Earlier quoted context omitted.
Roaring Kitty’s posts that kicked off the GME craze had some very thoughtful analysis. And recently I watched some videos about dividend investing on YouTube that I would consider reasonable investment advice. I agree that there is a lot of gambling and excessive risk taking going on. And I myself stick to a 3 ETF portfolio because I like the simplicity. But to call it almost entirely just gambling I think is missing…
> I watched some videos about dividend investing on YouTube that I would consider reasonable investment advice. Do you happen to have those links?
“Buy and Hold” No More: The Resurgence of Active Trading
261–270 of 327 posts
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#262Article misses the point (perhaps due to their capital investments) that the resurgence in active trading is almost entirely just gambling, but exempted from casino regulation. Also, saying "no more" to refer to a blip fad is a ridiculous healdit.
... and with much lower commissions than betting on horse/footballer/dog races.
I do 99.9% of my gambling in the stock market because it historically is positive sum. Even with costs (commissions, fees, bid/ask spread). For me to win, you don't have to lose. Straight gambling cannot offer this.
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#263Earlier quoted context omitted.
The issuer funds it. It’s like an insurance policy. They’re contractually obligated to meet the terms (if the benefit is defined)
Presumably if the market was bad enough there would be a point where the issuer couldn't meet the terms.
Then the business/economy probably has larger problems that will be addressed (successfully?) by the government.
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#264Earlier quoted context omitted.
So where to put cash?
It depends on how soon you would need it. If saving up for a down payment expected within the next ten years, not stocks. Otherwise stocks.
Not a binary choice. Whatever lets you sleep at a zeroth order approximation. Some cash, some (most?) index fund(s). And if there is enough and you have the inclination: YOLO.
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#265Earlier quoted context omitted.
> In 2019, 71% of actively managed funds lagged behind their benchmark according to the S&P. Yes, you have a market where participants trade against each other, and you discover that the average participant in the market does not "beat the market". That should be obvious. The question in dispute is whether _anyone_ can beat the market, and there's a mountain of evidence that certain people/funds beat the market year…
Yes, you can beat the market. But anyone cannot beat the market. This is a problem for retail investors. Studies such as this one [1] have shown that the past performance of an actively managed fund does not predict its future returns. In other words, while there are certainly actively managed funds that beat the market in some years, a retail investor picking a mutual fund based on past performance is likely to be d…
> Yes, you can beat the market. But anyone cannot beat the market ... a retail investor picking a mutual fund based on past performance is likely to be disappointed.
We are in 100% agreement.
I only wanted to correct the misinformation spread by grandparent who claimed that nobody can beat the market.
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#266Earlier quoted context omitted.
So I've been trying to work this out. Previously I understood the idea "The passives are simply the average of the actives". So even if you had 99% passive, so long as the actives were doing their homework the system would work, but as you said you need to watch for exploits. But then I had the question: When the world has gone passive, who is left as an active investor? 1. Wallstreetbets users who do poorly on avera…
You'd probably be interested in listening to this talk by Michael Green: https://www.youtube.com/watch?v=x-rJciYZmi0 He goes into a lot of data around the idea that the market is "too passive", and he believes that we were already at that point last year before the pandemic.
I really enjoyed and learned a lot watching this, thanks.
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#267If I make 20% in one day, I will be active, otherwise, I will be in between passive and active.
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#268> Conventional wisdom holds that passive trading is the rational investing strategy. That isn't conventional wisdom. It's not someone's opinion. It's statistically proven reality. Whether you're an individual trader or a billionaire hedge fund manager, active strategies lose out to passive ones in the long run. > has catalyzed a lean-in mindset around investing, particularly among Gen Z. And it will burn them, just l…
Value investing strategies sometimes beat just buying the index.
Re: “Buy and Hold” No More: The Resurgence of Active Trading
#269Earlier quoted context omitted.
So I've been trying to work this out. Previously I understood the idea "The passives are simply the average of the actives". So even if you had 99% passive, so long as the actives were doing their homework the system would work, but as you said you need to watch for exploits. But then I had the question: When the world has gone passive, who is left as an active investor? 1. Wallstreetbets users who do poorly on avera…
Think of it this way: if there are too many "free riders" in the form of passive investors, then ... it will become easier for active investors to make money, and beat the market, and more people will actively invest their money (or invest in actively managed funds).
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Re: “Buy and Hold” No More: The Resurgence of Active Trading
#270Earlier quoted context omitted.
Why is Wealthfront so bad? Their fees don’t make them cheap, is that it?
Correct. What they are selling you is an asset allocation, this turns on it's head all the innovation since the early 90s...and the performance you likely get will be indistinguishable from what most people could achieve on their own. One of the big advantages that savers have today are open platforms (there was a time when fund managers ran their own platforms), low dealing costs, low spreads, and ETFs. All that inv…
> ...but what most investors don't know is that WealthFront have zero chance too. So the aim is to equal what they do without their mad fees...
Can someone help me understand this comment as to my knowledge WeathFront (WF) fees were the lowest in the industry. For example people talk about Vanguard fees as also being low but they're between 0.25% and 1% [1]. If it makes a difference I'm specifically coming at it from the lens of IRA retirement contributions.
Is the parent post saying the alternative is to figure out what specific stocks/ETF/index WF is purchasing and then purchase those with something like eTrade?
TIA