Investing & Financial Advisors

[jlcj7]

I am no professional by any means. Just know enough to get myself in trouble. But I think Netflix and PayPal stocks are trading at a bargain currently. I bought some recently and already up decent and I think they will head much higher over the 6-12 months. I don’t get greedy. If I make 30% I usually cash out the profits and look for another bargain.

 

[BlkGS]

Haha I’m all fiat as well. I’m not even allowed to own crypto based on my job.
Negative interest rates aren’t great but at least you generally know what a dollar will be worth tomorrow and 5 years from now, even if it’s at a -0.XX% rate. Not the case with cryptocurrency at this point.
I think Elon is a genius of sorts but he’s playing with other people’s money by having Tesla invest so heavily in Bitcoin and also with his sometimes flippant investment comments that many people will follow without having any understanding.
Tesla’s job is to create value through building cars not highly volatile investments. Start a hedge fund if you want to do that stuff.

Elon Musk isn't an engineer, he's a charlatan making a shit load of money off convincing people he's a genius and using his influence to drive markets the way he wants. He's like a Warren buffet, with less principles and a lot more ego.

 

[BlkGS]

I am no professional by any means. Just know enough to get myself in trouble. But I think Netflix and PayPal stocks are trading at a bargain currently. I bought some recently and already up decent and I think they will head much higher over the 6-12 months. I don’t get greedy. If I make 30% I usually cash out the profits and look for another bargain.

Personally I have a very hard time calling any stocks a bargain right now. We're the fed to have not involved itself so heavily in the stock market in 2020, we would likely be looking at a market that was 30nto 50% lower, with some very notable exceptions being worth far less than that.

I suppose in theory the fed can keep printing money and buying securities and propping the market up and people will be happy, but inflation will be the result of it and we will not be happy.

 

[2kwik4u]

Man, you and I see the world SOOOO much differently.

You must not remember 08. 10% is very high on average, I think the long term average is roughly 7%. That's not taking into account the hyper volatility of our current financial markets due to algorithm trading, insane leverage for people who don't get how it works, and the reality that we don't typically have pensions of social security to fall back on. The fact that most people's entire life savings for retirent is put into the stock market should scare everyone.

Remember '08 just fine. I'm just not as cynical about it. Long term average is around 7% for the entire stock market. 10% is easily achievable if you follow just a snippet or two of online advice. I've averaged over 25% the last 3 years running, and over 15% for the last decade. That said, I have a professional choosing my funds for me based on my risk level tolerance, and my desire to be diversified.

A few thoughts... 401ks are inherently good ideas now because they avoid taxes today. Roth IRAs are I herently stupid because you have to trust that our government (that borrows trillions more every year) doesn't go back on its promise to not tax you later, which they absolutely will.

The guys saying to max out your 401k are right, it only hurts at first, you get used to it pretty quickly and it becomes your new normal revenue stream.

Sure 401k's are great. However your comment on Roth IRA's being inherently stupid is well.....poorly thought out and overly cynical. You don't know anymore that they WILL tax the gains, than I do that they WON'T tax the gains. They're just as likely to flip and say no to taxing 401k's as they are to saying yes to tax Roths. This is all conjecture, but your starting from a losing position instead of starting from a winning position. If you invest in a ROTH now, and they tax it later, what have you lost other than the tax you've already paid on the input? The potential to get untaxed gains far outweighs the cost to pay in with taxed money. Your logic is being clouded by your suspicion and distrust of the government regulators. If the thing exists (like the EV tax credit you think is stupid) you should take advantage of it.

Financial advisors are not made equal. Merrill Lynch FAs are basically in a pyramid scheme where they have to bring in ever increasing amounts of business until they have a big enough book of business to have their own branch. Your FA makes maybe 45k a year and is essentially in investment retail sales, and they're trained just enough to know words to say. If you find a good FA, stick with them.

That said, FAs are quickly becoming a thing of the past. When you can just buy shares in managed funds, the FA becomes a needless middleman.

