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The Coz
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Another fun week!

9/1/2022 10:15:26 AM

DonMega
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I ended up selling my stake in the former company. Thanks The Coz. I knew that I wanted to be out. If the stock kept sliding it would be a double whammy of kicking myself for not selling earlier and not really liking the company. I kept asking myself whether I was making an emotional decision (don't want to make emotional decisions around investing), but it came down to just putting this money in with my other investments and stop tracking how much I made/lost with the stock purchase program.

After I typed up that last post, I realized I was in this position before too. Back in college (2000-2004) I used to put 10% of my paycheck into Lowes stock through their employee stock purchase program. Leading up to 2008 it was going gangbusters (got up to $10k which is a fortune in those days) and of course 2008 happened. I kept telling myself I would use that money to buy an engagement ring, and when it went down to $4k I sold it and just moved it to vanguard and lost track of how much was from Lowes and how much was just from regular saving. Peace of mind was worth it even when compared to the 10x increase in Lowes stock from then (over the next 15 years). I have no clue how much the vanguard investments went up, and I don't really care.

I guess history does repeat itself?

I'll post back here when RPD shoots through the roof and hopefully still be OK with my decision.

9/6/2022 9:42:56 PM

The Coz
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Good job!

Such moves can be very hard, but you're right to make it unemotional.

My suggestion is don't even look at it until it's been so long you truly don't care. I'm done agonizing over single stocks. That's the fallacy. It's easy to say what you should have done after performance has been laid bare. But of course in the moment, there's no way to know. You've got an equal or greater chance to be wrong. Those mistakes can be extremely costly. Learn to be satisfied with "good enough" and you'll do much better than average over the long term. You don't have special insight. If you do particularly well, you got lucky.

9/6/2022 10:33:11 PM

bellrabbit
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Wilkinson's got a bite one a new one...Petramco Corp. Out of, uh, Springfield I think. They're about to introduce some sort of robot butcher.

9/15/2022 8:43:08 AM

The Coz
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If you want to get in, there's very little time. . .

9/15/2022 9:34:29 AM

Money_Jones
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Well Big Daddy, how much did you clear there on your little transaction?

9/15/2022 9:39:32 AM

The Coz
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I don't like to discuss figures.

9/15/2022 1:47:37 PM

bellrabbit
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I don't know, what? Eight thousand. It's a Hyundai!

9/15/2022 3:39:11 PM

The Coz
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I told you not to sell. Simons made money, . . . Wilkinson cleaned up. . .

9/15/2022 7:03:52 PM

anonymous
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I know you tend to advocate for just buying more as the market continues to dip....
But do you ever consider cashing out of stocks all together for a short/medium term to drop money in to bonds, or real estate or other investments that are guaranteed to earn you interest, and then take that profit to buy even more in the market?

9/24/2022 10:07:09 AM

The Coz
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No. That's a great way to lose a lot of money.

Seems like it would work on paper, but you have to be right twice. You might sell at the low point and then it only ever goes up from there. Many people who do what you suggested are not comfortable getting back into the market once it's on the upswing, fearing a false rally or another impending drop. Further, if you are investing in a taxable account, then there are significant tax considerations from cashing out entirely. Short-term positions might be down ~20%, but what about the shares I purchased in 2008 and 2009? Despite the recent moderate pullback, they remain up in a big way and would be subject to capital gains tax while actively employed, meaning I would pay a higher tax on redemptions than if sold at a different point in life.

I am trying to separate investing from behavioral errors and avoid the stress of having to decide what is optimal to do all the time (never actually knowing the future), and then second-guessing or regretting decisions after the fact. Automation and steady investment avoids that whole game. Of course, all-in-all I'd prefer to see the market go up, but at times like this, I just look at what it does in a given day and say, "Oh well!"

The strategy I follow suggests that you pick an asset allocation (inclusive of bonds, real estate, or cash if you desire) that you can accept through any historical market trends, and then invest new funds as they are available to keep this target asset allocation balanced, or either to manually rebalance approximately once a year if there are large swings through growth or loss of any one asset class. Bond funds haven't been spared from some carnage in 2022. They are down as well due to rising interest rates, but less of a percentage "loss" than stocks. Cash continues to lose purchasing power to inflation. Physical real estate is an additional chore and not always quickly fungible. Public commercial real estate is included as a portion of total stock market funds, but I guess you could choose to overweight with REITs if you want.

I'm not saying what I do is right for everyone, but you're not the first person who's had the idea to go to cash. Just realize it's not as easy or obvious as it initially appears, and that many people who try to execute that strategy will do worse than had they just rode it out in the market.

