The Official M6G Investment thread

[Cobra Jet]

For the folks on this site who are involved with Financial Planning, Stock Market or Day Trading:

What can be recommended to M6G members as far as good leads for those looking to invest?

If some M6G Members are already vested in (X), what is it:
Stocks
Bonds
Mutual funds
Real Estate (properties or land)
CD’s

I have/use the App called “Seeking Alpha” and watch a ton of Stocks - kind of been using it as a potential “if this were my investments” platform for research, before actually making a jump.

What are some other or better Apps?

Already have 401, but as everyone else, company sponsored 401’s come with only a small selection of funds to choose from which are prebundled. Some 401s have the option of allowing brokerage accounts (owner is able to move some of their accrued 401 $$$ into anything on the NYSE - at which point the owner assumes that risk).

Post up!

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[Shifting_Gears]

I’ll be following this.

Currently just my company 401 plan. I started with a target retirement date plan which automatically starts stock heavy and moves to more stable investments over time. However, I am able to elect my own investments and have been deviating from that. We are also doing an employee stock purchase which I am investing some in, and with that I’ll have a brokerage account and can use that to do personal investing. So I am trying to find a good starting point.

 

[Bran2TheDon]

I also just have 401k. My company offers the option to put X% of your retirement into a stock and gamble with it. I chose just to do mine in all 100% fixed as I know nothing about it well enough to be throwing my money away.

 

[Bull Run]

I recently subscribed to Barron's and found that while I like to follow the market in general, I don't like keeping up with individual companies, so I'm sticking with index type funds and ETFs. I'd consider investing in individual stocks as gambling unless you follow that company closely.

I highly recommend reading "The Bogleheads' Guide to Investing" as even a professional fund manager can't beat the market consistently over the long term, so us retail investors almost have no chance with picking individual stocks or day trading.

https://www.amazon.com/Bogleheads-G...t=&hvlocphy=1013387&hvtargid=pla-433358459400

For retirement accounts like 401K, TSP (similar to a 401K for government employees, with a very low expense ratio. I can contribute my Army Reserve/Nation Guard drill pay into it.), and back-door Roth IRA:
S&P 500 Index Funds (~50%)
Med/Small Cap Funds (~15%)
International Stock Funds (~15%)
Corporate Bond Funds (~10%)
Fed Government Bond Funds (~10%)
Army Reserve pension (starts paying when I'm 58 years old, 60 - 2 years of war zone deployments)

If your company's 401K sucks, contribute just enough to max the match then max out the IRA, before maxing out the 401K.

I keep taxable bond funds in my retirement accounts since they aren't tax efficient. I only have ~20% in bonds because I'm still decades away from the traditional retirement age and I consider interest saved from paid off the mortgage as a bond-like return, so I can afford to take a little extra risk. Whenever I leave a company, I rollover their 401Ks into the TSP. I only contribute enough to my company's 401K to max the match (4%) and put most of my drill pay into the TSP. I usually exceed the max allowable contribution by a few hundred dollars at the end of the year, so I do an excess contribution withdraw before I file the tax. You don't pay an early withdraw penalty for the excess contribution withdraw, but you do pay income tax on the contribution and any earnings. My wife's a SAHM since my daughter was born, so she doesn't have any 401Ks to contribute, but we do max her Roth IRA as well.

Non-retirement accounts
VTI, Vanguard Total Stock Market ETF (ETFs are supposed to be a little more tax efficient than the mutual fund version, thus going with the ETF for the non-retirement account)
A small amount of Disney stock (bought some shares to teach my 8-year old daughter about the concept of equity ownership, got lucky with the recent boost)
a moderate amount of company stock from ESPP and vested RSUs (I contribute 10% to ESPP, which is the max, and I got RSUs as a part of the hiring bonus and annual retention bonuses. RSUs vest at 33% per year). I've been selling them off here and there but still have a quite a bit as the share price more than tripled since I started
May add muni-bonds later

Real-estate
Paid-off primary residence (The interested rate was only 3.25% but I wouldn't be deducting it due to the new tax law. For my tax bracket, I need to earn around 4.7% pre-tax to match 3.25% after-tax return, and no savings, CDs, or bond can guarantee that rate of return. Yes I could've earned more by keeping the mortgage and plowing into the stock market but I already max out my retirement accounts and contribute at least 10% to non-retirement accounts, so I don't need the extra risk.)
We had a couple of rentals before but decided that I didn't want to be a landlord.