My FA does significantly more more than just pick the stocks I buy. He's a hub of information and a strong sounding board for major life decisions. He's helped me work through the financial risks/rewards of taking different jobs. He's helped setup life insurance policies, and put the necessary documents in place to ensure they're paid quickly and accurately to the right places. He helps us plan which financial tools to use to reach the individual goals we have set out. If you think all a FA does is pick stocks to invest in, well, you're missing the bigger picture. He's setup so that if I die tomorrow, my wife calls him and he will literally handle all the end of life expenses, and setup the life insurance payout for my wife and the boys. He knows when and how we want to retire, has developed a plan on how to get there, and tells us how close to "on track" we are to hitting that goal. We tag up every 6mo and adjust as needed. He is far and away NOT just a needless middleman.

Of all the shit I have to keep track of in my life right now, trying to determine which index fund best matches my individual risk tolerance level and will garner an acceptable return is NOT one of them.....I pay a guy that knows way more than I do to do that for me. If I did it, I would likely do it wrong, and it would consume so much time I would miss other things in life.

I'm glad there are options like this. If my FA didn't exist I would likely be so far behind on retirement I wouldn't make it. I learned exactly DICK from my parents on how to save, or really handle money at any level. So, my FA is standing in for them in that regard. We're watching our parents retire now with NOTHING to show for years of work. I'm not letting that happen to me, in general I have no idea how to do it. So I'm letting someone else take some of my "winnings" in exchange for the knowledge of how to get those winnings. Without him, I would be getting nothing.

 

[BlkGS]

Man, you and I see the world SOOOO much differently.



Remember '08 just fine. I'm just not as cynical about it. Long term average is around 7% for the entire stock market. 10% is easily achievable if you follow just a snippet or two of online advice. I've averaged over 25% the last 3 years running, and over 15% for the last decade. That said, I have a professional choosing my funds for me based on my risk level tolerance, and my desire to be diversified.


Sure 401k's are great. However your comment on Roth IRA's being inherently stupid is well.....poorly thought out and overly cynical. You don't know anymore that they WILL tax the gains, than I do that they WON'T tax the gains. They're just as likely to flip and say no to taxing 401k's as they are to saying yes to tax Roths. This is all conjecture, but your starting from a losing position instead of starting from a winning position. If you invest in a ROTH now, and they tax it later, what have you lost other than the tax you've already paid on the input? The potential to get untaxed gains far outweighs the cost to pay in with taxed money. Your logic is being clouded by your suspicion and distrust of the government regulators. If the thing exists (like the EV tax credit you think is stupid) you should take advantage of it.


My FA does significantly more more than just pick the stocks I buy. He's a hub of information and a strong sounding board for major life decisions. He's helped me work through the financial risks/rewards of taking different jobs. He's helped setup life insurance policies, and put the necessary documents in place to ensure they're paid quickly and accurately to the right places. He helps us plan which financial tools to use to reach the individual goals we have set out. If you think all a FA does is pick stocks to invest in, well, you're missing the bigger picture. He's setup so that if I die tomorrow, my wife calls him and he will literally handle all the end of life expenses, and setup the life insurance payout for my wife and the boys. He knows when and how we want to retire, has developed a plan on how to get there, and tells us how close to "on track" we are to hitting that goal. We tag up every 6mo and adjust as needed. He is far and away NOT just a needless middleman.

Of all the shit I have to keep track of in my life right now, trying to determine which index fund best matches my individual risk tolerance level and will garner an acceptable return is NOT one of them.....I pay a guy that knows way more than I do to do that for me. If I did it, I would likely do it wrong, and it would consume so much time I would miss other things in life.

I'm glad there are options like this. If my FA didn't exist I would likely be so far behind on retirement I wouldn't make it. I learned exactly DICK from my parents on how to save, or really handle money at any level. So, my FA is standing in for them in that regard. We're watching our parents retire now with NOTHING to show for years of work. I'm not letting that happen to me, in general I have no idea how to do it. So I'm letting someone else take some of my "winnings" in exchange for the knowledge of how to get those winnings. Without him, I would be getting nothing.

