Investing General Discussion

Haus

Haus

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I'm struggling right now because we're closing at ATHs, my own company's stock is bouncing around it's ATH and has surged (and I'd out and out say spiked in the last couple weeks). Everything is coming up Milhouse.....

Yet the part of me that also had a lot of company stock options through the dot com crash keeps tapping me on the shoulder.

I honestly hope M Power M Power s chart and Cad Cad are right and I'm just stock doomering.

If my worst financial concern goes back to being how to diversify out of my outsized pile of company stock with minimum tax impact I need to be ready to tell myself to shut up and enjoy things.
 
M Power

M Power

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Haus said:
I'm struggling right now because we're closing at ATHs, my own company's stock is bouncing around it's ATH and has surged (and I'd out and out say spiked in the last couple weeks). Everything is coming up Milhouse.....

Yet the part of me that also had a lot of company stock options through the dot com crash keeps tapping me on the shoulder.

I honestly hope M Power M Power s chart and Cad Cad are right and I'm just stock doomering.

If my worst financial concern goes back to being how to diversify out of my outsized pile of company stock with minimum tax impact I need to be ready to tell myself to shut up and enjoy things.
Click to expand...
A lot of wealth advisors would tell you that cashing out of company stock ASAP after vesting is the smart play because you have less control over company stock and it's much safer putting into S&P500 long term than chancing it. The company could fire you and make you have nothing depending on reasons. They can dilute your shares as well. Of course, this could blow up in your face if the company is a Google or Facebook but overall it's the smarter play. You do need to take taxes into account though if you're cashing out alot.
 
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Gravel

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Haus said:
I'm struggling right now because we're closing at ATHs, my own company's stock is bouncing around it's ATH and has surged (and I'd out and out say spiked in the last couple weeks). Everything is coming up Milhouse.....

Yet the part of me that also had a lot of company stock options through the dot com crash keeps tapping me on the shoulder.

I honestly hope M Power M Power s chart and Cad Cad are right and I'm just stock doomering.

If my worst financial concern goes back to being how to diversify out of my outsized pile of company stock with minimum tax impact I need to be ready to tell myself to shut up and enjoy things.
Click to expand...
Market trades within 5% of an ATH something like 85-90% of the time.

It's why time in the market beats timing the market. Human nature is risk averse and the market gives no shits.

As far as company stock, I'm not a fan. Because you already have a ton at stake in your company since your entire salary is already tied to its success. If the company goes tits up, not only is your investment cooked, so is your salary.
 
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Haus

Haus

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M Power said:
A lot of wealth advisors would tell you that cashing out of company stock ASAP after vesting is the smart play because you have less control over company stock and it's much safer putting into S&P500 long term than chancing it. The company could fire you and make you have nothing depending on reasons. They can dilute your shares as well. Of course, this could blow up in your face if the company is a Google or Facebook but overall it's the smarter play.
Click to expand...
I rode out the vesting of my shares. Last shares vested a couple years ago. At the time I considered that, but the fact that during the first year (pre-vesting schedule starting) my company shot up ~200% so I let it ride a bit longer.... between then and end of vesting (3 years later, 4 years total) it went up another ~225% and I got kinda paralyzed because I started worrying about how bad the tax raping would be.... In the 2 years since it's only went up another 20% or so. Feels like we're plateauing.

As for tax avoidance I'm debating now between if I plan on cashing and spending some of it pre-retirement, or if I am going to consider it "retirement money". If the former I start phasing it out opportunistically so it's only long term gains taxed (which all of it essentially is except some trickling extra I've picked up in the employee stock purchase program). If I'm going to hold out 6-7 years until I retire apparently I can avoid taxation more by locking it into Section 721 exchange fund. That locks it up until right about the time I plan on full on retiring.
 
Cad

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Gravel said:
Market trades within 5% of an ATH something like 85-90% of the time.

It's why time in the market beats timing the market. Human nature is risk averse and the market gives no shits.

As far as company stock, I'm not a fan. Because you already have a ton at stake in your company since your entire salary is already tied to its success. If the company goes tits up, not only is your investment cooked, so is your salary.
Click to expand...
People always ask how do I know what the market is going to do? It might crash, it might never come back, it might...

Yea, it might. History suggests it won't. Just stick your money in there and leave it, and by magic, you get rich...

It's not that complicated.
 
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Synj

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M Power said:
A lot of wealth advisors would tell you that cashing out of company stock ASAP after vesting is the smart play because you have less control over company stock and it's much safer putting into S&P500 long term than chancing it. The company could fire you and make you have nothing depending on reasons. They can dilute your shares as well. Of course, this could blow up in your face if the company is a Google or Facebook but overall it's the smarter play. You do need to take taxes into account though if you're cashing out alot.
Click to expand...
Case in point (this doesn’t even include about $50k in options that are now worth exactly zero)

IMG_8040.jpeg


Sadly, most of that happened literally a few months before I vested 🥴
 
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M Power

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Jysin said:
More on those ATHs yesterday. Doesn't look great under the hood. Not calling for corrections, but could very easily see some profit taking & rotations happening soon. OpEx this Friday, btw.

Click to expand...

This is typical Twitter doomerism.
More stocks declining than advancing
Click to expand...
This is almost always the case. The market is held up by a small amount of exceptional companies and it's been that way for a while.
 
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Cad

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M Power said:
This is almost always the case. The market is held up by a small amount of exceptional companies and it's been that way for a while.
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Which is why you buy the index so you are auto-rotated into the successful ones rather than trying to pick them.