529
AZ allows up to $2000 per person deduction for the 529 contributions, so we contribute $4000 per year to maximize it. Should be enough to pay for a good public university at this growth rate.

Checking and savings
2+ years worth of emergency fund in a savings account (used to be 6 months but it's effective duration grew as I paid off various debts. Yes, I could be little a little more interest by CD laddering, but at this point, I'd rather have simplicity than earning a little bit more)
$10K buffer in the checking (I don't write large checks or do large automated withdraws but I don't have to keep a close eye on the checking account even on a bad month with this level of buffer)

 

[Docscurlock]

I agree totally on the low cost Vanguard mutual funds. I usually stick (because of my age) to a mixture of growth and balanced index funds. I usually try and stick to just a few funds so I can have more in each to take advantage of higher balance admiral funds. Some small cap and medium cap funds also. Trying to time the market and make money with individual stocks is very risky. It can be fun to play with but I would never do it with money I can't afford to live without. I remember reading an interview with Warren Buffet and he was asked if he was to invest his mother's life savings, how he would do it. He responded that he would put it all in a Vanguard S&P 500 Admiral fund and leave it alone. Jimmy Buffet was asked the same question and responded something about flip flops, pop tops and tequila.

I went a little different direction with my house, I put myself on a 9 yr payment plan and put the money in my retirement instead of paying it off. Besides figuring just simple interest + inflation you have to look at possible dividend returns and take the benefit of compounding interest. By the time I pay off my house, God willing, my retirement will be fully funded and I can walk away from the rat race. It also keeps me from buying too much crazy crap if I have a big monthly bill to pay. A little forced self control.

 

[Bull Run]

I remember reading an interview with Warren Buffet and he was asked if he was to invest his mother's life savings, how he would do it. He responded that he would put it all in a Vanguard S&P 500 Admiral fund and leave it alone.

Funny you mentioned that interview because Barron's just had an article about how he's been trailing S&P 500 recently. And he's a legendary investor!

[QUOTE="Docscurlock, post: 2533631, member: 38241"I went a little different direction with my house, I put myself on a 9 yr payment plan and put the money in my retirement instead of paying it off. Besides figuring just simple interest + inflation you have to look at possible dividend returns and take the benefit of compounding interest. By the time I pay off my house, God willing, my retirement will be fully funded and I can walk away from the rat race. It also keeps me from buying too much crazy crap if I have a big monthly bill to pay. A little forced self control.[/QUOTE]

Agreed 100%. I recommend prioritizing maximizing the retirement accounts first before attempting to pay off the house since you can only put in so much per year, and you can't go back to make up on the tax deferred/free growth. Besides, you're already ahead of the curve with the 9 year plan since Freddie Mac reported that in 2017, 90 percent of homebuyers chose the 30-year fixed-rate mortgage.

 

[Cobra Jet]

Bull Run - wow, great response and info!

So how does one consider their 401k’s “target date” funds? For instance and totally hypothetical example, say the employee is 40yrs old and their available 401k target date funds start at “2035” and ends with “2050”... Does the employee choose the target date in which they think they might retire, or ?

———
This may be a dumb question, but has anyone vested in “Sin Stocks”?

 

[Docscurlock]

You should be able to provide input to your employer ran fund through a financial adviser into how your retirement is invested. It's worth talking to them, I would never trust them blindly. Depending on your age, investment goals and aversion to risk mutual funds are a way to diversify your portfolio without having to pick individual stocks and bonds and micromanage them. The fund manager gets paid to do this and should try to mange well. Like I mentioned above, individual stocks can be risky and require you to pay attention when you would much rather be watching TV or driving your mustang. Sin stocks are another speculative investing tool, again, I only play with money I can afford to lose and I can think of a lot better things to do with my spare time.

As far as advice to younger individuals, the one thing I wish I would have done earlier is to start my retirement. At the time (in my bullet proof youth) retirement seemed a long way off and money can be so fun to buy stuff with. I can't stress the benefit of compounding interest in retirement funds. There are free compounding interest calculators available on the net. Input 25 or 30k and set it to 8.0% interest which is average returns in mutual funds and set it for 20 or 30 years. Its amazing how much it will grow, you can also try to find funds which pay dividends which will help your nest egg to grow also.

Set it and forget it is not a bad way to go with savings, trying to micromanage can be risky. As Bull run stated above, even Warren Buffet the legendary investor often trails the S&P 500 average.

 

[Bull Run]

So how does one consider their 401k’s “target date” funds? For instance and totally hypothetical example, say the employee is 40yrs old and their available 401k target date funds start at “2035” and ends with “2050”... Does the employee choose the target date in which they think they might retire, or ?

