Stock market

Historically, as noted, the market fears change and uncertainty. One of the results will be similar to what we have, one will not. The market will react accordingly (most likely).

Unless you are in dire need of you money in the near future, stay the course is a good idea. This of course applies to most any day.

Trying to time the market is speculating, not investing. Speculating can reward big, but it can result in big losses. Most investors are better off buying low cost index funds and having a good mix of stocks and bonds. Vanguard is the best place for that, IMHO. Stay away from brokers, especially the Raymond James types. They'll end up making more money on your money than you will. Buying individual stocks is not for those that don't do a lot of research and aren't looking at the market on a daily basis.

My father bought stock in an oil field service company at his broker's recommendation. Dividends paid 10%. Until the oil crash. Dad says his losses in that stock alone wiped out 30 years of gains in his portfolio. His broker didn't even say he was sorry. I've now convinced him to go to Vanguard after his broker recommended a tax exempt bond fund that paid the broker 1% in commissions and was mostly junk bonds.

To echo Basil's point - stay away from individual stocks, even for the pros that's usually a no-no in their retirement portfolio. While the reward is potentially higher, the risk that comes with single stock investments is disproportionally high compared to the difference in returns you get over the right mix of index funds. Even the professional traders I know - and I'm not talking about Joe DayTrader here, but traders at investment banks - basically only use their play money for single stocks and other risky bets.

I'm a big fan of index funds and I have my own money in low index funds with three of the big low-cost brokers myself. That said, not all index funds are created equal and there's been a recent fad to create new index funds that track obscure indices (of the "Silicon Valley penny stocks with 5% Elbonian mud futures" kind) or my other "favourite" kind, the leveraged index. Those are not the index funds that people like John Bogle talked about and I give them as wide a berth as I can personally unless we're talking play money again.

One other thing, trading is not investing. Pretty much the only time there is any activity on any of my investment accounts is when I contribute new funds or rebalance my portfolio which I only do about once a year. Trading is a good way to crater your portfolio because you're chasing the new hotness in most cases. Be the tortoise.

Oh, and as we're throwing out resources - another resource I like is Paul Merriman's website and his podcasts.

Disclaimer - I've worked in the finance industry on the trading side since '99, although I just quit what might have been my last job in that industry. I'm not a financial advisor. The stuff above is what works for me after having seen up close how the sausage is made.

I was told not to invest money in things that I did not understand. The market stopped making sense somewhere in the early years of this century. So I got out. Here are some things that I DO know about the stock market:

It is run by a bunch of people who do not have to answer to any laws. Of this I am admittedly jealous.

It is the one segment of the economy where crime IS rewarded. Once again, jelly here.

The stock market can not live without zero interest rates. Like the Terri Schiavo case where they kept a dead person on life support while the family fought the courts.

Stock price engineering trumps company value. I do admire engineering of any sort so I gotta admire some of the clever houses of cards being built.

The average "Aunt Millie” (look it up) investor does not have a clue what a "Derivative" is but their money is tied up in them.

People are stupid enough to equate the stock market and the economy as if they were the same thing.

Wells Fargo...poster child for the Street; busted! ( only the very naive would think it is limited to WF or that it was not premeditated from the boardroom. Think about this Warren Buffet: victim or mastermind in this scam?)

In its current state, the market is a carrion eater living off the corpse of the middle class that died in 2008.

The stock market is pretty much the pedophile club that bought out all the daycare centers and opened their own so you had no choice but to drop the kids there on the way to work.

In reply to NOHOME:

Agreed.

People like to claim "investing has changed." There's always a big market shattering event. Some subset of people will always say, "buy and hold is dead," or "it's a rich man's game." But people keep investing and returns keep being made. It's a decades long commitment that few people like to make and stick with.

Amazingly enough the people making the doom and gloom proclamations about the market do not often come up with ideas about where to park one's retirement money. Should we be stuffing it in mattresses? Ammo? Dried beans and rice in the basement? What's the 30 year average annual return on a shed full of beans?

NOHOME wrote: The stock market can not live without zero interest rates.