Also stocks are trading at ATH's like most of the time like Gravel Gravel said... doesn't take Nostradamus level ability to say at some point we're going to have a correction... just keep saying it and eventually you'll be right.

There I just exposed 90% of financial reporting for you.
 
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Gravel

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I've said it many times over the years, too, but people really want to overcomplicate it. "Throwing it into an index sounds too easy, there's got to be more fiddling I can do that makes it successful." Whether that's day trading or trusting a financial advisor. Everyone thinks surely there's more to it and the indexing advice just sounds way too easy to work.

It's a gift that we've been able to take advantage of it, because we're the first generation to be able to really invest this way (previously you did have to go through some major brokerage and pay a ton in fees).
 
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Cad

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Gravel said:
I've said it many times over the years, too, but people really want to overcomplicate it. "Throwing it into an index sounds too easy, there's got to be more fiddling I can do that makes it successful." Whether that's day trading or trusting a financial advisor. Everyone thinks surely there's more to it and the indexing advice just sounds way too easy to work.

It's a gift that we've been able to take advantage of it, because we're the first generation to be able to really invest this way (previously you did have to go through some major brokerage and pay a ton in fees).
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The first index fund launched with Vanguard in 1976, so yes, but we're not the first. Boomers would have been the first.
 
Khane

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I think he means invest on our own without needing to go through a broker/financial adviser. Though E-Trade is a lot older than I thought it was, launched in 1992.
 
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M Power

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Khane said:
I think he means invest on our own without needing to go through a broker/financial adviser. Though E-Trade is a lot older than I thought it was, launched in 1992.
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I remember hearing my friends parents talk about etrade as a kid and it blew my mind.
 
Synj

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Gravel said:
I've said it many times over the years, too, but people really want to overcomplicate it. "Throwing it into an index sounds too easy, there's got to be more fiddling I can do that makes it successful." Whether that's day trading or trusting a financial advisor. Everyone thinks surely there's more to it and the indexing advice just sounds way too easy to work.

It's a gift that we've been able to take advantage of it, because we're the first generation to be able to really invest this way (previously you did have to go through some major brokerage and pay a ton in fees).
Click to expand...
 
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Cad

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Khane said:
I think he means invest on our own without needing to go through a broker/financial adviser. Though E-Trade is a lot older than I thought it was, launched in 1992.
Click to expand...
E-trade is a broker? Or are you just saying without having to talk to a human?
 
TJT

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Yes, faggot ass places like Edward Jones won't let you sell anything without discussing it with the branch manager of your location directly.

My mom is a dumbass when it comes to investing but inherited a large portfolio that's at EJ. Those guys straight rob you taking almost 2% of your gains. Goes right over her head though.
 
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Cad

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TJT said:
Yes, faggot ass places like Edward Jones won't let you sell anything without discussing it with the branch manager of your location directly.

My mom is a dumbass when it comes to investing but inherited a large portfolio that's at EJ. Those guys straight rob you taking almost 2% of your gains. Goes right over her head though.
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Reading up on that initial vanguard index fund from 1976, it seems like the initial management fees were about 0.43%, which is higher than now but dramatically lower than the actively managed funds of the time. They also sold it through brokerages at first, but after 6 months did direct sales and offered no-load funds. Definitely wasn't as good as today, but those brokerages were fucking ridiculous.

That Edward Jones stuff sounds familiar. When I first started making real money I had co-workers pushing me to hire this financial advisor that cost $5k/yr base + 1% of gains, they all used him. Getting locked into those kind of deals is why they are all still working and I had my retirement party Tuesday.
 
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M Power

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Cad said:
Reading up on that initial vanguard index fund from 1976, it seems like the initial management fees were about 0.43%, which is higher than now but dramatically lower than the actively managed funds of the time. They also sold it through brokerages at first, but after 6 months did direct sales and offered no-load funds. Definitely wasn't as good as today, but those brokerages were fucking ridiculous.

That Edward Jones stuff sounds familiar. When I first started making real money I had co-workers pushing me to hire this financial advisor that cost $5k/yr base + 1% of gains, they all used him. Getting locked into those kind of deals is why they are all still working and I had my retirement party Tuesday.
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My mom has a wealth manager to maintain her retirement shit. I'm pretty sure her entire financial plan is to just maintain the same income no matter what the market does until she dies. It has worked out rather well for her so far. There are some funds she has that I still don't fully understand but they aren't typical investment style accounts to make money. Almost like an insurance. Either way it's all going to me when she's gone and the wealth manager is being cut out. He gets 1% but no yearly base.
 
Cad

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M Power said:
My mom has a wealth manager to maintain her retirement shit. I'm pretty sure her entire financial plan is to just maintain the same income no matter what the market does until she dies. It has worked out rather well for her so far. There are some funds she has that I still don't fully understand but they aren't typical investment style accounts to make money. Almost like an insurance. Either way it's all going to me when she's gone and the wealth manager is being cut out. He gets 1% but no yearly base.
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A lot of advisors do try to sell you whole life insurance policies as investment vehicles, mostly because the fees and their rake are insane.

We are living on a budget for the next 5-6 years until I can sell our house, but it's mostly out of caution and because I have no idea how long we're going to live or if there's a black swan event, and I'm over-careful with money. We're certainly not scraping by so the budget is not too bad, but the entire key is not "I have enough to make my budget so I'll just spend that no matter what and be happy." That leads you to lifestyle creep. Just buy stuff that makes sense even if you "could" afford much better, and money just piles up because you're not spending it on dumb shit.

It's such a simple philosophy that is hard to do in practice because it involves saying no to people and to dumb shit you don't need, and our entire society is oriented around extracting money from you. Saying no to that is difficult.
 
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