The Investment Thread

[alta-pete]

3 hours ago, SH Panda said:

For context, the FTSE is up about 9% on the last year, the Dow is up 16% and the Nasdaq 30%.

Over five years the figures are 14%,  55% and 127% respectively.

 

Salty tears on my part I know as I’ve missed out on the US markets’ run but there can be no credible way how these to indexes can continue such stellar performances?

Unless they eventually just hoover up everything leaving the rest of the world’s stock markets as pale husks? 

But then, eggs and baskets…

[beefybake]

16 hours ago, Molotov said:

Without you going into too much detail or handing me your ID and password…..  

My first thought is that either

a) you have not set up your account to automatically reinvest your dividends 

b) you’ve a portion of cash that you either deposited or sold investments previously but not bought new assets 

Is it a significant value?

I sometimes leave a portion of cash to pay quarterly fees rather than sell off any assets. 

Always worth sending the platform advisers a question if confused. They at least can see what the issue may be.

As the OP's fund is 'accumulating' , then there won't be any dividends distributed from that, they're all automatically reinvested within the fund.

The 'available cash' must therefore have come from the other things you mention. 

When investing in the Vanguard S&P 500 Tracker,  you choose which version you want....

(Ticker)  VUAG  -   Accumulation   or

(Ticker) VUSA  -    Income      ( Pays dividends )

 

Edited May 30 by beefybake

[Molotov]

2 hours ago, beefybake said:

As the OP's fund is 'accumulating' , then there won't be any dividends distributed from that, they're all automatically reinvested within the fund.

The 'available cash' must therefore have come from the other things you mention. 

When investing in the Vanguard S&P 500 Tracker,  you choose which version you want....

(Ticker)  VUAG  -   Accumulation   or

(Ticker) VUSA  -    Income      ( Pays dividends )

 

Yeah. That was also my first thought. But it makes no sense if they are increasing in cash outside the investments. So I was trying to get him to expand more. Perhaps someone is just depositing free cash into his account.  

[TxRover]

13 hours ago, SH Panda said:

It's actually quite a hard one to guage, even in those past 5 years there's been a global pandemic, multiple wars and energy shortages. It hasn't been end of history 1990s stuff. And, understandably, there has been some negative years in that period. The pandemic especially hard to react to as really the first in the modern stock market (post 1920s).

A lot of publications will say that current sky high valuations are bad news for long term growth, which makes sense, but they have been pitching the same line for at least 8 years.

Past performance is not an indication of future returns and the access of capital has been massively increased by the internet and ETFs.

A word of caution for those eyeing up the AI boom, there are some analogues to the dotcom boom (have a look as the Cisco share price) - investors were right that the internet did transform the world, but many still lost out. Could well be the same with AI which does look a transformative technology.

For me the biggest risk is the Geopolitical tension between the US and China, globalisation got a bad rap but it actually made most of the world a lot richer.

There is no time too late to get in the market, I'd encourage anyone to invest. When I started investing I thought I had missed out on the US boom - there's usually another one.

And if you're worried about long term market performance, how much of the world do you think invests in the stock market? In the US it's 61%, globally it's probably less than 5%. Still a long way to go.

The view of some "experts" that I keep an eye on right now is that the U.S. stock market is reaching a leveling point after the recent run ups. Their strategies are invest until triggers are reached and then pull back to lock in your gains until the next favorable conditions manifest. It's a recipe for steady growth, if you follow the right timings, and avoiding the built-in losses of Buy and Hold. The gentleman whose predictions I most respect has outperformed the market 27 of 30 years now, not by a tremendous amount, but steadily. The changes in investing, and what the free flow of liquidity did over the past 10 years, resulted in those 3 down years being recent...but he's back to steady returns, He's recommending an S&P500 tracker right now, with a move to a cash equivalent position likely coming soon.

