What I Am Buying Today.

[fenders53]

(12-03-2021, 02:38 PM)bankerboy Wrote: I find this thread interesting given the buying and selling habits many here do on a daily basis. I try to sit on 7-8% cash and buy the big dips, like greater than 10% usually before I part with cash.

For some reason I struggle to part with my cash when the market is bouncing like it has this week, I call it patience but it feels a bit more like fear….

The wife and I max the 401ks out in mainly index funds and been doing that for 30 plus years but I don’t even give that a thought however…

Biden is starting to remind me of Carter, seems to be doing everything possible to kill the economy. Think I will hold onto my cash a bit longer. It’s only losing value at the rate of inflation …….and we haven’t had a decent correction in a long time.


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When you stop being a little scared you will be upgraded to broke and stupid within a year or two.     

Most of us have been through some corrections.  It's never the same.  We've never seen liquidity like this.  I'm not even completely confident they will raise rates a little when they clearly need to.  Sure the market could correct.  Then what?  We all go buy 1% CDs and work until we are 75?  I don't think so.  I do find some comfort in the fact all but a few dozen stocks are now priced less ridiculous.  The juice isn't going to stop and US companies will continue to be profitable enough.  Probably for years but that is just my opinion.

[kered]

(12-03-2021, 02:33 PM)fenders53 Wrote:

(12-03-2021, 02:09 PM)kered Wrote: What percentage do you guys typically keep in cash? My main issue is i dont keep enough. Every time i build up my cash reserves a dip happens and i spend it.

Right or wrong here is what I did and your mileage may vary.  

Age 25 every dime I could scrape up invested.

Age 40 the tech bubble crash tore my face off and I was sick that I couldn't buy enough, but I had a good job and my 401K contributions helped the early 2000s suck less.  I vowed I would never be cashless again.  About 5% in Short term Gov securities and 5% in bonds.  That allowed me to throw a few bucks n the market on a 10% dip.  When the market recovered the money went back to safe.  Some might call that market timing.  I call it improving my mental health.  I hate it when I can't buy a sale.  It truly distracts me from the majority of my port getting pounded.

Age 45 the Financial crisis was coming and I smelled trouble.  The one and only time I tried to market time in a big way.  Moved half my money to ST GOV bonds.  When the world melted down I started averaging back into the market  Worked out well.  I got lucky,

Age 55 and retirement is approaching.  Bonds suck now so about 15%-30% cash.  I use cash to secure the puts I sell for income so my cash balance can swing wildly if the market isn't right to sell puts.    

Age 59 and I plan to retire soon.  I am willing to go 90% in the market but only if it gets absolutely hammered.

After all that typing, I think 10% cash is appropriate most of the time.  I can't prove it's the correct answer, but buying stuff 25%+ off seems like a good idea to me.

Yea im 35 now. 401k is the main portion and i dont touch that at all other than the bi-weekly paycheck dump into it. I dont factor that in any equation. I also have a roth through schwab. Every time i get 5% cash and see a dip i buy down to 1-2%. I think im finally gonna get my cash up to 10% because i can see these valuations finally dropping back to reality and i wanna be ready.

[crimsonghost747]

Regarding cash, I personally have a plan where I invest X dollars per month. All time highs or a dip of 30%, the amount stays the same. This is mainly just so I keep pumping cash to income generating stocks, even if I think it's expensive.

On top of that, I have a sizeable amount of cash that starts getting deployed when I feel like there are some bargains out there. We are not even close to me touching this money yet.

[EricL]

I never have more than a few hundred in cash in my brokerage accounts.

In my DGI account, I've been reinvesting dividends whenever they build up to $200-$300.

[fenders53]

(12-03-2021, 03:40 PM)kered Wrote:

(12-03-2021, 02:33 PM)fenders53 Wrote:

(12-03-2021, 02:09 PM)kered Wrote: What percentage do you guys typically keep in cash? My main issue is i dont keep enough. Every time i build up my cash reserves a dip happens and i spend it.

Right or wrong here is what I did and your mileage may vary.  

Age 25 every dime I could scrape up invested.

Age 40 the tech bubble crash tore my face off and I was sick that I couldn't buy enough, but I had a good job and my 401K contributions helped the early 2000s suck less.  I vowed I would never be cashless again.  About 5% in Short term Gov securities and 5% in bonds.  That allowed me to throw a few bucks n the market on a 10% dip.  When the market recovered the money went back to safe.  Some might call that market timing.  I call it improving my mental health.  I hate it when I can't buy a sale.  It truly distracts me from the majority of my port getting pounded.

