(02-12-2019, 12:36 PM)fenders53 Wrote:

(02-12-2019, 12:23 PM)Otter Wrote:

(02-12-2019, 11:58 AM)fenders53 Wrote:

(02-12-2019, 11:42 AM)Otter Wrote:

(02-12-2019, 11:35 AM)vbin Wrote: Given current market, I want to take money off the table from volatile stocks whenever there is an opportunity. FB will provide another opportunity to enter again

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I have done this in my 401k, which is 90% ultrashort bond fund at the moment. The DGI stuff in taxable accounts I just allow to keep doing their thing.

Vanguard ultra-short bond fund is where I have been hiding my Div and options selling premiums.  Money I may choose to use in 2022-23.  The fund's yield is pretty much a given but I sure never expected the share price to rise like it has lately.  My very high div stocks are flying too.  The market may be running but people are scared IMO.

I went heavy into the ultrashort funds at the end of last August. Just saw this article on SA:

https://seekingalpha.com/news/3432192-investors-remain-positioned-bear-baml

Love the bullet-point for "contrarian buy signal." Gotta reel in the retail suckers for the blowoff top. However high that top may be, I can't see the risk/reward being anywhere close to 2009-2017 gains for whatever remaining time there is in this historically long bull market. Happy to leave my 401k assets in cash equivalents on the sideline and find a better buy-in point than S&P 500 P/E and Shiller P/E ratios that are near historic highs.

Yeah , who knows how high it goes.  If I was 25yrs old I wouldn't care and that served me very well.  A young person should keep a little cash on hand so he can buy the inevitable deals though.  This market could run 50% more, but I doubt it, and not willing to wait ten years to break even on stocks purchased now at clearly high valuations.  Not buying much until the market pulls back some.  If that is next month then great.  There are stocks out there in the buy range now, but the list is very short.  It seems obvious that politics and the world economy will keep the market volatile enough to find some buys while we wait IMO.

(02-12-2019, 12:55 PM)Otter Wrote:

(02-12-2019, 12:36 PM)fenders53 Wrote:

(02-12-2019, 12:23 PM)Otter Wrote:

(02-12-2019, 11:58 AM)fenders53 Wrote:

(02-12-2019, 11:42 AM)Otter Wrote: I have done this in my 401k, which is 90% ultrashort bond fund at the moment. The DGI stuff in taxable accounts I just allow to keep doing their thing.

Vanguard ultra-short bond fund is where I have been hiding my Div and options selling premiums.  Money I may choose to use in 2022-23.  The fund's yield is pretty much a given but I sure never expected the share price to rise like it has lately.  My very high div stocks are flying too.  The market may be running but people are scared IMO.

I went heavy into the ultrashort funds at the end of last August. Just saw this article on SA:

https://seekingalpha.com/news/3432192-investors-remain-positioned-bear-baml

Love the bullet-point for "contrarian buy signal." Gotta reel in the retail suckers for the blowoff top. However high that top may be, I can't see the risk/reward being anywhere close to 2009-2017 gains for whatever remaining time there is in this historically long bull market. Happy to leave my 401k assets in cash equivalents on the sideline and find a better buy-in point than S&P 500 P/E and Shiller P/E ratios that are near historic highs.

Yeah , who knows how high it goes.  If I was 25yrs old I wouldn't care and that served me very well.  A young person should keep a little cash on hand so he can buy the inevitable deals though.  This market could run 50% more, but I doubt it, and not willing to wait ten years to break even on stocks purchased now at clearly high valuations.  Not buying much until the market pulls back some.  If that is next month then great.  There are stocks out there in the buy range now, but the list is very short.  It seems obvious that politics and the world economy will keep the market volatile enough to find some buys while we wait IMO.

I'm rapidly approaching 40, and hopefully "retired" at around 50 (don't intend to lay-around, but doing self-directed work on my own time is the goal). Intent is to then start laddering a portion of traditional IRA funds to Roth once income drops, prior to being able to withdraw from traditional at 59.5 without penalty. 