[beefybake]

44 minutes ago, TxRover said:

The view of some "experts" that I keep an eye on right now is that the U.S. stock market is reaching a leveling point after the recent run ups. Their strategies are invest until triggers are reached and then pull back to lock in your gains until the next favorable conditions manifest. It's a recipe for steady growth, if you follow the right timings, and avoiding the built-in losses of Buy and Hold. The gentleman whose predictions I most respect has outperformed the market 27 of 30 years now, not by a tremendous amount, but steadily. The changes in investing, and what the free flow of liquidity did over the past 10 years, resulted in those 3 down years being recent...but he's back to steady returns, He's recommending an S&P500 tracker right now, with a move to a cash equivalent position likely coming soon.

There are no losses until you sell.  Someone is bullsh*tting here.   Is it you, or the 'expert' ?

For the average investor, trying to time the market is, over time, a mugs game.

 

 

 

[TxRover]

21 minutes ago, beefybake said:

There are no losses until you sell.  Someone is bullsh*tting here.   Is it you, or the 'expert' ?

For the average investor, trying to time the market is, over time, a mugs game.

Correct about losses. However, if you are willing to accept missing the big swing days, using indicators to be in the market for uptrends and being out for down trends can certainly out perform buy and hold. An example would be my selling at a 18% loss during the 2008 collapse, and then buying back in at a point when it was still well below that point when the slow recovery had begun. Compared to buy and hold, I had a net positive of about 13%. Now, would I count on this, not at my current age due to a reduced period where I could recover from a major drop. But with 10-15 years before retirement, it was worth being in the market while trying to avoid massive losses.

It was because of this event that I started looking around for answers, and found a number of advisors who called the drop. I then dug into their forecasts and recommendations and found three that showed consistently good results in limited forecasting. The particular advisor I now track operates under the limits of a Federal retirement plan, limiting movements between funds to  twice a calendar month. As you can see, with those kind of limits, he has to be very deliberate on strategy and cannot jump on short-term trends.

The key here is it isn’t market timing, but instead it’s about market positioning. Market timing is jumping multiple times a month, week or day…market positioning is about looking at long-term market trends and riding the tide higher and parking onshore when the tide is going out.

[beefybake]

15 minutes ago, TxRover said:

Correct about losses. However, if you are willing to accept missing the big swing days, using indicators to be in the market for uptrends and being out for down trends can certainly out perform buy and hold. An example would be my selling at a 18% loss during the 2008 collapse, and then buying back in at a point when it was still well below that point when the slow recovery had begun. Compared to buy and hold, I had a net positive of about 13%. Now, would I count on this, not at my current age due to a reduced period where I could recover from a major drop. But with 10-15 years before retirement, it was worth being in the market while trying to avoid massive losses.

It was because of this event that I started looking around for answers, and found a number of advisors who called the drop. I then dug into their forecasts and recommendations and found three that showed consistently good results in limited forecasting. The particular advisor I now track operates under the limits of a Federal retirement plan, limiting movements between funds to  twice a calendar month. As you can see, with those kind of limits, he has to be very deliberate on strategy and cannot jump on short-term trends.

The key here is it isn’t market timing, but instead it’s about market positioning. Market timing is jumping multiple times a month, week or day…market positioning is about looking at long-term market trends and riding the tide higher and parking onshore when the tide is going out.

More BS.   You're referring to 'momentum investing', which is simply another variation of trying to time the market.

[TxRover]

27 minutes ago, beefybake said:

More BS.   You're referring to 'momentum investing', which is simply another variation of trying to time the market.

You are entitled to your opinion. I see 27 out of 30 years investing with returns above the market. Not massively above, but net over the time is over +40% versus buy and hold…and that includes the 3 down years. Do as you wish, but I bought and held in the dot com bubble and lost nearly 43% of my account balance…a co-worker lost 17%. Every year since that, until she retired, her balance returned more than mine because of the 26% drop she avoided. In the end, she retired with $330,000 more than me for equal contributions. She was following this advisor the entire period, and most of the time went months between asset rebalancing.

Invest as you desire, but don’t just follow the herd without doing due diligence on your options.

[Granny Danger]

4 minutes ago, SH Panda said:

For me the bulk of evidence is that timing the market, or however you want to phrase it, doesn't work for the majority of professionals never mind the amateurs.

And the UKs star asset manager for decades was, eh, Neil Woodford. There's enough of them that some get lucky, rather than being good.

