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U.S. Receives a Margin Call

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ericlp

Diamond Member
Dec 24, 2000
6,079
186
106
Originally posted by: blackangst1
Originally posted by: venkman
Everyone should make sure that a decent amount of their investments are diversified in foreign assets/money at this point.
I have a chunk in Latin America as well as the middle east (Dubai mostly) but last 6 weeks or so I have snatched up quite a few shares of dow jones stock...15-20% discount on fortune 500 companies is to good to pass up. Once again this bullshit of sell sell sell comes from the economic minds of children. You buy when the market is DOWN not up.
Yes, any one knows to buy low sell high. But you also have to understand the risks ... Just because buy.com last 10 years was at 2-3 cents share, who knew if it was going to bounce back ? Hind site is always 20/20... Tho... I am sure the dow has a long way to go to the bottom... Will it ever get past the point of the 15-20% discount where it was today? Doubt full... I think when it tanks the days of getting back up to even todays market is unrealistic ... That is where the (RISK) comes in, you may have to sit on it for 10+ years... Who knows tho it could bounce back sooner then later. I have over 10K in China. Hell, where else ya gonna get 8X your spending power? I've already doubled my profits... I still think China is a way better risk...

Good Luck!

 

Farang

Lifer
Jul 7, 2003
10,921
3
0
Originally posted by: Dissipate
Originally posted by: Farang
Originally posted by: Farang
Bringing up two examples does not prove an event isn't rare.
fixed.
Let me give you a more concrete example. Suppose a company that you want to invest in is about to release it's quarterly earnings report. Do you invest all your money before the announcement or all of it afterwards? If the earnings report is good the stock will probably go up, if it is bad the stock will probably go down. In the case of Sprint, for instance, after it announced a huge write down for Q4 07 the stock totally tanked.

If you don't put money in before the report you could miss out on some good gains, but if you put all your money in before the report you could suffer big losses. So the answer is that you put some of your investment funds in before the announcement and some after, but certainly not all at once. DCA spreads your investments out over a series of events/announcements that affect stocks. Each event carries risk so by spreading out your investment over those series of events you are effectively spreading your risk.
Yes, you've explained what dollar cost averaging is and I understand that. What the Wiki article was saying was that studies have shown the loss in long-term gains you incur isn't worth the reducing of what has proven to be a relatively small risk of the stock tanking after you buy it. So to prove your argument you need to show that the risks avoided through the use of dollar cost averaging are enough that the long-term losses can be worth taking--a trend needs to be cited, not one or two examples of the worst-case scenario.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: Farang
Yes, you've explained what dollar cost averaging is and I understand that. What the Wiki article was saying was that studies have shown the loss in long-term gains you incur isn't worth the reducing of what has proven to be a relatively small risk of the stock tanking after you buy it. So to prove your argument you need to show that the risks avoided through the use of dollar cost averaging are enough that the long-term losses can be worth taking--a trend needs to be cited, not one or two examples of the worst-case scenario.
Well for one thing, it depends on whether or not your investments are already diversified. If you are investing in index funds that cover hundreds of individual stocks, then the benefits of DCA are severely reduced. The reason why is that since you are investing in a large number of stocks at once, you are already investing in a huge number of individual events. If I had all the money I was ever going to invest in my index funds right now, I would put it all in right now, for the reason above: I'm not going to get completely hosed on one single earnings report.

Individual stocks are different though. Individual stocks are affected by a much smaller number of events. So you have to artificially increase the number of events you are exposed to within that individual stock (i.e. the quarterly earnings report scenario I mentioned before).