The plans I've seen so far allows employees to choose their own target date funds. So someone who's 40 years old and expecting to retire at 65 should be choosing a 2045 fund, although earlier or later dated funds can be used depending on the risk tolerance. You'll need to look at the perspective of each of the funds as the amount of risk taken may differ between companies.

An article after the 2008 crash: "But what was especially troubling, according to Idzorek, was the disparity in performance among funds for those in or near retirement. Target-date funds designed for those retiring in 2010 -- next year -- were all over the map. The best of the 31 funds with 2010 in their name fell 3.5%, while the worst fell 41.3%."

https://www.marketwatch.com/story/questions-arise-target-date-funds-after

 

[Bull Run]

As far as advice to younger individuals, the one thing I wish I would have done earlier is to start my retirement. At the time (in my bullet proof youth) retirement seemed a long way off and money can be so fun to buy stuff with. I can't stress the benefit of compounding interest in retirement funds. There are free compounding interest calculators available on the net. Input 25 or 30k and set it to 8.0% interest which is average returns in mutual funds and set it for 20 or 30 years. Its amazing how much it will grow, you can also try to find funds which pay dividends which will help your nest egg to grow also.

That's a piece of solid advice right there and I also wish that I maximized my retirement accounts when I was younger. Sure, you can save more later, but outside the yearly contribution limit, you'll have to put them in taxable accounts with tax impact.

As for "sin" stocks or sector specific stocks in general, my recommendation is to limit them at no more than 5% of your portfolio.

 

[95CobraR]

I am a SEC Registered Investment Adviser but now consider myself as a private investor.

I say most guys that work should stay in low cost index funds. The ordinary index fund is up over X Four since 3-9-2009 (with dividends). That is a quadruple. You must also save all of the available tax-deffered money in your 401K, IRA, or government plan that you are allowed to do.

I like a few stocks in which I read the annual reports and understand the business. I would caution against this without doing a lot of research. I also like short term A+ rated bonds since higher rates can kill you in a higher rate environment.

The market went down today by ~2.0% which happens a lot. No problem.

If you save at least 10% of your income and stay safe in your investments, you will have a great early retirement. Stay focused and do not get a divorce (aka, give a chick half of your money)..

I bought my only wife a new Mercedes last year.

 

[Bull Run]

Read an interesting article today about what people think is the amount of net worth required to be considered "rich". Perhaps this is a good conversation starter to determine how much's enough? Of course, your age and cost of living for the area matters but I do think $2.3 million net worth will provide a very conformable retirement for most people in a medium cost of living area.

"In Charles Schwab’s annual Modern Wealth Survey, the amount people said it took to be considered rich averaged out to $2.3 million. That, the company said, is “more than 20 times the actual median net worth of U.S. households.”

https://www.bloomberg.com/news/arti...ch-money-do-you-need-to-be-wealthy-in-america

 

[95CobraR]

Read an interesting article today about what people think is the amount of net worth required to be considered "rich".

I think net worth in NYC is a lot different than in Sandy Springs, GA.

The OP asked for investment advice:

It's been a difficult week if you watch the business news. I say ignore it.
First: TINA which means that that "there is no alternative". Someone else invented this slogan a long time ago. It means 10-Year U.S. Treasuries are around 2.4% and locked in for for 10 Years.

So, the only other alternative is to buy stocks that give you a growing 2% dividend for the next 10+ years.

I own 70% in equities (mostly U.S. but some foreign) and 30% in short term Treasury bonds.

My main stock holding is in VTI and VEU which are index ETF's. I own SHY and BSV ETF's which are safe bonds.

The best time to be aggressive is when no one else is. The best time to be negative is when everyone thinks stocks are Magnetic (OK, that is my color of my new car).

Your future net worth will depend on the decisions that you make today.

 

[Cobra Jet]

If you’re wondering about the Stock Market lately - it’s NOT 100% validity that the coronavirus by itself is causing markets to swing drastically...

Here’s some reading:
https://www.bloomberg.com/news/arti...reedy-traders-are-shaking-up-the-stock-market

 

[Docscurlock]

If you’re wondering about the Stock Market lately - it’s NOT 100% validity that the coronavirus by itself is causing markets to swing drastically...

Here’s some reading:
https://www.bloomberg.com/news/arti...reedy-traders-are-shaking-up-the-stock-market

My advice is to keep and hold at this time, too late to get out before the drop.

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