Investing General Discussion
- Thread starter Furious
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Tmac
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Part of me feels like I missed the "Sell!" boat when the market was feverish back in Q4 of 2021, but we've been talking about inflation for like a year and I've just kept my boots in the sand. Bc, in general, I hate the idea of selling. Which, has already proven to be a really bad strategy.
Now, I'm starting to feel pretty fearful and considering selling everything and strapping in. But, I know that if I'm fearful, that probably means I should be buying and not selling. But, I also know that FOH is usually 6-12 mo's ahead of the curve, so if I'm featful now this shit probably isn't going to cause mass fear for another 6-12 mo's, meaning if I act now I'm still ahead of the curve. And then I have another 6-12 mo's to restock my moneybag for more purchases when everyone truly hates stonks and Rajaah sells all his crypto.
Blazin
when you coming back?- 1
Sanrith Descartes
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Sanrith Descartes
Veteran of a thousand threadban wars
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"But, I know that if I'm fearful, that probably means I should be buying and not selling."Part of me feels like I missed the "Sell!" boat when the market was feverish back in Q4 of 2021, but we've been talking about inflation for like a year and I've just kept my boots in the sand. Bc, in general, I hate the idea of selling. Which, has already proven to be a really bad strategy.
Now, I'm starting to feel pretty fearful and considering selling everything and strapping in. But, I know that if I'm fearful, that probably means I should be buying and not selling. But, I also know that FOH is usually 6-12 mo's ahead of the curve, so if I'm featful now this shit probably isn't going to cause mass fear for another 6-12 mo's, meaning if I act now I'm still ahead of the curve. And then I have another 6-12 mo's to restock my moneybag for more purchases when everyone truly hates stonks and Rajaah sells all his crypto.
Its nice to see some folks are listening and actually absorbing stuff.
So, you have achieved the first milestone in that you know what you should be doing. The second milestone to strive for is being able to go against your gut emotions and let your mind make the decisions.
Never forget you can't time the market. Not really. On a 10-year or greater timeline nothing that happens in the next six months will matter. The exception being realized losses. That being said, dont buy for the sake of buying. I have made just 3 transactions in the last 30 days. All very small adds to META. The market hasnt presented me other opportunities I liked (or it did and I missed the entry point). Honestly, we are in the patience phase now. Be patient, look for value, strike if an opportunity presents itself. If nothing looks good today, wait until tomorrow and look again.
Gravel
Mr. Poopybutthole
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Selling now is locking in (realizing) your losses. At the moment it's all paper losses, which are irrelevant.
This is how people get fucked in market downturns. You waited for all the selling to end, and *now* you think it's a good time to sell?
It's complete backwards logic. Like above, if you're expecting to actually need the money in 10, 20, or 30+ years, do you think the difference between the price it is now and 6 months ago will matter? As an example, say it's a stock that was at $50 in January and is now $40. By 2045, it'll probably be $200 and that small difference is something you barely remember.
This is how people get fucked in market downturns. You waited for all the selling to end, and *now* you think it's a good time to sell?
It's complete backwards logic. Like above, if you're expecting to actually need the money in 10, 20, or 30+ years, do you think the difference between the price it is now and 6 months ago will matter? As an example, say it's a stock that was at $50 in January and is now $40. By 2045, it'll probably be $200 and that small difference is something you barely remember.
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Sanrith Descartes
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To put this in a little chart. If you bought at the absolute peak of 2007, you bought the SPY at $157. It took about 6 years for you to make a new high. This would indeed suck. But if we move out to the ten year mark, the SPY is at $258. That is a 64% gain (plus dividend reinvestments that I am too lazy to calculate). Not great over 10-years I grant you. But this is the absolute worst case scenario. If you are dollar cost averaging during that 10-year stretch (like in your 401k) your gains are significantly better as your cost basis drops.
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Sludig
Silver Baronet of the Realm
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Still anxious about putting a chunk of house profits on new house to save roughly 5-6% a year (4.89 rate, and then PMI for the first 25% of loan), on a amortization calculator seeing dropping 100k saving me $350k ish or so looks great until I think about it as being over 30 years. So maybe I just need to boozecube black pill and hope for further crashing until I get the money and can plunk it into the market. (Though then it's lump sum into a fidelity vs max my 401k contributions which I wasn't able to lately and sip off the proceeds to get the money into tax advantaged vehicle.
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Fogel
Mr. Poopybutthole
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Or split it between both if you're too worried about either or.
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Sanrith Descartes
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As I am looking through financial documents trying to find my next small business to buy, I see one with tax returns that have massive SEP contributions and think to myself...
Sanrith Descartes
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EXPLAINER-How a massive options trade by a JP Morgan fund can move markets
NEW YORK, June 30 (Reuters) - A nearly $17 billion JP Morgan fund is expected to reset its options positions on Thursday, potentially adding to equity volatility at the end of a dismal first half for stocks.
Analysts say the JPMorgan Hedged Equity Fund's reset roiled markets in the closing hours of the last quarter and has the potential to move markets again this time around.
Here is what you need to know:
WHAT IS THE JP MORGAN HEDGED EQUITY FUND?
The JPMorgan Hedged Equity Fund holds a basket of S&P 500 stocks along with options on the benchmark index and resets hedges once a quarter. The fund, which had about $16.71 billion in assets as of June 27, aims to let investors benefit from equity market gains while limiting their exposure to stock declines.
For the year, the fund was down 9.7% through June 29, compared with a 19.3% decline for the S&P 500 Total return Index .