Sure. If I could make 8% on a regular savings account, like I did in the 80s, I wouldn't be in the market at all.

dculberson wrote: People like to claim "investing has changed." There's always a big market shattering event. Some subset of people will always say, "buy and hold is dead," or "it's a rich man's game." But people keep investing and returns keep being made. It's a decades long commitment that few people like to make and stick with. Amazingly enough the people making the doom and gloom proclamations about the market do not often come up with ideas about where to park one's retirement money. Should we be stuffing it in mattresses? Ammo? Dried beans and rice in the basement? What's the 30 year average annual return on a shed full of beans?

I can tell you that 30 years of living way below your means and never going into debt works out to. A big comfy mattress and a "I don't give a berkeley" mentality.

So add up every penny of interest that you have spent in the last 30 years and get back to me, cause that would be the return.

NOHOME wrote:

dculberson wrote: People like to claim "investing has changed." There's always a big market shattering event. Some subset of people will always say, "buy and hold is dead," or "it's a rich man's game." But people keep investing and returns keep being made. It's a decades long commitment that few people like to make and stick with. Amazingly enough the people making the doom and gloom proclamations about the market do not often come up with ideas about where to park one's retirement money. Should we be stuffing it in mattresses? Ammo? Dried beans and rice in the basement? What's the 30 year average annual return on a shed full of beans?

I can tell you that 30 years of living way below your means and never going into debt works out to. A big comfy mattress and a "I don't give a berkeley" mentality. So add up every penny of interest that you have spent in the last 30 years and get back to me, cause that would be the return.

Barking up the wrong tree there; I live way below my means and invest. Without any investment returns how do you plan to live on your savings? Frittering away the principal?

I have zero borrowed money except for a mortgage, and only keep that because it costs less than my investments return. So I'm ~3% positive, annually, on average so far keeping a mortgage.

You can work more than you have to all you like, but don't act like it's the smart thing to do and it makes you an expert.

Wells Fargo has now been named twice in this thread as the bad guys. You realize recent events were Wells Fargo Bank? Wells Fargo Investments is different, and not in trouble.

Since this thread is about investing, I don't think Wells Fargo Bank problems are very relevant.

dculberson wrote:

Huckleberry wrote: I lost half my retirement in the last crash. It didn't come back. "Buy and hold" is a myth that companies who are in the fund investment business need to propagate to keep the free, easy money in the market to invest with for themselves.

If you lost half your retirement and it didn't come back then you either didn't hold (ie, sold at the bottom) or didn't have a diversified portfolio. I'm not even aware of a way you could have had your retirement drop and not come back up but not go away entirely. What on earth did you have it in? The stock market has had incredible returns since the last crash. It gained all it's losses back in a few years and then went well beyond them.

To put numbers to it, the SP 500 is up 37% over the pre-crash peak. For those doing regular investing (401k, for example), the crash meant a lot of buying at a discount. The SP has tripled off its low.

That said, the most wealthy man I personally know shifted to 50% cash at the beginning of October. I decided I'm not that smart - I'm at 20%.

To get back to the original question, the market has been pricing in the outcome of the election already. The S&P is up 2% today on the Comey e-mail news. Investors see much more risk in a Trump presidency and are showing confidence that Clinton will win. A Trump win would crater the market initially. How long that would continue is anyone's guess.

&&

In reply to mfennell:

Right. Wall Street doesn't like the policies she will bring, but they truly hate unpredictability. She's predictable. He's not.

NOHOME wrote: I was told not to invest money in things that I did not understand. The market stopped making sense somewhere in the early years of this century. So I got out. Here are some things that I DO know about the stock market: It is run by a bunch of people who do not have to answer to any laws. Of this I am admittedly jealous. It is the one segment of the economy where crime IS rewarded. Once again, jelly here. The stock market can not live without zero interest rates. Like the Terri Schiavo case where they kept a dead person on life support while the family fought the courts. Stock price engineering trumps company value. I do admire engineering of any sort so I gotta admire some of the clever houses of cards being built. The average "Aunt Millie” (look it up) investor does not have a clue what a "Derivative" is but their money is tied up in them. People are stupid enough to equate the stock market and the economy as if they were the same thing. Wells Fargo...poster child for the Street; busted! ( only the very naive would think it is limited to WF or that it was not premeditated from the boardroom. Think about this Warren Buffet: victim or mastermind in this scam?) In its current state, the market is a carrion eater living off the corpse of the middle class that died in 2008. The stock market is pretty much the pedophile club that bought out all the daycare centers and opened their own so you had no choice but to drop the kids there on the way to work.

