Investing General Discussion

Mist · Nov 2, 2023

Sanrith Descartes said:
Their costs ballooned as well.

Tim Apple declined to do layoffs and took a paycut instead.

Short run this is probably bad but long term it's still Apple, the most secure devices in an increasingly insecure world. M3 silicon looks great so far. I'd never buy one and yet can't help but compliment.

Sanrith Descartes · Nov 2, 2023

Mist said:
Tim Apple declined to do layoffs and took a paycut instead.

Short run this is probably bad but long term it's still Apple, the most secure devices in an increasingly insecure world. M3 silicon looks great so far. I'd never buy one and yet can't help but compliment.

Yeah, it's still the best single equity to own long term. Until they finally fall from their throne. Just don't let me MSFT shares know I said that. They hate being #2.

Cutlery · Nov 2, 2023

Cutlery said:
FOH Bros, I need some help. Didn't see a better thread for it than this. It mostly relates to retirement planning, but I figure it's basically investing, to which I know next to nothing about.

I have a pension with a company that's probably never going to go under, so I think it's a pretty safe bet it will be there when I retire. They offered me a buyout on it, cash now, or annuity for the rest of my life. The sum total of this pension would be $953/mo at age 65, for the rest of my life. The annuity option i can take today is $312/mo for the rest of my life. That one I can figure out myself - that sounds like garbage. I'm 44, so 20ish years until retirement. My grandfather is 94, and I have no reason to believe I won't live at least as long, based on my excellent health and the general longevity of my family tree. So I'm looking at probably 30 years in retirement. Based upon that, it's pretty simple to exclude the annuity, as I'd receive ~187k from that over my expected life, or almost double that from just taking the pension at 65 and living another 30 years.

The part I'm having trouble with is the lump sum payment - they're offering me $64k to buy me out completely. On the face of it - it seems ridiculous, that's like 5 years of retirement, and I'd collect way more money over my life than that. But, i'm no longer with that company, and I have a 401k now (which is pretty small, only had it for just over a year). Rate of return on it was 8% last year.

When I start trying to figure out the math on this, I'm not sure which direction to go. If we use a simple investment calculator and I assume 6% return (is that fair? I don't know), that means that I'm going to have 217.5k by 65 just off that money alone, not to mention what I put in there between now and then. But, if I'm reading this table right, that means I'm going to be getting $12k/year in interest by that point - which is more than the pension is worth (marginally, but it still is). Now, if I can just take the interest and leave the principal, this means I should be in theory way better off, no? I mean, I'd get the same "pension" out of it, but I'd have 200k to pass down to the kids or draw down as I need.

But then I start to wonder about what the actual rate of return is as you get closer to retirement - maybe it's not enough to get the same benefit as the pension is.

Basically what I'm saying is I'm not sure what the fuck I should do here. Safe money is always going to be good. Guaranteed money is always going to be good. But if I can do better than that safe money by a substantial margin, shouldn't I be exploring this option? Should I just fucking leave it? I mean, if I die, it just goes away, so there's always that threat. But on the flip side - i'm dead, what the fuck do I care?

You guys have any thoughts on what you'd do in this situation?

Okay guys. Some of you may remember me from a month or 2 ago when I cashed out my pension.

Well, we're here now. The cash is cleared and in a TD Ameritrade rollover IRA. Sum total of $64,174.

Now...what do I do with it?

I looked into SPY, QQQ, ITOT. Looks like SPY return is 12%, QQQ and ITOT significantly higher. Should I split it up between those 3? If I do, should I weight one more than another, or should I just split evenly and call it good?

Furthermore, how do I go about doing this? There's a lot of terms here I don't understand if I go to buy a stock I'm looking at a dropdown table like this.

Do I have to manually figure out how many shares I want? Order type? What's a limit? Time in force? Do I need special instructions?

I mean, I think I can kinda figure this out. I do the math, figure out how many shares I want, i think market is fine, because I don't have anything anyway. Price is gonna be whatever the price is that day. It's just kinda nerve wracking doing this with your life savings!

Lambourne · Nov 3, 2023

Cutlery said:
Okay guys. Some of you may remember me from a month or 2 ago when I cashed out my pension.

Well, we're here now. The cash is cleared and in a TD Ameritrade rollover IRA. Sum total of $64,174.

Now...what do I do with it?

I looked into SPY, QQQ, ITOT. Looks like SPY return is 12%, QQQ and ITOT significantly higher. Should I split it up between those 3? If I do, should I weight one more than another, or should I just split evenly and call it good?

