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Old 12-29-2013, 04:39 PM   #1
lag
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Default Look, this is our personal finance thread

This should be a catch all thread for financial questions outside of the day trading thread.

If you trust the advice of the OT, ask away.

By nature of the subject there will be plenty of facts and many more opinions. Take what works for you in your situation and improve it.
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Old 12-29-2013, 05:07 PM   #2
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I'll start...

Currently putting extra money into target date funds (e.g. Vanguard 2045, low expense ratio), dump it in and forget it kinda deal.

I'm thinking about starting branch out, and make some investments on my own, rather than in a fund of funds like I'm currently doing. Been reading O'Shaughnessy and some other books recommending stock strategies with varying degrees of risk.

All in all, I'm wondering if the effort will be worth it, or if it is even irresponsible begin to do as a hobby? Doing so will probably amount to performing basic stock research for compiling a group of say, 20 stocks, based on recommended criteria, holding for a year, then re-evaluating the list each year.

I guess I'm asking how many of you regularly hold/monitor groups of stocks vs. simply utilizing mutual funds, or funds of funds?
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Old 12-29-2013, 05:26 PM   #3
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I personally have three different avenues, all with USAA. I do some stock trading, I have a mutual fund, and I have a roth IRA that's primarily in a different mutual fund that I'm maxing out.

My regular mutual fund is the USAA Precious Metals, which has been a terrible investment. But I am considering trying to dump more money into it now while it's low in the hopes of it eventually bouncing back.

I've done pretty well for myself with stocks, though I imagine my taxes this year are going to suck...I don't mind paying the short term capital gains taxes, but I do see it being a pain to actually file everything. I'm up 60% this year with my stock purchases. I'm not as knowledgeable as I strictly should be, but my strategy has basically been to look for huge drops on a company in the sector I know the most about (technology) and then I ask myself if I think it's a market over-reaction, usually in the case of quarterly earnings releases. I've bought and sold AMD several times this year, making a profit each time.

I did miss out on a huge gain from one company I bought...sold it a few weeks later for a 10% profit, which I was perfectly satisfied with...a couple months later, it's announced that it's being bought out and the stock gained 60% in a single day. I would've made 8 grand if I had been "greedy" and held on a while longer.
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Old 12-29-2013, 05:28 PM   #4
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Quote:
Originally Posted by SoapBox View Post
I'll start...

Currently putting extra money into target date funds (e.g. Vanguard 2045, low expense ratio), dump it in and forget it kinda deal.

I'm thinking about starting branch out, and make some investments on my own, rather than in a fund of funds like I'm currently doing. Been reading O'Shaughnessy and some other books recommending stock strategies with varying degrees of risk.

All in all, I'm wondering if the effort will be worth it, or if it is even irresponsible begin to do as a hobby? Doing so will probably amount to performing basic stock research for compiling a group of say, 20 stocks, based on recommended criteria, holding for a year, then re-evaluating the list each year.

I guess I'm asking how many of you regularly hold/monitor groups of stocks vs. simply utilizing mutual funds, or funds of funds?
The VG target date fund is a nice, simple solution to investing. I tend to use the slightly lower ER index funds, but the overall effect is the same - massive diversification with low cost.

Picking individual stocks or coming up with market "strategies" is a recipe for failure over the long run, in my opinion. Of course, many would argue this is not just an opinion and based on mountains of evidence demonstrating the overall relatively dismal results of actively managed funds.
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Old 12-29-2013, 05:34 PM   #5
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Hm.... I'm kinda boozing, but here goes a short synopsis.


Invest $250,000+/-, or rent out the house worth said amount. Deed in hand. House is in desired neighborhood, 18 hole golf course, new construction, pool and spa, wood floors, granite, the whole nine.

I have access to a capital management company free of charge.

Money will remain untouched for two plus years as I'll be moving to South Korea with the woman.

Edit: house would net monthly rent at $1800-$2000 monthly.

Last edited by Vectors2Final; 12-29-2013 at 05:43 PM.
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Old 12-29-2013, 05:35 PM   #6
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Of course, many would argue this is not just an opinion and based on mountains of evidence demonstrating the overall relatively dismal results of actively managed funds.
That's just the thing. Aren't I paying into one of those funds which would be lucky to beat the SP500 index in the long run?

Whereas the following exemplary strategy has beaten the SP500 over EVERY ten year period in the market's history, if you religiously stick to it (the big problem with managed funds, hunches get in the way of playing the time-tested averages):

Buy the 25 best* stocks which:

1. Market cap >$150 mil.
2. Price to sales < 1.
(*Buy the 25 with the best one-year price appreciation)
3. Re-run the numbers every year.