That said, if you're still interested in an FDIC-insured high yield savings account with no maximum monthly withdrawal / debit count imposed, Marcus bumped up to 2.15% this week at baseline (and expected to go higher soon given Fed moves), and if you sign up from a referral link, then they will juice it by an additional 1% for 3 months, giving you 3.15% on totally safe cash (would also increase automatically within the 3-month window as the base rate increases). PM me for a referral link if that's of interest. I still keep cash (partly in Marcus), and while I wouldn't sell out of stocks and go to all cash as discussed previously, letting additional cash accumulate during times of uncertainly is fine as long as you fully realize it's still losing to inflation. In the case of a declining market, losing less is preferable to losing more.

9/24/2022 12:41:22 PM

David0603
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"No. That's a great way to lose a lot of money."

9/27/2022 9:34:32 PM

The Coz
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^Executive summary.

9/27/2022 10:28:49 PM

The Coz
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Who still got diamond hands?

Riding that sweet BBBY, AMC, and KOSS action!

10/11/2022 7:53:47 PM

The Coz
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Anybody else interested in a Marcus High Yield Savings Account referral? Promotional rate just expired. Rates are still competitive with peers at 2.35%, but money market starts to look relatively more attractive. Marcus still works well as a hub account.

10/19/2022 11:17:45 AM

CaelNCSU
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Expect the S&P to go back to precovid levels. My gambling account with random stock is down about 80%, my 401K has lost about 2%, because you can't time the market.

10/26/2022 4:00:46 PM

CaelNCSU
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I do wonder what market sentiment will turn things around. Darlings of the market like Uber turned out to be scams, self driving cars still aren't a thing. Tech is no longer thought as a democratic force to empower small business.

What's the hope/vision of the future that would rally the market? Without QE.

10/26/2022 4:24:11 PM

The Coz
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Bold prediction, my dude! The stock market will recover one day! Damn, wish I thought of that. GG on -80%, though. Losing money is fun. Think how many COVID vaccines that could have paid for.

10/26/2022 6:56:41 PM

bellrabbit
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Just widen the time range when looking at your 401k. If I look at just the last two years its depressing, but if I start at like 2017-18 I'm still up like 30% overall.

10/28/2022 4:21:05 PM

CaelNCSU
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I'm up majorly in my 401k over 2 years because I cashed it out when s&p was still 4400. I just bought back in 10% on Thursday. You can't time the market.

I work at a FAGMAN company and most of my coworkers are down over half their comp packages. Every one of FAANG currently has a hiring freeze. I was still interviewing people a month ago. Now it's completely locked down as we reshuffle people and there is an acknowledgement at.the C suite level that shit is about to be real bad.

Friends at Meta are down like 80% on their RSU value. Some of these people have massive mortgages they've depended on the stock comp to live off. Seeing a lot of reddit comments in /r/REBubble cheering people losing livelihoods. People mega salty a lot of people got rich off that sweet sweet low interest rate stock compensation.

[Edited on November 5, 2022 at 2:57 PM. Reason : A]

11/5/2022 2:55:54 PM

The Coz
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You hate to see it. . .

11/5/2022 3:42:32 PM

CaelNCSU
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I mean most of my comp is now tied up in FAANG stock, so why would I not hate to see it just looking at it from purely self-preservation as a garbage person?

Not mentioning most of the people I know are also based and hate people like you so I wouldn't want anything bad to happen to them either.

11/5/2022 3:53:26 PM

The Coz
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Maybe if you didn't troll here all the time, I'd have a different assessment based on your anonymous internet persona. Truly we only can judge based on what we observe.

11/5/2022 4:01:21 PM

mkcarter
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wow. post CPI move is historic. lows of year are in?

11/11/2022 5:20:16 PM

The Coz
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Make sure to buy AFTER price spikes!

11/11/2022 7:07:12 PM

emnsk
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I have like a spare 50 dollars and am thinking of getting some practice with stocks by like treating each dollar out of them like it's worth quite a bit and putting it in
of course i could do a simulator but here i can feel the joy of earning a few pennies
I wonder what the commissions are though on stock platforms cause that could just make this a dumb idea

11/12/2022 9:15:18 AM

emnsk
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nevermind that last comment, looks like my idea of fixed commissions on trades isnt really a thing on mostpopular trading services

11/12/2022 9:30:59 AM

The Coz
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Put $50 into fractional shares of VTI at your broker of choice. Then save more money and do it again. Select automatic reinvestment of dividends. Never sell.

Automatic investment in mutual funds is easier, but the mutual fund equivalent of VTI -- VTSAX requires $3000 minimum to establish the initial position.