An article I read recently that criticizes DCA as an investment strategy criticized it using the example of an index fund nonetheless.
 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: ericlp
Originally posted by: blackangst1
Originally posted by: venkman
Everyone should make sure that a decent amount of their investments are diversified in foreign assets/money at this point.
I have a chunk in Latin America as well as the middle east (Dubai mostly) but last 6 weeks or so I have snatched up quite a few shares of dow jones stock...15-20% discount on fortune 500 companies is to good to pass up. Once again this bullshit of sell sell sell comes from the economic minds of children. You buy when the market is DOWN not up.
Yes, any one knows to buy low sell high. But you also have to understand the risks ... Just because buy.com last 10 years was at 2-3 cents share, who knew if it was going to bounce back ? Hind site is always 20/20... Tho... I am sure the dow has a long way to go to the bottom... Will it ever get past the point of the 15-20% discount where it was today? Doubt full... I think when it tanks the days of getting back up to even todays market is unrealistic ... That is where the (RISK) comes in, you may have to sit on it for 10+ years... Who knows tho it could bounce back sooner then later. I have over 10K in China. Hell, where else ya gonna get 8X your spending power? I've already doubled my profits... I still think China is a way better risk...

Good Luck!
You need to put some perspective when you say risk. Of course ALL investments have some kind of risk, Including FDIC insured CD's. Their risk is losing money to inflation. I choose to put most of my money in mutual funds which are about the safest there is. If my MF has 100 companies in it, what are the chances even 10 of them will go under without the managers knowing about it? None. sure they may sell at a loss, but the other 90 companies will make up for it. This is of course a crude simplification, but nevertheless. AFAIK there has only been 2 mutual funds that have completely gone under in the last 80 years.

And of course hindsight is 20/20. If investment strategy was a clear crystal ball everyone would be rich. But there are alot of things you can do to minimize your risk. Just ask Warren Buffett.
 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: Dissipate
Originally posted by: Farang
Yes, you've explained what dollar cost averaging is and I understand that. What the Wiki article was saying was that studies have shown the loss in long-term gains you incur isn't worth the reducing of what has proven to be a relatively small risk of the stock tanking after you buy it. So to prove your argument you need to show that the risks avoided through the use of dollar cost averaging are enough that the long-term losses can be worth taking--a trend needs to be cited, not one or two examples of the worst-case scenario.
Well for one thing, it depends on whether or not your investments are already diversified. If you are investing in index funds that cover hundreds of individual stocks, then the benefits of DCA are severely reduced. The reason why is that since you are investing in a large number of stocks at once, you are already investing in a huge number of individual events. If I had all the money I was ever going to invest in my index funds right now, I would put it all in right now, for the reason above: I'm not going to get completely hosed on one single earnings report.

Individual stocks are different though. Individual stocks are affected by a much smaller number of events. So you have to artificially increase the number of events you are exposed to within that individual stock (i.e. the quarterly earnings report scenario I mentioned before).

An article I read recently that criticizes DCA as an investment strategy criticized it using the example of an index fund nonetheless.
Wow. Thats backwards. Mutual funds are where you SHOULD DCA.

As far as single examples go...what about my shares of Yahoo I bought at $26/share? Who knew they grow 600% eh?
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: blackangst1


You need to put some perspective when you say risk. Of course ALL investments have some kind of risk, Including FDIC insured CD's. Their risk is losing money to inflation. I choose to put most of my money in mutual funds which are about the safest there is. If my MF has 100 companies in it, what are the chances even 10 of them will go under without the managers knowing about it? None. sure they may sell at a loss, but the other 90 companies will make up for it. This is of course a crude simplification, but nevertheless. AFAIK there has only been 2 mutual funds that have completely gone under in the last 80 years.

And of course hindsight is 20/20. If investment strategy was a clear crystal ball everyone would be rich. But there are alot of things you can do to minimize your risk. Just ask Warren Buffett.
You put your money in mutual funds? You are probably getting raped on fees as we speak.

Index funds via ETFs are much much better, tax wise & fee wise.

This article on mutual funds will shock you

This article is the best article I have ever read on long term investing. When all the dust settles, ETFs absolutely blow mutual funds out of the water, unless the MF is an index fund and has a low expense ratio, like the ones offered by Vanguard.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: blackangst1
Wow. Thats backwards. Mutual funds are where you SHOULD DCA.
Why is that? The funds I have invested in index funds that I have in my retirement accounts will not be touched for about 35 years. The short term change in price is not going to affect my returns very much over that period. In retrospect I'm not going to care if I bought into the Vanguard S&P 500 fund at $120 a share vs. $118 or even $112 a share. Your risk for an index fund is already reduced through diversification, and you are investing in long term growth, you probably aren't going to be completely clobbered by a single event, or at least the risk of this is much less than an individual stock.

