretty stretched and bonds are paying 5-5.5%. If the market drops 10%+ I'll probably be back at all stocks. That's about all the market timing I care to do - still probably not adding any value, but not likely to hurt much either. I do plan to be at about 60% bonds when I pull the retirement trigger, then gradually walk it back to 80-100% stocks. Sequence of returns risk at retirement is the real portfolio killer.

 

[2531usmc]

Bowhiker says above “I was referring to people assuming they can pick stocks successfully over the long term.”

He also says “ If someone thinks they’re gonna pick stocks over the long term and beat the market,they better understand how stocks work “

I think there was a time when people picked stocks and some people did it successfully and some people did it unsuccessfully. But it was still people making human decisions.

But I suspect an individual picking stocks now is competing against professionals backed up with supercomputers running AI with Phd mathematicians writing the algorithms. No matter how smart individual investors may be, they are playing against a stacked deck. Over the long term, individuals cannot compete against the pro’s

 

[Marshfly]

Bowhiker says above “I was referring to people assuming they can pick stocks successfully over the long term.”

He also says “ If someone thinks they’re gonna pick stocks over the long term and beat the market,they better understand how stocks work “

I think there was a time when people picked stocks and some people did it successfully and some people did it unsuccessfully. But it was still people making human decisions.

But I suspect an individual picking stocks now is competing against professionals backed up with supercomputers running AI with Phd mathematicians writing the algorithms. No matter how smart individual investors may be, they are playing against a stacked deck. Over the long term, individuals cannot compete against the pro’s

You are confusing active trading designed to generate income and building a portfolio of assets designed to generate growth in the value of those assets. Algo traders are not buying stocks to hold. You are not competing with them. In reality, they WANT you to buy as much as you can so they can borrow those shares when they would like to short them.

Most people think they are the same or at least similar, They are not. This thread title refers to "Stock Traders" but a lot of the talk veers off into investing. They are totally, 100% different things.

That said, I personally do not invest in the market. I trade. Options specifically. I consider my trading a business and run it as such. Any successful trader does. The returns I get from trading make normal long term investing a pointless use of my capital.