I approach things based off math. I'm averaging some insanely high number too, but I also recognize that a year or two of negative growth, or flatlining drops that average very quickly. Can you hit 10% long term? Probably. Will everyone, including people on top of it? No. A lot will be due to timing, people who cashed out of the market in 07 to retire vs people who were set to retire in 09 are in 2 very different buckets of long term ROI.

A good FA or money manager is worthwhile. But a shitty one isn't worth a damn. If yo get an FA like my sister who all she knew was what was in the Merrill lynch scripts, you're better off in a target date fund.

Regarding Roths vs 401k, if you're already maxed out your pre tax contributions, a Roth is better than nothing. But they are not better than a 401k because the risk is inherently higher. You know you will be taxed on a 401k as it comes out, that's a given. With a Roth, you know you're being taxed now. There is a likelihood you will be taxed later as the govt struggles to pay back all the money it's over spent. It's a known tax vs an unknown, unknown is always higher risk IMO. Plus, most people live off less money when they retire than they did when working. So paying tax now means you'll pay a higher rate, vs paying tax when you live off a fixed income from your 401k.

My parents did basically the same thing, they didn't know shit how to retire and now at retirement age are fumbling around trying to keep up a lifestyle but also have little to nothing saved. That's why companies are pushing target date funds, because they know your average person on the street doesn't know shit about investing and the best thing they can do is automate it for them. Or, if you find a good FA, they're value add. But if you get some 25 year old kid at merill lynch or whatever, you're just feeding a big bank a loan.

 

[AZMark]

It would be a bad idea to build your families future on the assumption that the last 10 years of stock market returns is normal or average. I’m definitely not comfortable assuming I can average 10% per year for the next 20 years from our current artificially elevated levels.

Edit: inflation is a huge part of the calculation too. You have to think about the returns after inflation. 10% after inflation puts you at 17% return this year and that’s not going to happen.

I really don’t see the government re-taxing something they have already committed to not taxing as far as money already in Roths. They tend to grandfather that type of thing in. I’m not sure how much is out there in Roths but I think taxing those would be a relatively small revenue boost for the government and tremendously unpopular with voters.

 

[BlkGS]

It would be a bad idea to build your families future on the assumption that the last 10 years of stock market returns is normal or average. I’m definitely not comfortable assuming I can average 10% per year for the next 20 years from our current artificially elevated levels.

I really don’t see the government re-taxing something they have already committed to not taxing as far as money already in Roths. They tend to grandfather that type of thing in. I’m not sure how much is out there in Roths but I think taxing those would be a relatively small revenue boost for the government and tremendously unpopular with voters.

Agree on both counts, but I also don't expect the government to make decisions that make sense. If some billionaire funded PAC links Roths to those evil rich people, I could easily see a lot of voters being swayed to raiding Roths.

We will of course, never see any sort of change that prohibits being paid in assets, then borrowing against those assets to fund your revenue stream for your bills to avoid taxes scheme that the rich do, because that wouldn't be good business for our government.

 

[AZMark]

Agree on both counts, but I also don't expect the government to make decisions that make sense. If some billionaire funded PAC links Roths to those evil rich people, I could easily see a lot of voters being swayed to raiding Roths.

We will of course, never see any sort of change that prohibits being paid in assets, then borrowing against those assets to fund your revenue stream for your bills to avoid taxes scheme that the rich do, because that wouldn't be good business for our government.

It’s definitely a concern. I was pretty shocked when I saw that Peter Thiel guy had billions in a Roth, that’s the shit that gets headlines and will ruin it for everyone normal.

Realistically if they started taxing them they’d need to find a way to just tax the difference to get you up to the presumably higher tax rate in the future and give you credit for the taxes you already paid over the years. At that point it would be a wash with a regular 401k/IRA and you wouldn’t be any worse off for trying the Roth route.