The stock market bubble of 2001 was an exception, when the S&P 500 got out of control. But there were a number of signs that the bubble was not sustainable, including the P/E ratios.

 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: Dissipate
Originally posted by: blackangst1


You need to put some perspective when you say risk. Of course ALL investments have some kind of risk, Including FDIC insured CD's. Their risk is losing money to inflation. I choose to put most of my money in mutual funds which are about the safest there is. If my MF has 100 companies in it, what are the chances even 10 of them will go under without the managers knowing about it? None. sure they may sell at a loss, but the other 90 companies will make up for it. This is of course a crude simplification, but nevertheless. AFAIK there has only been 2 mutual funds that have completely gone under in the last 80 years.

And of course hindsight is 20/20. If investment strategy was a clear crystal ball everyone would be rich. But there are alot of things you can do to minimize your risk. Just ask Warren Buffett.
You put your money in mutual funds? You are probably getting raped on fees as we speak.

Index funds via ETFs are much much better, tax wise & fee wise.

This article on mutual funds will shock you

This article is the best article I have ever read on long term investing. When all the dust settles, ETFs absolutely blow mutual funds out of the water, unless the MF is an index fund and has a low expense ratio, like the ones offered by Vanguard.
Im not a fan of index funds personally. Fees? 1/2% of deposits? That aint getting raped.
 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: Dissipate
Originally posted by: blackangst1
Wow. Thats backwards. Mutual funds are where you SHOULD DCA.
Why is that? The funds I have invested in index funds that I have in my retirement accounts will not be touched for about 35 years. The short term change in price is not going to affect my returns very much over that period. In retrospect I'm not going to care if I bought into the Vanguard S&P 500 fund at $120 a share vs. $118 or even $112 a share. Your risk for an index fund is already reduced through diversification, and you are investing in long term growth, you probably aren't going to be completely clobbered by a single event, or at least the risk of this is much less than an individual stock.

The stock market bubble of 2001 was an exception, when the S&P 500 got out of control. But there were a number of signs that the bubble was not sustainable, including the P/E ratios.
OK

BTW every mutual fund is diversified. Some more than others, but all are, not just index funds.
 

Farang

Lifer
Jul 7, 2003
10,921
3
0
Originally posted by: Dissipate
Originally posted by: Farang
Yes, you've explained what dollar cost averaging is and I understand that. What the Wiki article was saying was that studies have shown the loss in long-term gains you incur isn't worth the reducing of what has proven to be a relatively small risk of the stock tanking after you buy it. So to prove your argument you need to show that the risks avoided through the use of dollar cost averaging are enough that the long-term losses can be worth taking--a trend needs to be cited, not one or two examples of the worst-case scenario.
Well for one thing, it depends on whether or not your investments are already diversified. If you are investing in index funds that cover hundreds of individual stocks, then the benefits of DCA are severely reduced. The reason why is that since you are investing in a large number of stocks at once, you are already investing in a huge number of individual events. If I had all the money I was ever going to invest in my index funds right now, I would put it all in right now, for the reason above: I'm not going to get completely hosed on one single earnings report.

Individual stocks are different though. Individual stocks are affected by a much smaller number of events. So you have to artificially increase the number of events you are exposed to within that individual stock (i.e. the quarterly earnings report scenario I mentioned before).

An article I read recently that criticizes DCA as an investment strategy criticized it using the example of an index fund nonetheless.
No one should put all of their money in one or two stocks, we could probably agree, so take your example of the index funds and simply apply it to your portfolio. You're not going to get hosed on an earnings report because you have many other stocks. However if you use dollar cost averaging on every one of your stocks, you're going to reduce your long-term benefits for the sake of reducing an already small risk.