Still bash on, you're not hurting anyone. If I had the balls to do it I would.

I read the book about Woodford recently, totally the architect of his own downfall.

[TxRover]

While talking about timing and such, the Hindenburg Omen has triggered. Successfully predicting 1987 and 2008, this is a complex formula that looks for unusually high numbers of record lows AND record highs in the market at the same time. The theory being a healthy market has some of each, but also a generally common placement (lots of highs or lots of lows at the same time) of results. The unusually high number of extremes, corrected for total market size, is considered by many to indicate fundamental problems in the market.

So, will this be the trigger that invalidates the indicator, or is the market f**ked?

[TxRover]

On 02/06/2024 at 00:58, SH Panda said:

There are thousands of such indicators, they get it right until they don't.

It reminds me of the Simpsons episode where the gambling genius sends out cards to predict every NFL result, eventually a small group of people only get the winners and think the person sending is a genius and pay to join such scam.

Will the market crash? Oh yeah definitely, probably many times. Idk when and I'm not too keen to predict it.

Someone will get it right, no doubt, given someone predicts a crash every week or so.

If you're still in the accumulation phase market crashes are arguably good things, and as per one of my posts earlier in the thread - it's arguably good for society as a whole too.

The problem now is that the programs, and high income individuals that subscribe to systems that constantly arbitrage the system, are where most of the money is being made. Those smaller investors unable to nimbly jump get hammered by faster and faster changes in values, while the buy and hold crowd steadily gets a modest return until the worm turns and the roller coaster starts again.

I just found this particular “indicator” interesting because it hit on a pair of very big whoopsies in the market, and the basis for the indicator is quite interesting. More highs AND lows at the same time is an interesting metric, especially when corrected to market size. Plus, we’re getting into the 20 year range since a real gut-wrencher, so the market is populated by happy-clappers who have know littlE but easy money, inflated returns.

[beefybake]

2 hours ago, TxRover said:

The problem now is that the programs, and high income individuals that subscribe to systems that constantly arbitrage the system, are where most of the money is being made. Those smaller investors unable to nimbly jump get hammered by faster and faster changes in values, while the buy and hold crowd steadily gets a modest return until the worm turns and the roller coaster starts again.

I just found this particular “indicator” interesting because it hit on a pair of very big whoopsies in the market, and the basis for the indicator is quite interesting. More highs AND lows at the same time is an interesting metric, especially when corrected to market size. Plus, we’re getting into the 20 year range since a real gut-wrencher, so the market is populated by happy-clappers who have know littlE but easy money, inflated returns.

Seems to be some kind of fundamental misunderstanding here as to how the 'little guy' can 'win' in the stock market.

In fact the way to do it is, and always has been, quite simple....

1. Spend less than you earn.

2. Eliminate debt..., credit cards, car finance etc., other than, perhaps, a mortgage on a home.

3. Save money, and invest regularly and steadily, through the ups and downs of the stock market, in low fee passive index tracker funds., preferably All World/Global for a UK investor. 

How rich you get depends on...

a)  How much you earn.

b)  What percentage of your income that you invest.  [ Many people view 10% as doing well. In fact, with not too much heavy budgeting, 20%, and + is often achievable without too much lifestyle 'distress'.]

c) How long you do all the above for.  Compounding is very much your friend. As is pound/cost averaging. [ie., if you're investing say £250 per month, that £250 will buy more shares when the market has fallen, and less shares when the market rises. Hence averaging over time ]

 

Read and learn to gain knowledge.

Edited June 3 by beefybake

[TxRover]

1 hour ago, beefybake said:

Seems to be some kind of fundamental misunderstanding here as to how the 'little guy' can 'win' in the stock market.

In fact the way to do it is, and always has been, quite simple....

1. Spend less than you earn.

2. Eliminate debt..., credit cards, car finance etc., other than, perhaps, a mortgage on a home.

3. Save money, and invest regularly and steadily, through the ups and downs of the stock market, in low fee passive index tracker funds., preferably All World/Global for a UK investor. 