11/12/2022 11:12:08 AM

emnsk
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what do you think about more industry specific ETFs
I assume theyd be less safe, but in case I have some particular inclination

and for VTI, do you think it might be better to just save up and buy an entire share, causw I heard something along the lines of that fractional shares once bought cant combine and must be sold entirely. so if I do plan to buy more VTI later, might it be better to buy in complete shares itself

11/12/2022 11:49:15 AM

The Coz
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If you think you have some unique insights and can out-guess the professionals, you can try to pick winning sectors, but despite people getting lucky, this is loser's game and it's more likely you're going to get crushed at some point, or at the very least underperform.

Buying in whole number shares might be cleaner, but also depends on what kind of account this is going to be. Will it me an IRA or a taxable brokerage account? If taxable, then you have to consider the cost basis accounting method and whether you want to create individual tax lots for all buys. If you use Specific ID as the cost basis method, lots of fractional shares MIGHT cause some small difficulties, but if you use Average Cost, I think they'd all get mixed together. You might have to sell only whole numbers of shares, but you wouldn't end up with a lot of orphaned fractional shares (only one if selling your whole position). You have the right idea in expressing interest, but you should probably read more, save up a bigger balance if you can, and commit for the long term. Day trading may sound fun, but it's mostly just gambling. Think in terms of decades, not days or hours.

Go to bogleheads.org and read on the Wiki and on the forum. Free to register and ask questions if you want, but MUCH harsher moderation. Don't get your financial advice from YouTube.

11/12/2022 2:32:38 PM

emnsk
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Ok, I'll check it out. Thanks for your help man, appreciate it.

And on the topic of taxes, damn, life just really got more complicated.
Also, hypothetical, if I never filed taxes and never started, how would the government know? hmm but youd probably need to use tax returns as a verification for loans or something I assume so yeah rip

11/13/2022 4:27:45 AM

The Coz
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They know if you have income that is reported to the IRS on a W-2 form, or if you have interest, dividends, or capital gains that are reported by a bank or broker on a 1099. If you make money through work or investments, you are supposed to file an income tax return. If it's all cash and off books, then they don't know, but legally you are still supposed to file. If income is low enough, you won't actually owe any taxes on it. Filing taxes isn't hard. Almost any idiot can do it themselves with TurboTax. This idiot has been doing it since tax year 2007, I think. I actually kind of look forward to it. Not the paying of the tax, but the process of completing the return. The software kind of gamifies it. Usually no good reason to pay someone else to do your taxes for you unless you have a very complicated situation. Would be nice if good tax filing software was free, but the government seems to have agreed not to step in on Intuit's turf. There is a typically a single-day sale of TurboTax on Amazon between Christmas and New Year (specific day varies) where the TurboTax software drops to its lowest effective price of the year. I said last year that I would make a thread about it this year when it hits to help out my TWW brethren, and I will.

Meanwhile, you should read this free 14-pager PDF "book" if you are that green. Personal finance isn't the most exciting subject to most, but it's one of the most important to your long-term quality of life, and time is your greatest asset. Most people would be well-advised to take a greater interest in it. The sooner the better. Assuming you're really a student of typical collegiate age, the timing is ideal. Don't wait, as you don't get back lost time and lost years of compounding. If you have earned income, you should open a Roth IRA as soon as possible (at least before Tax Day in April 2023, but ideally before the close of calendar year 2022). It's not as complicated as it sounds, and more valuable than almost anything you'd learn in school. Don't put it off.

https://www.etf.com/docs/IfYouCan.pdf

11/13/2022 8:31:33 AM

The Coz
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Also, don't mess around with a fintech startup or gimmicky broker. Go with solid brokers / asset managers with a proven track record. Vanguard, Fidelity, and Schwab are often considered the top tier in this regard.

11/13/2022 11:01:44 AM

emnsk
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I had thought of looking into all this but kept putting it off... not anymore.
Thank you, The Coz.

11/13/2022 12:49:14 PM

The Coz
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You'll thank yourself later!

11/13/2022 12:56:14 PM

CaelNCSU
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Bought a bunch of shit at all time lows. Remember when it goes down 90% it can go down another 90% for a full 180%.

11/15/2022 11:09:05 PM

mkcarter
PLAY SO HARD
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made $483 trading futures this week. pretty neat.

11/16/2022 5:14:08 PM

StTexan
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^^

11/16/2022 9:10:04 PM

The Coz
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'Sup?!

11/30/2022 9:28:15 PM

The Coz
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Regarding my previous commitment to notify about the one-day annual Amazon sale on downloadable TurboTax, see the thread linked below:

https://www.thewolfweb.com/message_topic.aspx?topic=653042

12/28/2022 9:23:48 AM

The Coz
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Who still hodling BBBY? Good day out there today. A sweet -22.5% return on a day the broad market was +2.2%.

YOLO!