Does anyone do anything like the above?


Again, I'm an investing newb, and I know that I'm prone to read something, and believe in it. So just looking for some additional insight.

Last edited by SoapBox; 12-29-2013 at 05:47 PM.
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Old 12-29-2013, 05:37 PM   #7
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That's just the thing. I'm paying into one of those funds which would be lucky to beat the SP500 index in the long run.
That's kind of the point - it (target date funds) contains lower risk bond investments. Obviously if you're young and have a high risk tolerance, a stock-heavy asset allocation might be preferable.
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Old 12-29-2013, 06:32 PM   #8
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That's kind of the point - it (target date funds) contains lower risk bond investments. Obviously if you're young and have a high risk tolerance, a stock-heavy asset allocation might be preferable.
At this point, it has very little bond investments, it's mostly stock this far out. 90/10 currently, iirc. That will taper of course, as you approach the target date.
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Old 12-29-2013, 06:39 PM   #9
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Diversified into about 20 different investments between current 401k and IRA. Mostly in aggressive (stock) funds, a target date fund, and a couple low risk bond funds. Still young so the risk is acceptable for long term outlook. Could probably be doing *much* better but I'm lazy, I guess. I save as much as I can afford, and occasionally dump a poor performer for something with a better outlook. My IRA is a collection of 4 or 5 rollovers at this point and is currently at 27% return. Current 401k was just started about 9 months ago and is sitting at 17% return so far.
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Old 12-29-2013, 06:49 PM   #10
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My 401K is for my 'safe' investments, targeted funds, index funds, etc.

My brokerage account is for whatever, up to Vega$. I don't day trade, but I do invest in penny stocks - not on a 'hot tip', newsletter suggestion, or anything like that. I run my own stock screens using freely available online filters on sites likes MSN and Yahoo Finance. After I pare it down based on industry, 52-week low, and a slew of other criteria, I start to research the HELL out of what remains.

I spend weeks to months researching a dozen or so pennies, by contacting the companies' officers directly, message board posts (yes, mostly noise, but some signal to be found), reviewing SEC filings, etc. I go full tilt Sherlock, and further pare down my selections.

Then, I buy a bunch and wait, generally years. Several of these companies (MHTX, HIIT, NJMC) I've been sitting on for close to a decade.
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Old 12-29-2013, 06:56 PM   #11
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I used to do research for a living. The amount of work you need to put into an investment is staggering. Anything else and you are barely covering your ass by doing "seeking alpha" "Motley fool" level of analysis.

However, that can be enough in a PA. However, I was recommending investments that amounted to $4-50mm bite size chunks where the risk tolerance was absolutely zilch (3% principal loss was a disaster).
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Old 12-29-2013, 07:11 PM   #12
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This is all the advice you need.

Anyone who suggests otherwise (who doesn't work for Goldman Sachs, the Fed or an academic PhD economist) is either trying to get your money or is a giant ****.

http://www.washingtonpost.com/blogs/...ull-ever-need/
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Old 12-29-2013, 07:14 PM   #13
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#3 is what I am getting at.

You can help even the playing field by doing more research but you gotta be really good at it.

Otherwise its a rising tide phenomenon.
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Old 12-29-2013, 07:15 PM   #14
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Originally Posted by Indocti Discant View Post
#3 is what I am getting at.

You can help even the playing field by doing more research but you gotta be really good at it.

Otherwise its a rising tide phenomenon.
12345

I'm always amused when I meet people who buy and sell individual securities. Oh, you did some research into the company and you have a Schawb account? That's cute. Do you have the ability to conduct HFT? No? Then stahp.

It bottles my mind why people actually think they can outperform BlackRock, Vanguard, etc. and try to buy and sell individual securities themselves, rather than just give their money to those guys.
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Old 12-29-2013, 07:16 PM   #15
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Originally Posted by FightingFalcon View Post


This is all the advice you need.

Anyone who suggests otherwise (who doesn't work for Goldman Sachs, the Fed or an academic PhD economist) is either trying to get your money or is a giant ****.

http://www.washingtonpost.com/blogs/...ull-ever-need/
This.
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Old 12-29-2013, 07:30 PM   #16
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Quote:
Originally Posted by FunkerVogt View Post
My 401K is for my 'safe' investments, targeted funds, index funds, etc.

