Investing in the Stock Market. Ideas? Share em!

[Tunaman]

After todays 500 point market beat down I got to thinking how many bass players understand whats going on? How do we protect ourselves & most importantly our familiy financially from whats going on. I'm just a middle class guy not in finance looking to share ideas, get opinions & have discussions on investing.

So what are you guys investing in? Whats your portfolio allocation to bonds, stocks, cash? How do you diversify your stock holdings? How are you contributing to your 401K?

While politics plays a part, Id rather steer away from that & talk about investing implications I personally believe both parties got us in the mess & complaining about it won't help & its out of our control, lets talk about what IS in our control.

I'm personally in
0% bonds
25% stocks
75% cash

401K diversified 50% overseas 50% USA even through large, mid, small caps. I've been contributing at 5% although I'm going to change to 10% & into money market soon.

My personal beliefs\predictions:
Bonds: With a 10 yr yield close to 2.5% I don't like em with bad yields & AAA rating just waiting to be stripped. Don't believe that the CPI is accurate & think inflation in stuff I buy is clearly running hotter than 1%.
Stocks & Cash: I have 25% in stocks just in case the Federal reserve just keeps on printing & the dollar crashes. 75% ready to be deployed if the market declines enough Fed announces more money printing (Quantitative Easing, QE).

Stocks of choice: Commodity related plays & dividends for long term buy & hold. I'm not a daytrader.

Current holdings (Getting crushed on a day like this!)
FCX, CHK, KFT, BAC, CSCO, INTC, XOM, X

If you're into this kinda thing like me it would be a cool discussion... lets help navigate these tough economic times together eh?

[pacojas]

i look for beat down securities and ride the possible rebound. thinking about picking up DNDN in the coming days.
my style of trading is kinda ol' school, but holding a stock too long these days can be fatal. get a good return and bail seems the rule of the day. and i'm very wary of setting Stop Losses with crooks and computers triggering down spikes!

[MJ5150]

My wife bought some stocks today, not sure which ones.

-Mike

[hbarcat]

With such extreme long term uncertainty in the economy it seems to me that expecting stocks to be a reliable performer is a risk - at least compared to investing in real estate.

Real estate is at an historic low and it's highly improbable that the market could go any lower. I think that finding an area where there was a concentration of investing (and flipping) during the housing boom and buying property that has a relatively high intrinsic value as real estate makes good sense if you want to keep risk to a minimum. Of course property isn't liquid and waiting for the market to expand again will take some time, but I think that in terms of long term money making, it's difficult to imagine a more golden opportinity than this current trough in the housing market.

IMO.

[tastybasslines]

sell netflix if you got it.

[Tunaman]

Pacojas: DNDN is a great call for a rebound, I got crushed in COLY once & it rebounded when it got bought out

hBarcat: I agree about stocks, I won't touch anything non-commodity related one & two I won't even buy those until I see QE3.
Housing... the problem with housing is the end user. US! People have no jobs & the pay they do sucks... here in Mass houses are still selling for 400K, my neighbor is 550K & they are selling! Foreclosures not in terrible areas don't exist here. Multifamilies all sell well north of 350K here & with the laws as they are squatters can live rent free for WAY too long before eviction. When people get desperate in the future they will pay the bills they have to... and its not rent!

I have a HUGE commodity related stock list if anyone is interested, PM me & I'll send it... but again I'm not buying.
Stocks like ANR, CLF, MOS, POT, FCX are still 3x higher than in 2007 when things were MUCH better & I don't see QE coming soon (No deflation, banks well capitalized, jobs & ISM still +)

[P. Aaron]

It looks like Apple Computer might be a good buy...or at least a decent long term buy & hold with an eye on management...of course. Somewhat contrary to some conventional wisdom.

[iamlowsound]

Originally Posted by P. Aaron

It looks like Apple Computer might be a good buy...or at least a decent long term buy & hold with an eye on management...of course. Somewhat contrary to some conventional wisdom.

I had a golden opportunity to buy Apple stock when it was trading at ~$40 at the end of 2005. It closed at $377.37 today. Oh how I wish I would have actually bought it.

lowsound

[Tunaman]

Non farm payrolls +117, not good enough for growth, good enough to push off QE3

Down we go long term

[Dirk Diggler]

Invest in yourself, and let wall street go down in flames.

Dirk

[PSPookie]

The thing that I understand that many other don't is that fear is driving these market fluctuations.

It's ridiculous. The market takes a dip because "economists fear rebound recession". Meanwhile, hiring and consumer spending slows in reaction. This goes on for a month or two and then things start to edge back up until . . . "economists fear rebound recession" again because job growth/recovery is going too slowly.