Age 45 the Financial crisis was coming and I smelled trouble.  The one and only time I tried to market time in a big way.  Moved half my money to ST GOV bonds.  When the world melted down I started averaging back into the market  Worked out well.  I got lucky,

Age 55 and retirement is approaching.  Bonds suck now so about 15%-30% cash.  I use cash to secure the puts I sell for income so my cash balance can swing wildly if the market isn't right to sell puts.    

Age 59 and I plan to retire soon.  I am willing to go 90% in the market but only if it gets absolutely hammered.

After all that typing, I think 10% cash is appropriate most of the time.  I can't prove it's the correct answer, but buying stuff 25%+ off seems like a good idea to me.

Yea im 35 now. 401k is the main portion and i dont touch that at all other than the bi-weekly paycheck dump into it. I dont factor that in any equation. I also have a roth through schwab. Every time i get 5% cash and see a dip i buy down to 1-2%. I think im finally gonna get my cash up to 10% because i can see these valuations finally dropping back to reality and i wanna be ready.

Sounds like you are doing fine.  Feed the 401K for decades.  The cash question is basic market stats for me.  Neverminx recently; the average market return is under 10% over time.  Good stocks go on sale 25% off every year and the market dips 10% quite regularly.  Every few years much more.  I can be wrong for long periods of time and suddenly it looks good.  If the market gets truly crushed go all in if you wish and start building cash for next time.  Nobody thinks this market is cheap today.  High probability you can pick up some huge discounts in the next few years.

You are too young to hold a ton of cash.  Don't turn it into a game of market timing.  You'll lose over time.  Last point, folks quote Buffet all the time like they don't realize BRK is sitting on $100B cash for years.  Hmmm, wonder why?

[Marknew]

Ok all I'm a newbie. I just starting investing like 2 months ago. All my friends were doing it, so they talked me into it lol

I'm 23 years old and just graduated from U Maryland. I don't make much money yet but decided to invest 30k in the market.

Bought GNRC, SQ, PYPL, BEPC, VMW, COUP, DKNG, ATVI, VZ, MTCH, SDGR, JNJ, V and some others

My portfolio in just 2 months is down to $17,786. So lost almost half. I suck at this lol. Now I have no money to buy more to average down.

I am sick to my stomach. I thought these were all good stocks and then WHAM!! Any advice? Will these come back over time?

[fenders53]

Welcome to the forum. This place is slow on weekends but you'll get some feedback. Your own thread will get even more help if you stay attentive to it. I'll only comment on the stocks I follow for now.

GNRC JNJ V are very solid. I like SQ and ATVI though a little more speculative. Not a VZ fan but it shouldn't hurt you much. Is BEPC the renewables ETF? If so it will rebound. My condolences on DKNG. I've traded it but sold when football season started. It's too late to sell it IMO. It will require patience. The market hates it right now.

The high valuations got you in trouble and it may not be over for awhile. Don't panic sell. This is part of the learning process. If you think you need to sell something tell us why first.

[bankerboy]

(12-03-2021, 05:07 PM)Marknew Wrote: Ok all I'm a newbie. I just starting investing like 2 months ago. All my friends were doing it, so they talked me into it lol

I'm 23 years old and just graduated from U Maryland. I don't make much money yet but decided to invest 30k in the market.

Bought GNRC, SQ, PYPL, BEPC, VMW, COUP, DKNG, ATVI, VZ, MTCH, SDGR, JNJ, V and some others

My portfolio in just 2 months is down to $17,786. So lost almost half. I suck at this lol. Now I have no money to buy more to average down.

I am sick to my stomach. I thought these were all good stocks and then WHAM!! Any advice? Will these come back over time?

Whatever you do at least fund your 401(K) in a S&P 500 mutual fund so you get the max match from your employer. At your age time will be where you make your money and over 30 plus years. It’s really difficult to beat a good index mutual fund.


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[crimsonghost747]

One point people also tend to forget about when talking about cash is the ability to use margin.
Is it risky? sure.
But in a large dip it can be ridiculously profitable. The key is not to rush into leveraging, and not to overleverage.

In the covid panic I had a long list of SP500 prices. Everytime the SP500 dropped lower and hit one of those prices, I deposited an X amount (this was around 3-4x my regular monthly contribution). On top of this I was still pushing in that monthly deposit too. I think I hit 4 of those "deposit more" prices. I had another 3 or so left before my cash ran out, and then I had another 3 or so where I was going to use margin.

Obviously I was bad at timing the market (it's my super power) but I was definitely prepared to use margin when I ran out of cash. Right now my cash position is pretty large once again, and we are still far from me even depositing extra into the accounts, but once again if a real crash comes, I'm not afraid to throw some margin in the game.

That is food for thought for those who prefer to remain 100% invested, there is still a way to buy the dip.