My brokerage account is for whatever, up to Vega$. I don't day trade, but I do invest in penny stocks - not on a 'hot tip', newsletter suggestion, or anything like that. I run my own stock screens using freely available online filters on sites likes MSN and Yahoo Finance. After I pare it down based on industry, 52-week low, and a slew of other criteria, I start to research the HELL out of what remains.

I spend weeks to months researching a dozen or so pennies, by contacting the companies' officers directly, message board posts (yes, mostly noise, but some signal to be found), reviewing SEC filings, etc. I go full tilt Sherlock, and further pare down my selections.

Then, I buy a bunch and wait, generally years. Several of these companies (MHTX, HIIT, NJMC) I've been sitting on for close to a decade.
MHTX:
Dec 2003 price 0.065
Current price 0.07

HIIT:
Feb 2012 price 0.10 (oldest price I could find)
Current price 0.60

NJMC:
Dec 2003 price 0.065
Current price 0.091

With the exception of HIIT, these picks are awful if you've truly held them for close to a decade. This is why you don't individual stock.
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Old 12-29-2013, 07:34 PM   #17
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Quote:
Originally Posted by FightingFalcon View Post
MHTX:
Dec 2003 price 0.065
Current price 0.07

HIIT:
Feb 2012 price 0.10 (oldest price I could find)
Current price 0.60

NJMC:
Dec 2003 price 0.065
Current price 0.091

With the exception of HIIT, these picks are awful if you've truly held them for close to a decade. This is why you don't individual stock.
It's my version of playing the lottery. I don't advocate this as part of anyone's personal investment plan.

My DCA for HIIT is .05 (previously traded as HWEG/SHMT)
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Old 12-29-2013, 07:41 PM   #18
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Quote:
Originally Posted by FightingFalcon View Post
MHTX:
Dec 2003 price 0.065
Current price 0.07

HIIT:
Feb 2012 price 0.10 (oldest price I could find)
Current price 0.60

NJMC:
Dec 2003 price 0.065
Current price 0.091

With the exception of HIIT, these picks are awful if you've truly held them for close to a decade. This is why you don't individual stock.
I guess if he doesn't mind "wasting" time and money - could be a fun diversion in that case. Otherwise, just because a few people consistently beat the markets, it doesn't mean you can. The odds are you'll fail miserably at it.
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Old 12-29-2013, 08:19 PM   #19
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I've been thinking about my personal finance for a couple days now and I am wanting to invest more.

Quote:
Originally Posted by FightingFalcon View Post

My 401K through work is a Vanguard Target 20XX fund that my company has managed by a third party. Can I purchase the Vanguard Target funds on my own? Or am I best keep with the 3rd party managed fund through work and find an other way to invest?
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Old 12-29-2013, 08:34 PM   #20
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Originally Posted by csperformance View Post
Can I purchase the Vanguard Target funds on my own?
Of course... you can use any investment platform (sharebuilder, etrade, etc.) to buy into to. Something like $2k minimum first purchase fyi.
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Old 12-29-2013, 08:38 PM   #21
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Quote:
Originally Posted by csperformance View Post
I've been thinking about my personal finance for a couple days now and I am wanting to invest more. My 401K through work is a Vanguard Target 20XX fund that my company has managed by a third party. Can I purchase the Vanguard Target funds on my own? Or am I best keep with the 3rd party managed fund through work and find an other way to invest?
Does your employer offer any matching?
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Old 12-29-2013, 08:39 PM   #22
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Originally Posted by FightingFalcon View Post
Does your employer offer any matching?
well two things here.. is he looking to invest more into his 401k? or is he looking to invest more outside his 401k?
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Old 12-29-2013, 08:42 PM   #23
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Quote:
Originally Posted by Indocti Discant View Post
well two things here.. is he looking to invest more into his 401k? or is he looking to invest more outside his 401k?
I find that most people don't come anywhere close to maxing their 401k so I stopped asking.
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Old 12-29-2013, 09:00 PM   #24
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Originally Posted by FightingFalcon View Post
I find that most people don't come anywhere close to maxing their 401k so I stopped asking.
I wonder, statistically, how many working people could max their 401k's comfortably.
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Old 12-29-2013, 09:43 PM   #25
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Quote:
Originally Posted by lag View Post
I wonder, statistically, how many working people could max their 401k's comfortably.
Many can't for financial reasons. Many others who could, don't out of ignorance or stupidity. Medical professionals, for example, are notorious for being idiots with money.

<- spoiled with automatic employer 401(a) contribution and the option of contributing to a 403(b), 457(b), or both. The total potential tax advantaged savings is enormous (for most of us, anyway), but hard to reach the max unless compensation is pretty high.
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