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Stocks Up $1T Since October

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Re: Stocks Up $1T Since October

#101

Post by aries1980 »

rapind wrote: post #29
WalterBright wrote: post #5

Earlier quoted context omitted.

Any adult in America can buy stock and participate. At Robinhood.com, you can buy fractional shares for as little as $1 and no commission on the trade. No, I'm not a robinhood user nor do I own stock in robinhood. It's just an example of how it is never been easier for any American to invest in stocks.

So the logistics of obtaining stock have been solved. That seems like a great and necessary step in the right direction. "84% of US stocks are owned by the richest 10%" sounds like it could turn into a really big problem though. What can we do next? Why isn't everyone participating?

Because that number is about public companies. Many people run their own business, which might be not public, but they own "shares". Most Western countries have a wealth of prosperous SMEs. People who invest in someone else's company very likely do so because have no better option, e.g. to invest in her own company for growth.

Btw please define "US stock". US tax resident? Listed on US the stock exchange? Owned solely by US citizens?

Re: Stocks Up $1T Since October

#102

Post by ducttape12 »

fahrradflucht wrote: post #36
ducttape12 wrote: post #9

Earlier quoted context omitted.

My 401k is invested in that same stock market, along with the retirement accounts of every other person in the United States. I hope the market continues to rise, especially since my parents will be retiring soon.

Why does this stand in conflict with acknowledging the fact that massive gains for stock prices (or property for that matter) caused by things like QE and alike, have massive social consequences since the ones that were already wealthy profit a lot more than the average Joes's 401k? You can be a happy investor and still think about the dangers of rising inequality fueled by the market, no?

It doesn't. The wording of the post I replied to was an angry, black and white response condemning a rising stock market since it benefits the wealthy. My point was the stock market affects everyone, not just the super rich.

I wouldn't wish for the stock market to crash so some rich guy suffers. The rich will stay rich, it's the middle and low class who would suffer the most. If the market falls 75% tomorrow, Bezos will be fine, my parents will not.

Re: Stocks Up $1T Since October

#103

Post by JumpCrisscross »

manigandham wrote: post #97
JumpCrisscross wrote: post #80

Earlier quoted context omitted.

> That's the entire rule/suggestion. There's no "timing the market" needed. “Invest 3 years after an inflection point” is an attempt at timing the market. For every 2008, there are ‘54 and ‘57; ‘70 and ‘73; ‘80 and ‘81; et cetera .

Inflection points aren't timing, you recognize them after the fact. Literally when was the last time the market changed direction and what did it do for 3 years after. It doesn't matter if it goes down again, once you invest you stay invested. The rule was a simple guide on when to get in. Or you can just stay out forever.

> Inflection points aren't timing, you recognize them after the fact

“Timing the market” means incorporating timing and/or peak-to-trough measures in investment decisions. When you’re not asking “which assets should I buy” and instead “when should I buy them,” you’re trying to time the market.

Research is pretty consistent in showing almost all timing strategies are inferior to consistent investment, e.g. investing $X per month, regardless of your views on where the market is relative to what you believe to be an inflection point.

Re: Stocks Up $1T Since October

#104

Post by coliveira »

WalterBright wrote: post #70
coliveira wrote: post #57

Earlier quoted context omitted.

Nonsense, the stock market can (sometimes) help on retirement, but apart from professional traders, I haven't seen anyone who got rich simply by investing in stocks, and I know a lot of people who make good money. This is a myth propagated by the Wall Street.

> I haven't seen anyone who got rich simply by investing in stocks I know quite a few. You can read about more in the book "The Millionaire Next Door" by Stanley. Heck, anyone who bought AMZN, MSFT, AAPL at the opening price, and held, is a wealthy person today.

It is very easy to point at a company that is extremely successful today and say that it was "just a matter of investing in AAPL". The difficult is to know which company is the good one at the IPO. Thousands of seemingly great companies have failed during the last decades. Moreover, 30 years ago AAPL was a failing company. I don't think there is anyone with good sense that bought AAPL at the IPO and held that investment in their portfolio during that period. Less so with MSFT, but even MSFT lost 80% of its value in 2001. I don't think anyone wise would keep their fortune on MSFT, unless required by law.

If you read the "millionaire next door", you'll see that they made this money by saving, not by (just) investing in the market.

Re: Stocks Up $1T Since October

#105

Post by coliveira »

chii wrote: post #63
coliveira wrote: post #57

Earlier quoted context omitted.

Nonsense, the stock market can (sometimes) help on retirement, but apart from professional traders, I haven't seen anyone who got rich simply by investing in stocks, and I know a lot of people who make good money. This is a myth propagated by the Wall Street.

there's empirical evidence that by using a broad, well diversified index fund, and consistently remained invested in the market, you can get an average return of about 6-7% per annum over the very long run (30+ yrs). The problem is only when you don't have enough "spare" wealth to invest because the daily costs have all eaten up your paycheck. That's a problem i dont know how to solve.