I suppose we could argue over where using dollar cost averaging makes sense, if it only does if you've got 1-5 stock investments or if it does even if you've got 100 stock investments. I tend to think it only makes sense for the kind of people who should be investing in mutual funds anyway (those who are just starting and don't have the means for a large, diversified portfolio).
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: blackangst1
Im not a fan of index funds personally. Fees? 1/2% of deposits? That aint getting raped.
1/2% is getting raped compared to the iShares S&P 500 ETF which has an expense ratio of .09%. TextThat is 9/100ths of a percent. Before expense ratio and taxes this fund will beat about half of all mutual funds, and after taxes and expenses it will beat an even higher percentage. Studies have shown that actively managed mutual funds offer no major advantage over index funds. 90% of the mutual funds that do beat the market go back to market returns the next year, or even below market returns.

But of course you would know all of this if you actually read the article I linked you to earlier. Here is the pertinent sub-article: Text

 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: Dissipate
Originally posted by: blackangst1
Im not a fan of index funds personally. Fees? 1/2% of deposits? That aint getting raped.
1/2% is getting raped compared to the iShares S&P 500 ETF which has an expense ratio of .09%. TextThat is 9/100ths of a percent. Before expense ratio and taxes this fund will beat about half of all mutual funds, and after taxes and expenses it will beat an even higher percentage. Studies have shown that actively managed mutual funds offer no major advantage over index funds. 90% of the mutual funds that do beat the market go back to market returns the next year, or even below market returns.

But of course you would know all of this if you actually read the article I linked you to earlier. Here is the pertinent sub-article: Text
OK

I havent even heard of this guy or this website. I would rather take advice from a proven success - Warren Buffett

1. "There is no real feasible way to know whether the market is going to be up or down and when exactly to invest.

2. "The only logical way for an investor to make money is through the buy and hold approach. This method is used by Warren Buffett and he has consistently beaten the best with an average annual return of 29%.

3. "Dollar cost average helps to hedge against the ups and downs of the market; moreover, one should have been buying up stocks during the last 3 years, though I do agree with your cashing out at in 2000. I do not wish to insult you, but that seems to me more luck than intuition."

 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: blackangst1

OK

I havent even heard of this guy or this website. I would rather take advice from a proven success - Warren Buffett

1. "There is no real feasible way to know whether the market is going to be up or down and when exactly to invest.

2. "The only logical way for an investor to make money is through the buy and hold approach. This method is used by Warren Buffett and he has consistently beaten the best with an average annual return of 29%.

3. "Dollar cost average helps to hedge against the ups and downs of the market; moreover, one should have been buying up stocks during the last 3 years, though I do agree with your cashing out at in 2000. I do not wish to insult you, but that seems to me more luck than intuition."
Warren Buffet is a billionaire who can single handedly buy up and manage entire companies. Also, I don't see how any of those three quotes have anything to do with the advice in the article I posted. The advice in the article certainly agrees with 1 & 2.

Bottom line is I don't care if you read the article or not. You can remain ignorant and continue to pay for overpriced mutual funds.
 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: Dissipate
Originally posted by: blackangst1

OK

I havent even heard of this guy or this website. I would rather take advice from a proven success - Warren Buffett

1. "There is no real feasible way to know whether the market is going to be up or down and when exactly to invest.

2. "The only logical way for an investor to make money is through the buy and hold approach. This method is used by Warren Buffett and he has consistently beaten the best with an average annual return of 29%.

3. "Dollar cost average helps to hedge against the ups and downs of the market; moreover, one should have been buying up stocks during the last 3 years, though I do agree with your cashing out at in 2000. I do not wish to insult you, but that seems to me more luck than intuition."
Warren Buffet is a billionaire who can single handedly buy up and manage entire companies. Also, I don't see how any of those three quotes have anything to do with the advice in the article I posted. The advice in the article certainly agrees with 1 & 2.