Its assets have ballooned in recent years, as investors seek protection from the sort of wild swings that rocked markets in the wake of the COVID-19 outbreak in March 2020.
The fund's positions include some of the market's biggest names, such as shares of Apple Inc(AAPL), Microsoft Corp(MSFT) and Amazon.com Inc.
HOW DOES THE FUND USE OPTIONS?
The fund uses an options overlay strategy that involves buying put options that make money if the S&P 500 drops about 5% or more from its level at the start of each quarter. To limit the cost of these put purchases, the fund also sells puts that would make money if the S&P 500 drops more than 20%.
In addition, the fund sells call options struck about 3.5%-5.5% above the market level, to help fund the cost of the hedge.
In all, the trade is structured so that investors are protected if the market falls -5% to -20%, and they are able to take advantage of any market gains in the average range of 3.5-5.5%. In March, the refresh of these positions involved about 130,000 S&P 500 contracts in all, worth some $20 billion in notional terms.
HOW CAN THIS AFFECT THE BROADER MARKET?
Options dealers - typically big financial institutions who facilitate trading but seek to remain market-neutral - take the other side of the fund's options trades.
To minimize their own risk, they typically buy or sell stock futures, depending on the direction of the market's move. Such trading related to dealer hedging has the potential to influence the broader market, especially if done in size, as is the case for the JPM trade.
The S&P 500 Index fell 1.2% in the last hour of trading on March 31 amid a lack of any obvious news - a move some analysts pinned on options hedging flows.
Traders say the refresh could exacerbate market swings on Thursday, as the fund rolls over its options positions and dealers buy and sell futures to hedge their exposure.
Charlie McElligott, equities derivatives strategist at Nomura, believes that all else being equal, more volatility and stock weakness could follow after June 30, once the trade is out of the way.
The strategy's puts corresponding to the 3,620 level on the S&P 500, the lower leg of the trade, may have lent support to the market during its slide this month, he said.
(Reporting by Saqib Iqbal Ahmed in New York Editing by Ira Iosebashvili and Matthew Lewis)
Analysts say the JPMorgan Hedged Equity Fund's reset roiled markets in the closing hours of the last quarter and has the potential to move markets again this time around.
Here is what you need to know:
WHAT IS THE JP MORGAN HEDGED EQUITY FUND?
The JPMorgan Hedged Equity Fund holds a basket of S&P 500 stocks along with options on the benchmark index and resets hedges once a quarter. The fund, which had about $16.71 billion in assets as of June 27, aims to let investors benefit from equity market gains while limiting their exposure to stock declines.
For the year, the fund was down 9.7% through June 29, compared with a 19.3% decline for the S&P 500 Total return Index .
Its assets have ballooned in recent years, as investors seek protection from the sort of wild swings that rocked markets in the wake of the COVID-19 outbreak in March 2020.
The fund's positions include some of the market's biggest names, such as shares of Apple Inc(AAPL), Microsoft Corp(MSFT) and Amazon.com Inc.
HOW DOES THE FUND USE OPTIONS?
The fund uses an options overlay strategy that involves buying put options that make money if the S&P 500 drops about 5% or more from its level at the start of each quarter. To limit the cost of these put purchases, the fund also sells puts that would make money if the S&P 500 drops more than 20%.
In addition, the fund sells call options struck about 3.5%-5.5% above the market level, to help fund the cost of the hedge.
In all, the trade is structured so that investors are protected if the market falls -5% to -20%, and they are able to take advantage of any market gains in the average range of 3.5-5.5%. In March, the refresh of these positions involved about 130,000 S&P 500 contracts in all, worth some $20 billion in notional terms.
HOW CAN THIS AFFECT THE BROADER MARKET?
Options dealers - typically big financial institutions who facilitate trading but seek to remain market-neutral - take the other side of the fund's options trades.
To minimize their own risk, they typically buy or sell stock futures, depending on the direction of the market's move. Such trading related to dealer hedging has the potential to influence the broader market, especially if done in size, as is the case for the JPM trade.
The S&P 500 Index fell 1.2% in the last hour of trading on March 31 amid a lack of any obvious news - a move some analysts pinned on options hedging flows.
Traders say the refresh could exacerbate market swings on Thursday, as the fund rolls over its options positions and dealers buy and sell futures to hedge their exposure.
Charlie McElligott, equities derivatives strategist at Nomura, believes that all else being equal, more volatility and stock weakness could follow after June 30, once the trade is out of the way.
The strategy's puts corresponding to the 3,620 level on the S&P 500, the lower leg of the trade, may have lent support to the market during its slide this month, he said.
(Reporting by Saqib Iqbal Ahmed in New York Editing by Ira Iosebashvili and Matthew Lewis)
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Sanrith Descartes
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Jysin
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Are we finally (officially) in recession?
11:53 (US) Atlanta Fed GDPNow: cuts Q2 GDP forecast from +0.3% to -1.0% - Source TradeTheNews
11:53 (US) Atlanta Fed GDPNow: cuts Q2 GDP forecast from +0.3% to -1.0% - Source TradeTheNews
Sanrith Descartes
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Gravel
Mr. Poopybutthole
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Yes, and I've been saying for weeks (months?) that this would happen at the end of June when they released the Q2 GDP numbers.
Why this is surprising people I have no clue. No one could've possibly believed we'd have a positive quarter with how shit everything is.
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Sanrith Descartes
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Jysin
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Sanrith Descartes
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