So, my risk tolerance has dropped for the 401k nest egg. Even a three-year peak-trough-peak interlude could have a negative impact on that plan that costs years of time. Sure, maybe returns are higher if I leave everything in a mix of low-fee equity index funds, but I just don't see the risk/reward there, and was happy to remain fully invested in equity index funds for the entirety of 2009-2017 (even when there were lots of prior "market overvaluation" calls by multiple pundits during that period). 

Then again, the best laid plans of mice and men . . .

(02-12-2019, 05:42 PM)stockguru Wrote: All these oil stocks currently pay over a 3% yield. I did some calculations. To me OIL stocks represent the best values in the market. Below is with only 15k invested.

Symbol        div           shares bought (50)              Dividend payout per year
RDS            .94           50 shares cost $3150        ($188 in dividend payout per year)
TOT            .72           50 shares cost $2700        ($144 in dividend payout per year)
OXY            .78           50 shares cost $3200        ($156 in dividend payout per year)
XOM            .82          50 shares cost $3700        ($164 in dividend payout per year)
CNQ           .335          50 shares cost $1300        ($67 in dividend payout per year)
SU -            .36           50 shares cost $1600         ($72 in dividend payout per year)

Total dividends from about 6 stocks per year $791

$15,650 cost for all 6 stocks to buy at 50 shares each (in 20 years of dividends will make up costs of stocks) $15,820 in dividends if you hold for 20 years. This does not include dividend raises.

(02-12-2019, 06:10 PM)Otter Wrote:

(02-12-2019, 05:42 PM)stockguru Wrote: All these oil stocks currently pay over a 3% yield. I did some calculations. To me OIL stocks represent the best values in the market. Below is with only 15k invested.

Symbol        div           shares bought (50)              Dividend payout per year
RDS            .94           50 shares cost $3150        ($188 in dividend payout per year)
TOT            .72           50 shares cost $2700        ($144 in dividend payout per year)
OXY            .78           50 shares cost $3200        ($156 in dividend payout per year)
XOM            .82          50 shares cost $3700        ($164 in dividend payout per year)
CNQ           .335          50 shares cost $1300        ($67 in dividend payout per year)
SU -            .36           50 shares cost $1600         ($72 in dividend payout per year)

Total dividends from about 6 stocks per year $791

$15,650 cost for all 6 stocks to buy at 50 shares each (in 20 years of dividends will make up costs of stocks) $15,820 in dividends if you hold for 20 years. This does not include dividend raises.

Unsolicited advice alert:

On that list I like RDS and XOM as long-term holdings. I also like CVX, which is not on the list. Oil/gas can be a volatile sector, just like many other commodities, and the lows can last a lot longer than you may think. Oil stocks were a great buy in the mid 1980s, but price recovery in the sector didn't occur until nearly fifteen years later. Then they went on a tear for nearly a decade before hitting the 2008 highs and staying historically high through 2013. 

I think some companies in the sector represent decent value at the moment, but I don't like to ever have too much of my portfolio allocated to oil/gas stocks. They have their own narrative and there's hardly anyone on Earth who can predict it with any certainty. The shale boom of the past decade is just the latest in the industry's long history of sudden, disruptive, and unexpected changes. Shame about all those deep-sea drillers that spent billions manufacturing MODUs and drillships, then went bankrupt, or are a pale shadow of their former selves. Pick the biggest players in the industry that have robust upstream and downstream operations, a long history of successfully rewarding shareholders through good times and bad, and don't put too much of your portfolio in that basket.

(02-13-2019, 07:50 AM)fenders53 Wrote: Oil will do OK enough until the next time the world economy has another recession, or renewables stagnate oil demand permanently.  IMO the latter isn't coming as soon as many predict.  All I know for sure is when we get into the last half of an energy cycle, it always looks like the future is very bright for the industry, right up until it suddenly isn't and you are sitting on dead stocks for years hoping they don't cut the Div in half.  This makes everything but the majors nothing but a swing trade for me.  (and I finally gave up on that).  The others pay those stupid high divs now because they have to or investors won't take the risk.