This really smacks of sour grapes. Let's keep the flat fish stuff out of this thread.

SVreX wrote: In reply to mfennell: Right. Wall Street doesn't like the policies she will bring, but they truly hate unpredictability. She's predictable. He's not.

If by predictable you mean "Paid off already"

Careful... I think I hear a concrete mixer starting up...

Just look at the market today, and what news recently came out, confirming some of the statements above. The market is betting on "same". Note: the "market" is not always right, if they are wrong, expect another dump for uncertainty.

dculberson wrote:

NOHOME wrote: I can tell you that 30 years of living way below your means and never going into debt works out to. A big comfy mattress and a "I don't give a berkeley" mentality. So add up every penny of interest that you have spent in the last 30 years and get back to me, cause that would be the return.

Barking up the wrong tree there; I live way below my means *and* invest. Without any investment returns how do you plan to live on your savings? Frittering away the principal? I have zero borrowed money except for a mortgage, and only keep that because it costs less than my investments return.

All of this.

Gary wrote: I'm a strong believer in holding a good investment. Hold it forever as long as it's performing. Sell it if it isn't. Simple. If it's growing and also paying a dividend, that's even better. That strategy has worked for me for the past 40 years. Now I'm retired, living off dividends. Living pretty well, in fact. But creating wealth is more than making good investments and holding them. You also need to live within your means for the forty or so years leading up to retirement. If you score big on an investment, reinvest the winnings instead of splurging on new toys. (Just my opinion based on experience).

I've been discussing this topic with Annie, and I probably should make amends. So I'm critiquing my own previous post, which, in my opinion, should be unimpeachable, . Nevertheless, please allow me to say this: once you have your financial affairs in order, at least a good plan and sticking to it, then enjoy life. Only you know if you're in good financial shape. So if you have some spare s'carole on hand, then enjoy life as you're going through it.

(But make damn well sure you have enough to live on in retirement ).

Fueled by Caffeine wrote:

NOHOME wrote: I was told not to invest money in things that I did not understand. The market stopped making sense somewhere in the early years of this century. So I got out. Here are some things that I DO know about the stock market: It is run by a bunch of people who do not have to answer to any laws. Of this I am admittedly jealous. It is the one segment of the economy where crime IS rewarded. Once again, jelly here. The stock market can not live without zero interest rates. Like the Terri Schiavo case where they kept a dead person on life support while the family fought the courts. Stock price engineering trumps company value. I do admire engineering of any sort so I gotta admire some of the clever houses of cards being built. The average "Aunt Millie” (look it up) investor does not have a clue what a "Derivative" is but their money is tied up in them. People are stupid enough to equate the stock market and the economy as if they were the same thing. Wells Fargo...poster child for the Street; busted! ( only the very naive would think it is limited to WF or that it was not premeditated from the boardroom. Think about this Warren Buffet: victim or mastermind in this scam?) In its current state, the market is a carrion eater living off the corpse of the middle class that died in 2008. The stock market is pretty much the pedophile club that bought out all the daycare centers and opened their own so you had no choice but to drop the kids there on the way to work.

This really smacks of sour grapes. Let's keep the flat fish stuff out of this thread.

So how many times must it be demonstrated to us that there is no rule of law before we are allow to say so out loud?

SVreX wrote: Wells Fargo has now been named twice in this thread as the bad guys. You realize recent events were Wells Fargo Bank? Wells Fargo Investments is different, and not in trouble. Since this thread is about investing, I don't think Wells Fargo Bank problems are very relevant.

Actually, you missed the trick here. The real WF endgame (and payoff) was the engineering of the stock price. The fake account thing was small potatoes that had to happen in order for the stock price manipulation. Don't worry, nobody will go to jail and a smart person would buy a E36 M3load of WF in the near future.

Like I said, I am still on the fence as to whether Warren Buffet was a victim or a mastermind behind the whole stock price game? He would have had to been aware of the fake account thing.

aircooled wrote: Just look at the market today, and what news recently came out, confirming some of the statements above. The market is betting on "same". Note: the "market" is not always right, if they are wrong, expect another dump for uncertainty.