Bottom line is I don't care if you read the article or not. You can remain ignorant and continue to pay for overpriced mutual funds.
ETF's are not the be all and end all of investments. There are reasons I dont like them. Im not saying theyre bad investments-they arent. Just not for me. Here's why:

ETF's are exchange traded and subject to a broker's fee or commisions. This is especially troublesome for the average investor who may make 6-12 purchases throughout the year. Mutual funds are not. If there is a back end load on the fund there will be, but there arent alot of those around.

ETF's can be shorted and bought on margin, which *can* influence the fund negatively.

The average joe cant buy directly from the ETF itself and must go through a broker. The same average joe can call up Vangaurd, AIM, Fidelity, etc and start investing with $25.00.

ETF's have a bid-ask spread. Mutual funds dont.

ETF's dont allow divident reinvestment. Mutual funds do.

ETF's cannot trade on futures which is a great market. Mutual funds can.

ETF's cannot be bought in odd lots. Mutual funds can.


So please stop your fanboi lectures. Thanks.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: blackangst1

ETF's are not the be all and end all of investments. There are reasons I dont like them. Im not saying theyre bad investments-they arent. Just not for me. Here's why:

ETF's are exchange traded and subject to a broker's fee or commisions. This is especially troublesome for the average investor who may make 6-12 purchases throughout the year. Mutual funds are not. If there is a back end load on the fund there will be, but there arent alot of those around.
Simple solution for this. Suppose you open a Vanguard Roth IRA fund account. You save up at least $3,000 and then buy their Vanguard index fund(s). Then, each month you contribute to these funds with no trading fees. Once your Vanguard fund(s) are well over $3,000 in value, you then open a Vanguard Roth IRA brokerage account, which will essentially be added to your fund account. For each fund well over $3,000, you sell off your shares until you are back down to the $3,000. You then buy into the equivalent ETFs, for instance IVV for the iShares S&P 500 ETF. Since you still have the minimum $3,000 in each of your vanguard funds you can continue to contribute without paying brokerage fees, but now the bulk of your investments are in the much cheaper equivalent ETFs.

ETF's can be shorted and bought on margin, which *can* influence the fund negatively.
Most of the major ETFs out there will not stray very far from their NAV or Net Asset Value. The reason why is because of arbitrage. Financial firms can buy up the underlying assets and exchange them for shares of the ETF, and vice versa. Therefore, any time the ETF gets too far away from it's NAV, there is a big opportunity for arbitrage. If you know anything about markets, such opportunities don't last very long, if they come up at all.

The average joe cant buy directly from the ETF itself and must go through a broker. The same average joe can call up Vangaurd, AIM, Fidelity, etc and start investing with $25.00.
See above. You can have both a fund account and a brokerage account at the same time. You get the benefit of avoiding trading fees with the low expense ratios of ETFs.

ETF's have a bid-ask spread. Mutual funds dont.
Bid ask spread is nothing compared to how much you will pay in the much higher expense ratios of mutual funds.

ETF's dont allow divident reinvestment. Mutual funds do.
You have to pay taxes on the dividends whether they are reinvested or not, so that doesn't matter much.

ETF's cannot trade on futures which is a great market. Mutual funds can.
Shows that you know nothing about ETFs. There are ETFs based on futures: Text

ETF's cannot be bought in odd lots. Mutual funds can.
Why the hell would I care about a 'lot' when I can buy an individual share of an ETF if I want to? If you can buy 1 share and any number of shares for that matter, you don't care about 'lots.' More evidence that you don't know about ETFs.


So please stop your fanboi lectures. Thanks.
Yeah, I'm a 'fanboi' because I actually do research and try to find the best value for my investment dollars, whereas you know nothing about that which you disparage. :roll:

 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: Dissipate
Originally posted by: blackangst1

ETF's are not the be all and end all of investments. There are reasons I dont like them. Im not saying theyre bad investments-they arent. Just not for me. Here's why:

ETF's are exchange traded and subject to a broker's fee or commisions. This is especially troublesome for the average investor who may make 6-12 purchases throughout the year. Mutual funds are not. If there is a back end load on the fund there will be, but there arent alot of those around.
Simple solution for this. Suppose you open a Vanguard Roth IRA fund account. You save up at least $3,000 and then buy their Vanguard index fund(s). Then, each month you contribute to these funds with no trading fees. Once your Vanguard fund(s) are well over $3,000 in value, you then open a Vanguard Roth IRA brokerage account, which will essentially be added to your fund account. For each fund well over $3,000, you sell off your shares until you are back down to the $3,000. You then buy into the equivalent ETFs, for instance IVV for the iShares S&P 500 ETF. Since you still have the minimum $3,000 in each of your vanguard funds you can continue to contribute without paying brokerage fees, but now the bulk of your investments are in the much cheaper equivalent ETFs.

Too fucking complicated. I'll stick with my DCA and 28% average since 1989 thanks though.

ETF's can be shorted and bought on margin, which *can* influence the fund negatively.
Most of the major ETFs out there will not stray very far from their NAV or Net Asset Value. The reason why is because of arbitrage. Financial firms can buy up the underlying assets and exchange them for shares of the ETF, and vice versa. Therefore, any time the ETF gets too far away from it's NAV, there is a big opportunity for arbitrage. If you know anything about markets, such opportunities don't last very long, if they come up at all.

OK

The average joe cant buy directly from the ETF itself and must go through a broker. The same average joe can call up Vangaurd, AIM, Fidelity, etc and start investing with $25.00.
See above. You can have both a fund account and a brokerage account at the same time. You get the benefit of avoiding trading fees with the low expense ratios of ETFs.

The average joe isnt going to do what you've outlined above. Too complicated. Shit...for alot of my clients just the basics of what a mutual fund IS was complicated.

ETF's have a bid-ask spread. Mutual funds dont.
Bid ask spread is nothing compared to how much you will pay in the much higher expense ratios of mutual funds.

Not necessarily.

ETF's dont allow divident reinvestment. Mutual funds do.
You have to pay taxes on the dividends whether they are reinvested or not, so that doesn't matter much.

Not necessarily. Also, WHEN they're taxed is a factor also. I would rather reinvest and let it compound for another 25 years than tax it now.

ETF's cannot trade on futures which is a great market. Mutual funds can.
Shows that you know nothing about ETFs. There are ETFs based on futures: Text

OK. A few issues I have, from the same site you listed above:
*Commodity ETNs (exchange traded notes) are non-interest paying debt instruments whose price fluctuates (by contractual commitment) with an underlying commodities index. Because they are debt obligations, ETNs are subject to the solvency of the issuer.* Uh no thanks.

*Commodities-related ETFs generally track the producers of commodities, such as mining companies. While the financial performance of those companies -- and thus their stocks -- may be highly leveraged to the underlying commodity, other factors can impact the profitability of production. The ETFs, therefore, may not reflect the performance of the underlying commodity uh no thanks Might as well trade on margin with the real thing. Much simpler.



ETF's cannot be bought in odd lots. Mutual funds can.
Why the hell would I care about a 'lot' when I can buy an individual share of an ETF if I want to? If you can buy 1 share and any number of shares for that matter, you don't care about 'lots.' More evidence that you don't know about ETFs.

do you understand lot pricing? If I want to invest $200, I couldnt do so unless buy price was exactly divisible by $200. thats what I mean by lot pricing. It's a big deal, and goes back to the PITA factor.

So please stop your fanboi lectures. Thanks.
Yeah, I'm a 'fanboi' because I actually do research and try to find the best value for my investment dollars, whereas you know nothing about that which you disparage. :roll:

No, youre a fanboi because instead of a reasonable argument like mine (they arent for everyone) you automatically say Im getting robbed, etc etc etc and dont know ANYTHING about my financial profile. As I've said before, Im not saying theyre bad, they just arent for everyone. Including me for the reasons Ive stated. Which are very valid BTW.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: blackangst1
Too fucking complicated. I'll stick with my DCA and 28% average since 1989 thanks though.
That's complicated for you? Wow, no wonder you are having a hard time understanding ETFs. It's a no brainer to me and everyone else I have explained it to.