How rich you get depends on...

a)  How much you earn.

b)  What percentage of your income that you invest.  [ Many people view 10% as doing well. In fact, with not too much heavy budgeting, 20%, and + is often achievable without too much lifestyle 'distress'.]

c) How long you do all the above for.  Compounding is very much your friend. As is pound/cost averaging. [ie., if you're investing say £250 per month, that £250 will buy more shares when the market has fallen, and less shares when the market rises. Hence averaging over time ]

 

Read and learn to gain knowledge.

The rich don’t invest by buying fund shares, they do so by buying companies, or significant portions of them. Some utilize computerized solutions that arbitrage the market at speeds that the smaller investor cannot hope to match, allowing them to make money on small irregularities or movements within the market.

This is why timing the market has become a true fools errand. The day traders had their shot and now the computers rule with lightning fast transactions that take advantage of things that are available for as little as fractions of a second.

Buy and hold is (usually) a solid strategy for long-term returns. However, as investors in the Nikkei 225 found out, it can take over 30 years to just break even sometimes.

[Granny Danger]

Not sure if this is the right thread, but:

Shorting a stock - yeah, that’s fine.

Squeezing the short sellers - oh no, that’s market manipulation.

https://www.reuters.com/technology/etrade-considering-kicking-keith-gill-off-its-platform-wsj-reports-2024-06-03/

[Zetterlund]

8 hours ago, Granny Danger said:

Not sure if this is the right thread, but:

Shorting a stock - yeah, that’s fine.

Squeezing the short sellers - oh no, that’s market manipulation.

https://www.reuters.com/technology/etrade-considering-kicking-keith-gill-off-its-platform-wsj-reports-2024-06-03/

It's a bit of a cliché to say the markets are rigged, but they literally are and it's in plain sight. When this happened the first time around in 2021, certain platforms removed the option to buy these stocks when it got too painful for the big players.

I've always been surprised that short selling could even be legal. Being able to sell something you don't have is very obviously going to lead to all sorts of market manipulation. You now have short selling funds which, as a business model, publicly attack a company's reputation to trigger a sell-off of their shares. It's all very questionable.

[Granny Danger]

15 minutes ago, Zetterlund said:

It's a bit of a cliché to say the markets are rigged, but they literally are and it's in plain sight. When this happened the first time around in 2021, certain platforms removed the option to buy these stocks when it got too painful for the big players.

I've always been surprised that short selling could even be legal. Being able to sell something you don't have is very obviously going to lead to all sorts of market manipulation. You now have short selling funds which, as a business model, publicly attack a company's reputation to trigger a sell-off of their shares. It's all very questionable.

Yeah, Robin Hood was the big culprit first time around as that was the platform that most small traders were using.

Naked short selling is illegal (but apparently still practiced) but I’ve always found it hard to understand the mentality of institutions loaning their shares to someone knowing it’s their intention to drive the price of that share down.  Seems counter intuitive.

[beefybake]

32 minutes ago, Granny Danger said:

Yeah, Robin Hood was the big culprit first time around as that was the platform that most small traders were using.

Naked short selling is illegal (but apparently still practiced) but I’ve always found it hard to understand the mentality of institutions loaning their shares to someone knowing it’s their intention to drive the price of that share down.  Seems counter intuitive.

The shares are lent, not given. The fund/institution gets paid for the loan, and that helps the performance figures of the fund.

Yes, it is rather counter-intuitive.

[Alert Mongoose]

2 hours ago, Zetterlund said:

You now have short selling funds which, as a business model, publicly attack a company's reputation to trigger a sell-off of their shares. It's all very questionable.

To be fair at least a few of the shorting institutions have actually being doing it for the right reasons (eg Wirecard etc).  Arguably, potential investors were saved there.

Yes, it's too widespread but I think there is a valid place for it in an open market.

Edited June 5 by Alert Mongoose

[Granny Danger]

1 hour ago, beefybake said:

The shares are lent, not given. The fund/institution gets paid for the loan, and that helps the performance figures of the fund.

Yes, it is rather counter-intuitive.

Yeah, I said that in my post.

[beefybake]

2 hours ago, Granny Danger said:

Yeah, I said that in my post.

Indeed. No disagreement there.

Edited June 5 by beefybake