You see the market reacting to news. I see a manipulated and managed artificial jump in stock prices that was engineered to inspire confidence in the economy and a particular candidate that was then broadly trumpeted by the propaganda department, I mean the media. Based on the reported headlines it was nearly the greatest rally in stock market history, but in reality it went back to where it was just last week. So, in other words there was really nothing to report, but they insisted on making a story out of it because they could spin it in support of their candidate. We do not have a stock market. It is a managed and controlled casino for everyone who is not an insider.

NOHOME wrote:

SVreX wrote: Wells Fargo has now been named twice in this thread as the bad guys. You realize recent events were Wells Fargo Bank? Wells Fargo Investments is different, and not in trouble. Since this thread is about investing, I don't think Wells Fargo Bank problems are very relevant.

Actually, you missed the trick here. The real WF endgame (and payoff) was the engineering of the stock price. The fake account thing was small potatoes that had to happen in order for the stock price manipulation. Don't worry, nobody will go to jail and a smart person would buy a E36 M3load of WF in the near future. Like I said, I am still on the fence as to whether Warren Buffet was a victim or a mastermind behind the whole stock price game? He would have had to been aware of the fake account thing.

You're right, I did miss the trick. I appreciate you explaining it.

So, what you are saying is that a company tried to influence its stock price? Isn't that what every company does?

I am not excusing fraud, but I don't see why that makes WF the Evil One incarnate.

The fact that WF did something inappropriate means they should face appropriate consequences, not be used as de facto proof that the stock market is rigged against us all and we should all therefore stuff our money in our mattresses.

In reply to T.J.:

So here we have more jeremiads about how terrible the stock market is, but still no actual data or proof or sources or suggestions on what to do about it or where to invest your money. If you have actual money that you hope to retire on it needs to be put to productive use. Use that isn't another job for you, the person saving their money.

My problem with these complaints is that they are just complaints. They don't help, they're not constructive, and they aren't that interesting. So what are you trying to tell the OP? He should sell his stocks and put the money into what, exactly?

I know it's difficult to imagine, but it's just possible that all the crazy media coverage about the "rally" and what not is just like any other media coverage: the result of dozens of decades old news sources desperate for material to publish that they can try to stay relevant and point to as a reason for them to exist and for you or advertisers to give them money. Read any mainstream financial news (but don't expect to be educated by it!) and you'll see a .1% drop in the market leads to dozens of articles about how this extended bear market might last forever, why it's going to be the next crash, why the smart money says leading indicators are positive/negative/etc. Then the next day there's a .1% spike and it's the best rally ever, things are so rosy, don't count on it going up any more, it's a dead cat bounce, we're in the shoulder of a head and shoulders chart, etc. It's all worthless to you and me and every average investor. But that doesn't mean it's some sort of insidious multi-industry cabal conspiring to get a certain person elected or engineer some sort of legislative change. That's crazy talk up there with birthers and Bush did 9/11.

The fact that WF did something inappropriate means they should face appropriate consequences, not be used as de facto proof that the stock market is rigged against us all and we should all therefore stuff our money in our mattresses.

My point is that there will be no appropriate consequences; Wall Street and its banks are above the law. So should that prove to be the case that there are no consequences, would you not then agree that the game IS rigged? I may be wrong, but I believe the "Too big to prosecute" defense is now ingrained in US case law as a valid defense strategy. I struggle to envision what "appropriate" consequences would be even for even the trivial matter of 2 million cases of identity theft that WF have admitted to, let alone the greater game of engineering the stock price based on the scam.

My other point would be "How did it come to be that the Stock markets of the world have come to be the only place to put your money other than under the mattress? Would you argue that it was not engineered to happen that way?

by the way, under the mattress is the accepted method on non-traditional banking. Stuffing the mattress full of cash results in a very lumpy mattress.

I think I hear a deck being poured...

In reply to NOHOME:

I absolutely do not believe the game is rigged. That would suggest a conspiracy on such a massive world-wide scale that it's just not possible.

I DO believe, however, that there are some very big players with tremendous resources (money, intellect, equipment, knowledge, political influence, etc) who win most of the time. Some of whom commit crimes, and are sometimes not caught. They create a massive extremely complicated game that works very well for them, and that most of us can still benefit from on a much smaller scale if we play by some basic rules.

It's the same as any system. Politics has it's giants. Sports have their dynasties. Entertainment has it's influence brokers. Farming has it's lobbyists. Every industry has big players who influence the game mightily.

You wouldn't call baseball rigged because the Yankees have won many years, nor because the Cubs spent a century without a win.