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Stocks Up $1T Since October

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Re: Stocks Up $1T Since October

#111

Post by koonsolo »

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.

That sounds smart, but the numbers say otherwise. "Invest it all now" is the best strategy. In your case, you just lost 3 years of nice recovery percentages.

Re: Stocks Up $1T Since October

#112

Post by manigandham »

WalterBright wrote: post #106
manigandham wrote: post #95

Earlier quoted context omitted.

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…

Risk level to the brokerage is different from margin requirements and leverage, but they do trust you more. They don't look at or even know about any other assets though. It's based on your account size, trading experience and strategy. And of course negative balances are always owed.

But the point is that more capital does give you more leverage. The next step is $5M+ mark when you get even more access to trading vehicles.

Re: Stocks Up $1T Since October

#113

Post by coliveira »

WalterBright wrote: post #110
coliveira wrote: post #104

Earlier quoted context omitted.

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

Not investing in the stock market doesn't mean that you'll put your money under the mattress. There are several investment vehicles, from fixed income to real state and including your own businesses. These investment are much safer and are not so correlated to the craziness and plain criminality happening on Wall Street.

Re: Stocks Up $1T Since October

#114

Post by WalterBright »

manigandham wrote: post #112
WalterBright wrote: post #106

Earlier quoted context omitted.

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…

Risk level to the brokerage is different from margin requirements and leverage, but they do trust you more. They don't look at or even know about any other assets though. It's based on your account size, trading experience and strategy. And of course negative balances are always owed. But the point is that more capital does give you more leverage. The next step is $5M+ mark when you get even more access to trading ve…

> But the point is that more capital does give you more leverage.

I don't believe it. I do believe that if you have a track record of paying your trading debts and paying fat commissions, they'll let you take on more risk. Worst case, if you've got $5M in an account, you likely have other assets the brokerage can seize.

> They don't look at or even know about any other assets though.

I don't believe they're going to let you highly leverage $10m without checking you out one way or another.

Re: Stocks Up $1T Since October

#115

Post by WalterBright »

coliveira wrote: post #113
WalterBright wrote: post #110

Earlier quoted context omitted.

> 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

Not investing in the stock market doesn't mean that you'll put your money under the mattress. There are several investment vehicles, from fixed income to real state and including your own businesses. These investment are much safer and are not so correlated to the craziness and plain criminality happening on Wall Street.

> fixed income

These often don't even beat inflation. The provider can also go bust like any company.

> real estate

I am the poster boy for losing pots of money on "can't lose" real estate.

> your own business

The failure rate for your own business is 80-90% in the first 5 years.

Stocks are far safer.

Re: Stocks Up $1T Since October

#116

Post by manigandham »

WalterBright wrote: post #114
manigandham wrote: post #112

Earlier quoted context omitted.

Risk level to the brokerage is different from margin requirements and leverage, but they do trust you more. They don't look at or even know about any other assets though. It's based on your account size, trading experience and strategy. And of course negative balances are always owed. But the point is that more capital does give you more leverage. The next step is $5M+ mark when you get even more access to trading ve…

> But the point is that more capital does give you more leverage. I don't believe it. I do believe that if you have a track record of paying your trading debts and paying fat commissions, they'll let you take on more risk. Worst case, if you've got $5M in an account, you likely have other assets the brokerage can seize. > They don't look at or even know about any other assets though. I don't believe they're going to…

I have more leverage. You don't have to believe anything, it's right there in the description of Portfolio Margin, and it requires a certain account size.

What does any of this background check have to do with your claim that more capital doesn't provide more leverage - when it quite literally does?

Re: Stocks Up $1T Since October

#117

Post by manigandham »

JumpCrisscross wrote: post #103
manigandham wrote: post #97

Earlier quoted context omitted.

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 $…

Obviously, if you're investing consistently then this thread doesn't apply. I don't know how to make it any clearer - some people will always have a reason to stay out and I offered a rule to follow to get in. That's all it was.

Re: Stocks Up $1T Since October

#118

Post by manigandham »

koonsolo wrote: post #111
manigandham wrote: post #97

Earlier quoted context omitted.

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.

That sounds smart, but the numbers say otherwise. "Invest it all now" is the best strategy. In your case, you just lost 3 years of nice recovery percentages.

The suggestion is for people who don't invest because of whatever reason they come up with to stay out.

Re: Stocks Up $1T Since October

#119

Post by chii »

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.

and that's why most active managed funds perform worse than most passive index funds. that's why stock picking doesn't work for most (unless you're buffett). That's why timing the market doesn't work.

People are too emotional. If you stick to an algorithmic method (of putting in part of your paycheck every month), ride the ups and the downs (don't sell, don't take on debt to buy extra, unless you can afford the debt easily etc), you will come out ahead more times than behind.

Re: Stocks Up $1T Since October

#120

Post by WalterBright »

manigandham wrote: post #116
WalterBright wrote: post #114

Earlier quoted context omitted.

> But the point is that more capital does give you more leverage. I don't believe it. I do believe that if you have a track record of paying your trading debts and paying fat commissions, they'll let you take on more risk. Worst case, if you've got $5M in an account, you likely have other assets the brokerage can seize. > They don't look at or even know about any other assets though. I don't believe they're going to…

I have more leverage. You don't have to believe anything, it's right there in the description of Portfolio Margin, and it requires a certain account size. What does any of this background check have to do with your claim that more capital doesn't provide more leverage - when it quite literally does?

A background check reveals assets of yours that would be collateral for the loan.
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