Furthermore, how do I go about doing this? There's a lot of terms here I don't understand if I go to buy a stock I'm looking at a dropdown table like this.
View attachment 498518

Do I have to manually figure out how many shares I want? Order type? What's a limit? Time in force? Do I need special instructions?

I mean, I think I can kinda figure this out. I do the math, figure out how many shares I want, i think market is fine, because I don't have anything anyway. Price is gonna be whatever the price is that day. It's just kinda nerve wracking doing this with your life savings!

Limit buy order = you are offering to buy your specified number of shares at your specified price. There is no guarantee the order will be filled before your order expires (time in force). Generally safest option for the novice buyer since you'll either get what you asked for, a smaller number shares but still at your specified price, or nothing.

Market buy order = buy a dollar amount of shares at the currently best available price. The order will be filled instantly but there is no guarantee how many shares you will get exactly and at what price. On your screenshot the ask is 362.05 so that means there is at least one share available to buy at that price, but if you are buying $3000 worth of shares then you might end up paying 362.05 for one share, 362.1 for the next one, 362.3 for the one after that etc. This price uncertainty is called slippage and will generally not be a major issue for the individual investor buying highly liquid (=lots of sellers/buyers) stocks but can be a major pitfall if dealing with lesser traded individual stocks or crypto.

The classic "don't invest what you can't afford to lose" is the best beginner advice you'll ever get because like everything else, you learn by doing. I learned a lot flipping a few hundred worth of dog coins on kraken and inevitably getting burned few times in the process. A $200 mistake there might prevent a $20,000 mistake later on. Don't try the advanced stuff people like Sanrith or Blazin post here, that's mythic+ raiding and you're in Elwynn forest trying to figure out how to open your bags. Nothing wrong with either but be aware of your experience level.

Read a lot on investopedia too. Most of it won't make sense to you early on and that should be a sign to proceed with caution.

Investing for Beginners: A Guide to Assets

Learning where different assets stand on the investment risk ladder is the first step to understanding investments.

www.investopedia.com

Flobee · Nov 3, 2023

Leaving it sit in a money market while you figure stuff out isn't a bad move right now to be honest. Yielding 5% right now

Blazin · Nov 3, 2023

Apple shareholders getting absolutely slaughtered with the price falling to levels not seen since Wednesday afternoon. Carnage

Foler · Nov 3, 2023

Blazin said:
Apple shareholders getting absolutely slaughtered with the price falling to levels not seen since Wednesday afternoon. Carnage

Time to buy?

Blazin · Nov 3, 2023

Foler said:
Time to buy?

blood in the streets! I can't imagine what it must be like for those people who bought yesterday morning and now facing being down almost 1% and unlikely to be green on their positions for several more hours.

Sanrith Descartes I'm a little salty at you for not buying SPY @ $410 We've been setting up for this move for two months. I'm going to go yell at my goats and try not to think about it.

Edaw · Nov 3, 2023

Cutlery · Nov 3, 2023

Lambourne said:
Limit buy order = you are offering to buy your specified number of shares at your specified price. There is no guarantee the order will be filled before your order expires (time in force). Generally safest option for the novice buyer since you'll either get what you asked for, a smaller number shares but still at your specified price, or nothing.

Market buy order = buy a dollar amount of shares at the currently best available price. The order will be filled instantly but there is no guarantee how many shares you will get exactly and at what price. On your screenshot the ask is 362.05 so that means there is at least one share available to buy at that price, but if you are buying $3000 worth of shares then you might end up paying 362.05 for one share, 362.1 for the next one, 362.3 for the one after that etc. This price uncertainty is called slippage and will generally not be a major issue for the individual investor buying highly liquid (=lots of sellers/buyers) stocks but can be a major pitfall if dealing with lesser traded individual stocks or crypto.

The classic "don't invest what you can't afford to lose" is the best beginner advice you'll ever get because like everything else, you learn by doing. I learned a lot flipping a few hundred worth of dog coins on kraken and inevitably getting burned few times in the process. A $200 mistake there might prevent a $20,000 mistake later on. Don't try the advanced stuff people like Sanrith or Blazin post here, that's mythic+ raiding and you're in Elwynn forest trying to figure out how to open your bags. Nothing wrong with either but be aware of your experience level.

Read a lot on investopedia too. Most of it won't make sense to you early on and that should be a sign to proceed with caution.

Investing for Beginners: A Guide to Assets

Learning where different assets stand on the investment risk ladder is the first step to understanding investments.

www.investopedia.com

Thanks.