28% return with 90% of your money in mutual funds? Sounds like B.S. to me. If you were making 28% return since 1989, you would probably be a millionaire by now, and probably wouldn't be on Anandtech forums. Also, that would also place you solidly in the highest echelon of investors. Not saying outright that it isn't true, but like all great claims I won't believe it until you show me the numbers.

The average joe isnt going to do what you've outlined above. Too complicated. Shit...for alot of my clients just the basics of what a mutual fund IS was complicated.
Why not? It is extremely simple.

Not necessarily.
O RLY? Let's see here, so you don't think that an ETF that has a bid ask spread of .33% and an expense ratio of .09% will be cheaper than a mutual fund that has a 0% bid ask spread and a .5% expense ratio? If that's the case then you have no concept of compounding interest.

Not necessarily. Also, WHEN they're taxed is a factor also. I would rather reinvest and let it compound for another 25 years than tax it now.
If you read the article I linked to you would understand that is precisely why you should own ETFs rather than mutual funds. ETFs, since they are not actively managed have much lower turnover rates than a lot of actively managed mutual funds. Higher turnover rate means more sales of the underlying stocks which means more taxes. Read my lips: dividends are taxed whether they are reinvested or not. Dividends are moot, the problem with mutual funds is the turnover rate.

ETF's cannot trade on futures which is a great market. Mutual funds can.
Futures are terrible for long term investors if they are used alone. They can work in your favor if you need to hedge against major dips in the market though, similar to the now defunct strategy of 'shorting against the box.'

do you understand lot pricing? If I want to invest $200, I couldnt do so unless buy price was exactly divisible by $200. thats what I mean by lot pricing. It's a big deal, and goes back to the PITA factor.
Well, you are wrong again. Whether or not you can buy 'odd' lots has nothing to do with ETFs themselves and have everything to do with your broker. In my sharebuilder account I have fractions of shares of ETFs sitting in my account right now. I used sharebuilder's automatic investment tool that allows you to invest any amount you want.

No, youre a fanboi because instead of a reasonable argument like mine (they arent for everyone) you automatically say Im getting robbed, etc etc etc and dont know ANYTHING about my financial profile. As I've said before, Im not saying theyre bad, they just arent for everyone. Including me for the reasons Ive stated. Which are very valid BTW.
For anyone who wants to engage in passive securities investing for long term growth, they really are for everyone. Your reasons are not reasons, they are falsehoods based on a lack of knowledge, also known as ignorance.
 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
We can agree to disagree, thats fine. Youre an ETF fan, Im not. Neither one of us are wrong.

As far as my investments go, somewhere last month I posted all my holdings. You can search if you want to.
 

richardycc

Diamond Member
Apr 29, 2001
5,720
1
81
I thought we are in a recession, but the malls are still very busy, had a hard time finding a parking spot this morning...
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: blackangst1
We can agree to disagree, thats fine. Youre an ETF fan, Im not. Neither one of us are wrong.
Wrong, ETFs are superior in almost every way. Mutual funds were the best back in 1989, but ETFs are the new kids on the block, and they are absolutely demolishing actively managed mutual funds in post tax & fee returns.
 
Oct 30, 2004
11,450
20
81
Originally posted by: richardycc
I thought we are in a recession, but the malls are still very busy, had a hard time finding a parking spot this morning...
Maybe folks are reckoning that they'd better spend their dollars before they no longer have any value.
 

Mxylplyx

Diamond Member
Mar 21, 2007
4,197
100
106
Originally posted by: Legend
Originally posted by: BrownTown
Originally posted by: da loser
Originally posted by: venkman
Everyone should make sure that a decent amount of their investments are diversified in foreign assets/money at this point.
lol, if you think america wouldn't bring down the world you're clueless.
Yeah, these days a large depression is a global occurance, if the USA suddenly can't buy as much stuff then who are all those other countries going to sell their products to? Its in the best interest of other coutries (like say China) to keep USA customers spending as much money as possible. The US economy going down the crapper is NOT in the best interest of the vast majority of countires and leaders in this world (maybe Iran and the like would rejoice, but China wouild have to find someone else to push all their worthless crap on).
The rest of the world was in rubble 60 years ago, and we had virtually limitless resources. Now their economies are about to overtake us. They'll do just fine without us.