[crimsonghost747]

(12-03-2021, 05:07 PM)Marknew Wrote: Ok all I'm a newbie. I just starting investing like 2 months ago. All my friends were doing it, so they talked me into it lol

I'm 23 years old and just graduated from U Maryland. I don't make much money yet but decided to invest 30k in the market.

Bought GNRC, SQ, PYPL, BEPC, VMW, COUP, DKNG, ATVI, VZ, MTCH, SDGR, JNJ, V and some others

My portfolio in just 2 months is down to $17,786. So lost almost half. I suck at this lol. Now I have no money to buy more to average down.

I am sick to my stomach. I thought these were all good stocks and then WHAM!!  Any advice? Will these come back over time?

Welcome.

There is a lot of highly valued growth stocks in your purchases. And that is indeed the reason why you are down so much. Fenders was saying this for years: valuation matters in the end. We all knew he was right, and now we all see it in the charts.

There are many ways to invest but if you stick around then you will see that in general we have a very slow and steady approach. And one that is very well suited for downward trends such as the one we are seeing now. JNJ is a great example of this approach, most of us here own it and personally I'm ok with holding it for several decades, no matter what the market does.

Best advice I can give you is to not do anything irrational. A lot of people in your shoes would panic sell everything and never touch the market again. You have already passed that stage since you are here. Use this as a learning opportunity, see where you went wrong (there is a big hint in the first sentence of this post ) and then figure out how to improve your strategy. 

Many of us have been doing this for longer than you have been roaming this planet, and we still learn new things constantly. Making mistakes is absolutely normal and it still happens to me all the time. It's about learning from them and adjusting.

[fenders53]

I don't use margin anymore but Crimson is right. If you wait for a real correction to mostly play out a little margin won't hurt you. After a big dip the market would have to dip to gut wrenching levels to hurt you with 10 or 20% margin. That is plenty of margin until you have some experience. Most people that get in trouble have an entire port of speculative holding.

This is when you buy AAPL or V way off it's high. It's not when you buy profitless Specs that are still overvalued. Don't buy a stock like BABA that still falls 4 days a week. Crypto and options are a bad idea. Falling knife buys cause margin calls. The market can be brutal and that $100 stock that was actually worth 60 can indeed fall to 25 and stay there awhile. I may have some experience in this matter early in my investing career. Excessive margin eliminates the option of being patient.

[ken-do-nim]

(12-03-2021, 05:07 PM)Marknew Wrote: Ok all I'm a newbie. I just starting investing like 2 months ago. All my friends were doing it, so they talked me into it lol

I'm 23 years old and just graduated from U Maryland. I don't make much money yet but decided to invest 30k in the market.

Bought GNRC, SQ, PYPL, BEPC, VMW, COUP, DKNG, ATVI, VZ, MTCH, SDGR, JNJ, V and some others

My portfolio in just 2 months is down to $17,786. So lost almost half. I suck at this lol. Now I have no money to buy more to average down.

I am sick to my stomach. I thought these were all good stocks and then WHAM!!  Any advice? Will these come back over time?

If it makes you feel better when I was just out of college I lost my shirt too.  I monthly purchased Nortel & Lucent into bankruptcy, and Merck into nowhere.  I did a little better with AMD; I'd buy at 16 and sell at 21, rinse & repeat.  But man oh man if I had just held onto those AMD shares from 25 years ago!  Then there's the time I bought Apple at $20/share when the ipod came out, and sold at $30 to put my wife through school.  If I'd held...  

I always tell new investors to start with the S&P 500 index fund VOO.  Stocks I would add after that are Apple, Microsoft, BroadCom, & Target, as well as the semiconductor index SOXX.  Google too.

I've had trouble this year with pharma/biotech but I think Pfizer looks great going forwards.  JNJ is, for whatever reason, no longer a ticker I trust, and they are going to break into two companies anyways.  Abbvie is very tempting but competitors are going to start producing Humira in 2023.  I keep hearing that is already priced in, but we'll see.  Eli Lilly is the leader in Alzheimers treatments so they look great long term too.  I had a train wreck ride with Moderna this year but it seems any price in the $200s is pretty good.

Verizon & AT&T just can't seem to demonstrate price stability.  The dividend is tempting but if it's high yield you are looking for, say to supplement your income, the 3 capitals are much better options: Ares Capital, Hercules Capital, and Oxford Lane Capital.  Chimera Investments and NexPoint Real Estate too.

Square, Paypal, and financial tech in general I'd stay away from individual tickers.  The competition in this space seems brutal and 10 years from now the names could all be different. Visa and Mastercard may still be around, but they may have to lower their fees a lot, and thus their profitably will be lower as well.

I can't speak to your other initial purchases.