1/6/2023 10:35:19 PM

emnsk
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I'm finalizing my decision, but about to buy 1 whole VTI this weekend and make my first step into personal finance

1/12/2023 7:21:56 PM

The Coz
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It's a good call! I should have started as soon. If you have earned income, put it in a Roth IRA.

Buy VTI within a Roth IRA container, I mean.

Also, you cannot purchase ETFs on the weekend. Only during market hours (9:30 AM to 4:00 PM on non-holiday weekdays). Thus, you can buy on the upcoming Friday or Tuesday (because of MLK). You might be able to schedule a future order over the weekend, but if it's a market order it will execute at next market opening when there is a lot of volatility. Better to buy during lunch or maybe toward the end of the trading day once trends are clear.

1/12/2023 7:25:11 PM

emnsk
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Oh yeah, forgot about that.

One question. If you buy during market hours, does it automatically execute in a split second, or like can there be a delay of an hour or so? And if there is a delay or whatever, do you get it at the price you initially clicked to buy it at or whatever?
Might be a dumb question, but just wanna make sure.

1/12/2023 7:54:38 PM

theDuke866
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the short-ish answer is that, for most stocks (i.e. not super thinly traded), in the amounts most everyday people would buy (i.e., a drop in the ocean), it will generally execute in a split second if you place a market order.

...and the vast majority of the time, it will then be at or very close to the price you clicked to buy it at.

...but I generally don't do market orders, because you are taking a chance on some big price jump in between when you set up the trade and when the order executes. The way to solve this is with a limit order, a stop order, or a stop-limit order. In this way, you ensure the trade is executed at (or better) than the price you specify...but there can be a delay (or it may not get filled at all).

1/12/2023 8:15:06 PM

The Coz
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For buy-and-hold, I just do market orders when I do them, but much more commonly it's just mutual funds on auto-pilot.

1/12/2023 9:14:18 PM

ElGimpy
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You should be fine with market orders the vast majority of the time, especially on ETFs, unless you're the richest motherfucker I ever met, and they should fill almost instantaneously as Duke said. But also as he said, there's not much risk in setting limits, just takes a tiny bit more effort to put in and then track to make sure the stock didn't jump your limit before you pressed trade.

Here are the times any of us should be worried about a stock moving too much off of what you see:

- something higher priced like say, TSLA. The overall value of what you're looking at might not change that much so you shouldn't care about the pennies involved in the end, but if you do, it's going to jump around a lot within a 10 to 50 cent range frequently just because it's over 100 bucks
- anything with 5 letters, especially if it ends in F. These are often ADRs for foreign companies, or in the case of the latter, US listed names for foreign companies that trade in the pinks. If you're looking at something with 5 letters you should check the volume on it from that day or the day before. If it's traded less than 100k shares be wary and use limits, if it's traded less than 50k shares you really need a limit as you could possibly push the stock with your tiny order. You also should check the spread on something with low volume. Just because you see something is listed at X doesn't mean a market order will buy it there, that's just the last price it traded at. For instance, BGSF (small cap staffing company) has a last price of $15.875, but if you drill in you'll see the lowest offer is $16, meaning if you put a market order in for that right now you'd buy it at $16

There are always exceptions. I've seen ETFs that had extremely low volume, and there are plenty of 5 letter names that trade a bazillion shares a day. A safer way to be careful is to just always look at the volume, and if you aren't confident about how big a number that should be use limits

[Edited on January 13, 2023 at 12:58 PM. Reason : asdf]

1/13/2023 12:50:35 PM

emnsk
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this place rocks man

1/13/2023 5:07:57 PM

The Coz
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Old people know stuff. The hard part is knowing which old people to trust in advising you on your financial future.

VTI has massive trading volume, and it has 3 letters. One risk of limit orders is that sometimes they don't trigger and you therefore don't buy. But when you are investing for your retirement, who cares about a few pennies on price today when your time horizon is 30-40 years minimum? When I make a decision to buy, I want to buy. That's why I use market orders. Limit orders are better for short-term traders who care about day-to-day or even intraday price fluctuations. Make sure you understand the critical difference in investing styles. This admittedly natural human tendency to fiddle around and play games with orders for intended long-term hold investments is one of the behavioral errors avoided by automatic investment in mutual funds. Eventually the same will become common with ETFs, but it's not there yet.

emnsk, did you buy today?

1/13/2023 5:53:09 PM

emnsk
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I'm gonna do it on tuesday, I'm gonna take the time to see how that roth ira with vti works tonight
On the side of long term investing do you do any, well might come off as an oxymoron, but relatively "short term investing" for more immediate returns

[Edited on January 13, 2023 at 6:39 PM. Reason : t]

[Edited on January 13, 2023 at 6:40 PM. Reason : t20]

1/13/2023 6:35:34 PM

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