 

[BlkGS]

It’s definitely a concern. I was pretty shocked when I saw that Peter Thiel guy had billions in a Roth, that’s the shit that gets headlines and will ruin it for everyone normal.

Realistically if they started taxing them they’d need to find a way to just tax the difference to get you up to the presumably higher tax rate in the future and give you credit for the taxes you already paid over the years. At that point it would be a wash with a regular 401k/IRA and you wouldn’t be any worse off for trying the Roth route.

Agreed, but you're assuming they'd do something fair and sensible. They could label it a billionaire tax and tax everyone without your average moron batting an eye.

What really concerns me is wealth taxes. I can feel them coming, where people will be taxed on their accumulated assets. Some of the hardcore people out there have already talked about it and it seems to be creeping out of radical elements to the very activist levels and will eventually get semi mainstream support. If that sort of insanity catches on... Who knows wtf will happen.

Even if they were to say, start it at a million dollars, that'd put a lot of people who have a healthy 401k or two, a home that appreciated in value, etc into the mix, and the average person would just think "those damn millionaires should pay their share!"

 

[swatski]

I approach things based off math.

That how you called tesla stock massively overvalued at $50 two years ago?
Just wondering...


why I come to JB.net for investing advice! lolol

 

[AZMark]

Some basic long term perspective on the market valuation. The implication of this ratio (total market valuation to GDP) is that we have to experience really strong GDP growth on top of the strong growth we’ve already experienced to catch up to valuations, or stock valuations will need to come down/grow slower if the above average GDP growth doesn’t come to fruition.

Here's what Warren Buffett's favorite stock market indicator is saying now

Yahoo Finance returns to a look at Warren Buffett's favorite stock market indicator amid a tough start to the year for investors.

finance.yahoo.com

 

[BlkGS]

That how you called tesla stock massively overvalued at $50 two years ago?
Just wondering...


why I come to JB.net for investing advice! lolol

Absolutely. That's why it's still overvalued, lol. It's valued insanely high because it could grow to be as big as gm or something. But it's already valued more than GM. So if it were to be the size of gm and valued as a business, it'd be worth les than it is now.

Clearly, I'm not the best at picking stocks lol. But based on math, Tesla should be valued at a massively lower amount.

 

[Cambo]

401K sucks looking back at how its performed and the way it was pitched to me by the companies who mange them It should be at 1million its not even close. 25 years on and off doing the company match It had made gains but then took losses only in the last 3 years it has really performed. The reason I say it sucks is because I took money and invested into real estate over that same time frame and probably less money luckily buying at the right time and renting the properties the tenants all paid for the properties and they went up an astronomical amount. Now they are all paid off and still generating rent that has doubled almost tripled. As others have mentioned I watched my parents and learned from them passing up buying houses as a child but remembered all the times that the houses would go up in value and the discussions of," we should have bought it look what it just sold for" and me asking what did your parents house cost, It just made sense

Here is one of the charts the problem is it doesn't always go up that chart is not reality. My prediction, get ready to give back some of those gains

 

[adrianp89]

401K sucks looking back at how its performed and the way it was pitched to me by the companies who mange them It should be at 1million its not even close. 25 years on and off doing the company match It had made gains but then took losses only in the last 3 years it has really performed. The reason I say it sucks is because I took money and invested into real estate over that same time frame and probably less money luckily buying at the right time and renting the properties the tenants all paid for the properties and they went up an astronomical amount. Now they are all paid off and still generating rent that has doubled almost tripled. As others have mentioned I watched my parents and learned from them passing up buying houses as a child but remembered all the times that the houses would go up in value and the discussions of," we should have bought it look what it just sold for" and me asking what did your parents house cost, It just made sense

Here is one of the charts the problem is it doesn't always go up that chart is not reality. My prediction, get ready to give back some of those gains

View attachment 173620

I don't disagree, but 401k also helps drive down my taxes by a significant amount.