I don't have any interest in playing the game. I was just told (in here) to park it in an index fund and leave it and that's my plan. I don't know enough to do anything else...I just also need to make sure I know enough to buy the right fund!

Blazin · Nov 3, 2023

Thanks for playing

As much as I'm liking the profits this week, I honestly feel for the people who didn't like the run up into July then when a correction comes that gives them another chance they miss it because they always fear something worse. Corrections always feel scary and validates the fears of those who weren't participating. This correction of course went far enough to call things into question (losing 200d ma etc). This rally may have some legs as people chase, I'd expect I'll be lightening up some as we move closer to overhead resistance. If I play this exit right guarantees me a good year so always eager to want to lock that in.

You have to be willing to lose. The number one thing that has worked for me is when I can't see a positive, the charts look like shit, momentum looks like shit. The bear case makes total sense...I buy. Not because I want to, it feels idiotic but we have been struggling for months the reasons to be concerned are in our face, that's when use you put your George Castanza hat on and do t he opposite of what seems prudent.

Sanrith Descartes · Nov 3, 2023

Blazin said:
blood in the streets! I can't imagine what it must be like for those people who bought yesterday morning and now facing being down almost 1% and unlikely to be green on their positions for several more hours.

Sanrith Descartes I'm a little salty at you for not buying SPY @ $410 We've been setting up for this move for two months. I'm going to go yell at my goats and try not to think about it.

I had my target and limit order in at $408 (SPLG $48). I missed by a handful of pennies. My previous add was at $412 a few days prior so I'm not totally annoyed. There is always tomorrow.

Sanrith Descartes · Nov 3, 2023

Edaw said:

Linking ZH tweets...

duck and cover documentary GIF by Kino Lorber

Mist · Nov 3, 2023

Market went into a correction and all I bought was bonds, AMZN, DIS, and 5K more JEPI. At least once of those worked out. Maybe two if you count the 20-year bonds.

Only bought $250 worth of SPY when it was down, from my dumb SOFI account.

Cad · Nov 3, 2023

Not that I usually look but what is going on with the market? VTI has swung like 15 points up-down-up in the last 15 days. I mean I realize we got a war and all but why the recovery then?

Big Phoenix · Nov 3, 2023

Cad said:
Not that I usually look but what is going on with the market? VTI has swung like 15 points up-down-up in the last 15 days. I mean I realize we got a war and all but why the recovery then?

No more interest rate hikes ever.

Markets acting like fed is gonna drop them next month.

Blazin · Nov 3, 2023

Cad said:
Not that I usually look but what is going on with the market? VTI has swung like 15 points up-down-up in the last 15 days. I mean I realize we got a war and all but why the recovery then?

Sentiment got too negative and many people positioned for lower. The why of it is irrelevant. Macro backdrop hasn't changed. Bonds are finally getting a reprieve, likely a counter trend move in a larger secular trend of rising yields.

Sanrith Descartes · Nov 3, 2023

Cutlery said:
Thanks.

I don't have any interest in playing the game. I was just told (in here) to park it in an index fund and leave it and that's my plan. I don't know enough to do anything else...I just also need to make sure I know enough to buy the right fund!

Simply put. SPY is the S&P 500, QQQ is the Nasdaq 100, ITOT is the total market (think SPY plus lots of small and midcaps). Historically, the ITOT has trailed the SPY by a relatively small amount. You cant really go "wrong" with SPY/ITOT. QQQ is a bit more volatile since it is so heavily weighted in the tech sector.

SPY has a net expense ratio of 0.0945%
ITOT net expense is 0.03%
QQQ net expense is 0.2%

So ITOT is significantly less expense. This being said, there is a little brother of SPY called SPLG. Exact same fund, same company (State Street), it just is a smaller priced clone of SPY. Its 1:8.5 in share price. It is also about free in terms of fees. Expense ratio is 0.02. Only downside is its not really liquid enough for options play but that isnt a factor for you.

All things being equal, I would drop 100% of the money into SPLG for the long term.

Mist · Nov 3, 2023

I totally understand now how people would get rich trading bonds. My bonds are already up %4 if I were to turn around and sell what was very obviously a strong safe investment already. Seems really close to free money.

Sanrith Descartes · Nov 3, 2023

Mist said:
I totally understand now how people would get rich trading bonds. My bonds are already up %4 if I were to turn around and sell what was very obviously a strong safe investment already. Seems really close to free money.

Bond traders get almost no attention in the world, but yeah they can make lots of money.

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