There is empirical evidence that people only come up with this "average" on periods when the market is at the top. If you did your calculations around 2008 you would see a very different picture.

It is easy to be bullish on the market when everything seems to be doing well; a wise person needs to look at different periods, and see that the stock market also has produced a lot of disasters. People who lack this perspective are bound to be engulfed by such disasters. Heck, I hear that even professional investors, who are paid to buy stocks, are starting to take their money out of the market fearing of what might come next.

Re: Stocks Up $1T Since October

#106

Post by WalterBright »

manigandham wrote: post #95
WalterBright wrote: post #89

Earlier quoted context omitted.

The leverage you can do is the same whether a small or large investor. Check out "margin percentage" on various brokerage sites.

It's not the same. For example, I have Portfolio Margin [1] which gives me much greater leverage than normal Regulation T accounts, and that's just as a personal trader. You unlock even more access and advanced strategies as you gain capital all the way up to 10s of millions. 1. https://www.tdameritrade.com/investment-products/margin-trad...

I think if you work through the numbers, the risk level to the brokerage is the same. For example:

"But the goal is to align margin requirements with your portfolio's overall risk, based on the net exposure of all positions, and not just on individual positions. Portfolio margin is available to qualified investors who meet our minimum requirements and have $125k or more in total equity."

And by "qualified" investors they likely are looking at your other assets to see if they can be used as collateral. Note that if you go negative with your brokerage account, they don't just swallow the loss, they'll come after everything you have.

Re: Stocks Up $1T Since October

#107

Post by WalterBright »

koonsolo wrote: post #86
tempsy wrote: post #31

Earlier quoted context omitted.

Uh I mean clearly that wasn’t true for last 40 years continuously... Dot com bubble, 9/11, 2008 recession

Assume you went all in during the worst possible time, did you make a loss or gain when you kept it until now?

A substantial gain.

Re: Stocks Up $1T Since October

#108

Post by WalterBright »

coliveira wrote: post #104
WalterBright wrote: post #70

Earlier quoted context omitted.

> I haven't seen anyone who got rich simply by investing in stocks I know quite a few. You can read about more in the book "The Millionaire Next Door" by Stanley. Heck, anyone who bought AMZN, MSFT, AAPL at the opening price, and held, is a wealthy person today.

It is very easy to point at a company that is extremely successful today and say that it was "just a matter of investing in AAPL". The difficult is to know which company is the good one at the IPO. Thousands of seemingly great companies have failed during the last decades. Moreover, 30 years ago AAPL was a failing company. I don't think there is anyone with good sense that bought AAPL at the IPO and held that investm…

> but even MSFT lost 80% of its value in 2001

No, it was 50%. It's up around 400% since the bottom.

> The difficult is to know which company is the good one at the IPO

It's fine if you don't want to invest because of the risk. But to then say it's unfair that others who do take the risk get the rewards is ... unreasonable.

Re: Stocks Up $1T Since October

#109

Post by WalterBright »

coliveira wrote: post #105
chii wrote: post #63

Earlier quoted context omitted.

there's empirical evidence that by using a broad, well diversified index fund, and consistently remained invested in the market, you can get an average return of about 6-7% per annum over the very long run (30+ yrs). The problem is only when you don't have enough "spare" wealth to invest because the daily costs have all eaten up your paycheck. That's a problem i dont know how to solve.

There is empirical evidence that people only come up with this "average" on periods when the market is at the top. If you did your calculations around 2008 you would see a very different picture. It is easy to be bullish on the market when everything seems to be doing well; a wise person needs to look at different periods, and see that the stock market also has produced a lot of disasters. People who lack this perspe…

> Heck, I hear that even professional investors, who are paid to buy stocks, are starting to take their money out of the market fearing of what might come next.

I hear that most every day, every year, every decade. There's always plenty of reasons to not invest. There's always an article in the financial news predicting imminent doom.

I ride them up, down, and back up again.

Re: Stocks Up $1T Since October

#110

Post by WalterBright »

coliveira wrote: post #104
WalterBright wrote: post #70

Earlier quoted context omitted.

> I haven't seen anyone who got rich simply by investing in stocks I know quite a few. You can read about more in the book "The Millionaire Next Door" by Stanley. Heck, anyone who bought AMZN, MSFT, AAPL at the opening price, and held, is a wealthy person today.

It is very easy to point at a company that is extremely successful today and say that it was "just a matter of investing in AAPL". The difficult is to know which company is the good one at the IPO. Thousands of seemingly great companies have failed during the last decades. Moreover, 30 years ago AAPL was a failing company. I don't think there is anyone with good sense that bought AAPL at the IPO and held that investm…

> they made this money by saving, not by (just) investing in the market

Even if you saved $20,000 a year, it would take you 50 years to save a million. But if you invested that instead, at a conservative 7% a year, you'd wind up with $9 million.

You'd pass a million after 22 years.

https://www.daveramsey.com/smartvestor/investment-calculator

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