I just wish we could get out of this cycle. And I wish people would understand that it is the FEAR of a double-dip that is most likely to CAUSE a double-dip.

Economists don't know jack. One of the basic assumptions in most models is that people will make good decisions with their money. Yeah, that sounds like firm theoretical footing

[fenderhutz]

The stock market is like pigeons swooping around a dude that is throwing food on a park bench. If one pigeon sees a good piece then they all flock to the piece. If one pigeon flees they all flee. It's all based on group perception.

It's all funny money.

[Smokin' Toaster]

There is no 10 year period you can select in which the stock market did not grow. Not even if your 10 year period contains the 1929 crash and great depression. If you are sufficiently diversified, let it ride. I moved my 401k investments to bonds in '01 after 9/11 and in '07, and each time I would have been better off to have left them in the market. My 401K is in a variety of mutual funds, some international, some very agressive, some middle of the road.

[L-A]

I found the most lucrative speculation I can use right now is my own projects. I'm not knowledgeable enough to invest, and I'm not wealthy enough to have someone I trust do it for me.

I would probably do some index investing if I wanted long-term, safe return.

[guitar ed]

I was a stock broker once, so I have a few thoughts on the issue.

1) You can go broke being aggressive. You can also go broke being conservative. At least being aggressive offers you a chance to come out ahead.

2) Time & compound interest are your friends. Big time.

3) Most S&P 500 companies have a significant non-US presence. Investing them constitutes investing outside the US.

4) To meet a financial goal, you have to balance risk, return, available funds, desired goal funds, and time frame.

5) You can lose significant money in bonds, if you have to sell them. Same as stocks.

6) To figure out how long until your money will double, divide your aftertax return into 72. That's how many years it will take. 72/7 (% aftertax return) =10 years.

7) Shove as much money as you can into your 401(k) and IRA. They grow tax free, until you take the money out. See #2 and #6 above.


Later,

edg

[Tunaman]

ECB announced money printing for Italy & Spain today... a vicious cycle that creates more debt, printing while the people are left in the cold, a very sad story for the masses which is why we have this discussion. Its NOT going end well for 99% of us.

[Smokin' Toaster]

Originally Posted by guitar ed

...7) Shove as much money as you can into your 401(k) and IRA. They grow tax free, until you take the money out. See #2 and #6 above.

+1,000,000

AND... your employer may match some or all of the money you put into a 401k, usually with some maximum (5% of your wages or something similar).

If you aren't contributing up to the maximum employer match, your are leaving money on the table. Maybe not money you can spend today, but if you plan on living past your mid 60s it will certainly come in handy when you find out that the government spent all that money they forced you to contribute to Social Security.

Sorry if that's too political.

[Jazz Ad]

I have a strange approach to money.
To me the only worthy money is what you make through working.
I don't find gamble or trade money satisfying.
To top it, I find trading and gambling equally boring.
Am I alone?

[pbasswil]

Markets have always been, and will always be: 3 steps forward, 2 steps back; 1 step forward, 4 steps back; 5 steps forward, 1 step back...

But over the long term (multiple years/decades), there has never been anything but growth. Here's 100 years:
Dow Jones Industrial Average (1900 - Present Monthly) - Charting Tools - StockCharts.com

You might be able to work the short term ups and downs to your advantage IF you're obsessed with the small patterns/currents, and spend a good chunk of time every day, nose to the exchanges.

But I'd rather be practicing.

So I choose companies that:

a) have a steady history of profitability and growth, and no obvious shadows on their futures;

b) don't conduct their business with contempt for people and the environment (I have to sleep at night).

If you choose good companies carefully, you can ride out the big dips (like this week) in relative peace. You know that folks will still want their products in the future.

I leave the pursuit of quick riches to people who don't have practicing to do! :^D lol

[pbasswil]

Originally Posted by Smokin' Toaster

There is no 10 year period you can select in which the stock market did not grow. Not even if your 10 year period contains the 1929 crash and great depression. If you are sufficiently diversified, let it ride. I moved my 401k investments to bonds in '01 after 9/11 and in '07, and each time I would have been better off to have left them in the market. My 401K is in a variety of mutual funds, some international, some very agressive, some middle of the road.

I agree with you 99%. But according to this chart, from the pre-crash peak of 1929, to 1939, there was indeed considerable loss:
Dow Jones Industrial Average (1900 - Present Monthly) - Charting Tools - StockCharts.com
(Markets finally caught up in 1955; and then there was no stopping them!)

But that's the only time, as far as I can see. In the long term, the market is the patient person's friend.