Your investments

Do you guys have a Skype group or something? cba to scroll through all posts, just came to final page. if so, add me to it I'd love to gain some more knowledge on investments.

 

Naw fam but I'm on the computer 6am-1pm or at least by my phone

 

nah, but my skype is live:supersythe if you want to create one

 

Mines Justin.sythe1

 

I've just started looking into stocks, shares and general investment finance this year. I don't like to take risks - I've come to a decision to buy shares in big corporations that are diversifying the services they offer to remain industry leader. One company that has stuck out to me is Google as a good stock to buy for long. Anyone disagree?

The way I see it they have projects that although are not extremely profitable now, as technology advances they could literally take over the tech world (AI is being heavily invested in and talked about in recent times) and the stock has remained relatively stable over the years and steadily increase.

The way I've analysed it is the stock is quite stable, it's gone up steadily over the years & I see a huge potential for this company in the future

Am I analysing the data correctly or is there something I'm missing? Am I looking at the right characteristics?

When looking into buying stocks what do you guys look at in a company?

Apologies if I seem a bit dumb, not been into finance for very long but it's really grown on me & I would like to learn more.

 

Added you both.

Anyone else interested PM me or add my Skype. Might be able to make this a thing.

 

That'd be cool. I didn't watch the market very much over break and it's costing me a lot of money right now. My family is not very happy with me, haha. Also I can share my subscription to the WSJ

 

Awh I should of asked you before purchasing mine :nuts: I got mine with student discount though so it's somewhat cheap for the initial subscription.

 

everyone does analysis in their own way. my strategy last year wasn't terribly dissimilar; i bought shares of several large firms that (essentially) i didn't see disappearing in the next year, and that panned out okay. but there're all kinds of quant things, both rational and extremely exotic, you can get into if you like. though it should be said there's no "right" way of picking investments for everyone; if there were, we'd all do it, and investing wouldn't be profitable

 

Agreed. I invest very "Warren Buffet." I invest in goods I use, see used a lot, and have a good feel of when I go into their business. I like to invest in companies that I like and that when I visit their store I see good things happening. Of course, I have to like the technicals too - but it's a place to start. For example, after christmas I went shopping with my girlfriend and she dragged me into Kate Spade. It was un fucking real how much foot traffic they had and how well they were handling it. I went next door and Michael Kors was empty. I'm now watching Kate Spade very closely and when I find the right technical time to buy, I think I will.

 

Any opinions on RUS (TSX)?

 

I work in personal financial services.

Impossible to give good, objective over the internet but some basic advice:

In your 20s and early 30s take advantage of roth contributions. Preferably a Roth IRA. That is the most tax advantaged investment you have access too.

Take advantage of a 401k if your company offers a match, up to the match %.

Open a brokerage, invest in some 60/40 Equity/Bond portfolio. This gives you some liquidity that the retirement accounts don't give.

And depending on your income and age there are more advanced strategies but those are too complex for an internet conversation. Speak to a financial advisor. I'd recommend an independent firm that can offer objective advice.

 

Don't just talk with any financial advisor. Realize that if you're not working with a fiduciary, you're a sucker who deserves to lose money through ridiculous fees.

Also the 60/40 distribution is nonsense. Anyone worth their salt knows that.

 

60/40 is not nonsense. It is intended to decrease your market exposure in a taxable short/mid term investment account.

You should have plenty on market exposure(depending on your age) in your retirement accounts. Because those are long term investments, you should be much more heavily weighted towards equity.

In a brokerage, you want a more stable investment to offer you more liquidity in case you need to pull money from it for expenses such as a home purchase.

It does not make sense to be in that much equity for a brokerage because you will be subject to capital gains tax on all the growth. Take that risk in a retirement account to reduce your cap gains tax.

 

In HS years ago we had a business class with a pretend stock market and gave us $100k. It was synced with the real stock market prices, but obviously not real money. My little team made $20k over the course of the year. Pretty much luck. I heard that one team made over $100k one year.

 

It's nonsense because anyone can google wealth management strategies and find the 60/40 strategy themselves without needing a professional advisor. There is literally no reason to charge a fee for it. It's nonsense because it proves the advisor doesn't understand what he's doing. There is an objective function that needs to be maximized subject to several constraints, and there is no reason why one would expect that 60/40 is the appropriate solution. In fact, why should it be a split between typical equity and fixed income products? Why not include hedge funds or perhaps explore factors with smart beta products?

The 60/40 strategy is just a shoddy recommendation based on the notion of the population's average risk aversion coefficient.

 

So you're saying 60/40 is a viable investment option, but there's no reason to have an advisor for it?

There's no reason to have an advisor if you have the: knowledge, time, will, and organizational skills to manage your own money. Most people can obtain the knowledge but dont have the time and the will to consistently keep up with the market and monitor their accounts.

Why does a 60/40 portfolio not include hedge funds? Are you serious? We are not investing in speculative investments. There reason why fixed income is a part of it is to lower volatility. YOU WANT LOW VOLATILITY IN A TAXABLE MID TERM BROKERAGE ACCOUNT.

A 60/40 fund is an investment designed to lower volatility and give you liquidity in your portfolio. It fits perfectly into a taxable brokerage account.

It is much more advantageous to take more risk and invest into more equities in retirement accounts such as a roth ira or a 401k.

Financial planning is not black or white. A 60/40 portfolio fits a solid niche in someones overall financial plan. Obviously I would not put all of my money into that if I was in my 20s.

 

I'm saying that a 60/40 generic strategy is almost certainly not the appropriate portfolio for anyone. You can almost certainly do better. Again, as I said, there is an objective function to maximize subject to several constraints. Why would you expect a generic 60/40 blend to be the optimal solution?

You don't need time, intelligence, etc. to run a 60/40 strategy. If you really can't be bothered to set up an account yourself, then go use a robo-manager which will do it for you for far lower fees than some run of the mill advisor.

"We are not investing in speculative investments." Every investment is speculative by definition. You're making a bet in some direction, and someone must be making a bet in the opposite direction. That's speculation. Period.

Not all hedge funds are highly volatile. But really, who cares whether the fund is volatile or not? In a properly diversified portfolio, what matters is covariance rather than variance. For example, if you have two funds that are extremely volatile but have perfect correlation, you could combine the two funds and end up with a portfolio that has absolutely no volatility.

My original point remains. If you need an advisor, use a fiduciary. Understand the fee structure. If they suggest some generic strategy, run far far away. They either don't know what they're doing or are not acting in your interest (i.e., they're collecting fees for services that add no value).

In addition, understand that you will never find good financial advice from a human (i.e., advice in your interest and worth the fees) unless you are a high net worth individual. If you aren't high net worth, just go with a robo advisor. Whatever you do, don't go to some Edward Jones type shack on the corner of wherever. Go to a top ranked RIA, a solid team within a bulge bracket bank, etc.

 

All really depends on your level of comfort. Bonds are primarily used for capital preservation, and provide "smoother returns". A pure stock portfolio will have more volatility from year to year, but over long periods (10+ years) of time will outperform a 60/40 portfolio.

 

I would strongly advise against a 40% bond allocation in your portfolio. In fact, I probably wouldn't suggest putting any money in bonds, certainly no more than 10%, even in 'good' bonds. Corporations or institutions offer bonds for their financing purposes. They pay a yield on these bonds. This yield is tied to the interest rate. Interest rates are at historic lows Bonds with relatively higher yields are typically referred to as 'junk bonds', and are generally quite risky, and you are likely to lose the whatever amount you paid for the bond; however I have no comment on a diversified portfolio of junk bonds. What you're left with then is bonds with relatively low yields (as they are less risky; and the interest rates are low).

If the interest rates rise, then your bonds will fall in value (as few people will buy them), and the yield on them will remain very low. This is because bonds and interest rates have an inverse relationship. Again, interest rates are at historic lows. The question then becomes what else you can invest in, the dominant opinion being the equity market.

Stocks typically pay dividends to their shareholders. This dividend payout ratio far exceeds the yield you would receive from quality bonds. If you reinvest your dividends, overtime your portfolio will increase substantially as a result of compound interest. If you elect to use your dividends at least partially as income, then you will receive a larger income than bonds, and your stocks should (depending on what you buy), over a long period of time, average an increase in capital growth relative to any yield you would receive from bonds. The only "problem" here is the additional risk factor, bonds are less risky because the returns in the future are known, and if you buy high quality bonds, the return is predictable. The return on stocks however is unpredictable, dividend payout ratios change, stocks prices fluctuate, the underlying value of a company changes, and the world is in a precarious financial position at the moment imo. Having said that, historically you will see greater returns in the equity market than the bond market, you should have no trouble with liquidity (if you plan your dividend receipts properly), and the stock market now is not particularly risky over a long period of time. If you don't want to do your homework to select your own shares, then put your money in a low-fee diversified fund, or an index-fund.


I would really question any financial advisor's advice on a 40% bond allocation, even for someone that is older. Shares via dividends offer liquidity, and more of it than bonds. Interest rates are at historic lows. Stocks experience capital growth, whereas bonds are highly unlikely too. Even if it were risky (the fluctuation of share prices and the market), the compound growth one would experience via investing in shares would still outweigh the yield of bonds. Decreasing market exposure is also a dubious reason, if you buy good quality common stocks, or invest in a low-fee diversified fund, in the long run you are unlikely to lose money (less psychological factors). If you were nearing the end of your life, and were incredibly risk averse, you still would probably be better with an annuity if you didn't plan on leaving an inheritance, or a reverse mortgage if you had equity on your home. I'm really struggling to see a single, not insignificant benefit from such a large bond allocation.