IMF list of countries by GDP. (in billions)

1. United States - 13,194,700
2. Japan - 4,366,459
3. Germany - 2,915,867

Your an idiot.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
I think there is a big problem when the Fed Rushes in to save companies on the stock market. I think they should be selective. One of my reasonings is that corporations are not 100% USA entities. Often when you look at a company like say Dell where somewhere around 50% of the employees are oversesa, if they get a bunch of free help from the feds, then we are propping up overseas employees. Even in the Automobile industry made in America has become the biggest farce there ever was often a lot of parts for cars are produced in Canada and Mexico and we are lucky that the automobile is assembled in America. We should have some standards for who we allow to use the Made in America Sticker.

Also how can we claim to be in a Free Market society if the Feds are bailing out companies. How is that different from other companies like Samsung or the Korean Computer Memory industry received help from their government? Then the EU claimed they were not a free market economy product and fined them.

Part of the problem is that the USA has become the police force for the World. Other country's economies are propped up by our military. As long as the USA over-extends its military those countries in Europe, Asia and other places are getting a free ride on our protection racket. Normally when the Mob protects your turf you are forced to get protection money, but what do we get from these foreign countries? Nothing. How is that free trade?
 

StageLeft

No Lifer
Sep 29, 2000
70,214
2
0
Originally posted by: blackangst1
Originally posted by: venkman
Everyone should make sure that a decent amount of their investments are diversified in foreign assets/money at this point.
I have a chunk in Latin America as well as the middle east (Dubai mostly) but last 6 weeks or so I have snatched up quite a few shares of dow jones stock...15-20% discount on fortune 500 companies is to good to pass up. Once again this bullshit of sell sell sell comes from the economic minds of children. You buy when the market is DOWN not up.
Unless it's "down" for a good reason and the previous up was a facade. Maybe it will go down further in which case you just bought when it was up.

Down is meaningless. You don't buy when a stock market is down. You buy before it goes up. Down has no relevance to anything. There is nothing that says "it's down now". It's only down in relation to what it was. If the stock market jumps 2000 points today and I buy a bunch, have I bought when it's up or down? Only in hindsight can I know. If it jumps another 2000 tomorrow, I bought before it went up, so I did well regardless of it what did in the past. The stock market isn't sentient and has no concept of "what it should be" vs what it is right now.

 

blackangst1

Lifer
Feb 23, 2005
20,535
733
126
Originally posted by: Skoorb
Originally posted by: blackangst1
Originally posted by: venkman
Everyone should make sure that a decent amount of their investments are diversified in foreign assets/money at this point.
I have a chunk in Latin America as well as the middle east (Dubai mostly) but last 6 weeks or so I have snatched up quite a few shares of dow jones stock...15-20% discount on fortune 500 companies is to good to pass up. Once again this bullshit of sell sell sell comes from the economic minds of children. You buy when the market is DOWN not up.
Unless it's "down" for a good reason and the previous up was a facade. Maybe it will go down further in which case you just bought when it was up.

Down is meaningless. You don't buy when a stock market is down. You buy before it goes up. Down has no relevance to anything. There is nothing that says "it's down now". It's only down in relation to what it was. If the stock market jumps 2000 points today and I buy a bunch, have I bought when it's up or down? Only in hindsight can I know. If it jumps another 2000 tomorrow, I bought before it went up, so I did well regardless of it what did in the past. The stock market isn't sentient and has no concept of "what it should be" vs what it is right now.
In theory yes. Any time you can buy a stock that rarely fluctuates more than 10% in any given year for 20% off, that is a good deal. Which is what I did.

Your argument is meaningless because, as you said, know one can possibly know when it has reached the bottom. So, the most conservative and smart thing to do, is buy when it is significantly down *for that particular stock*. For example, a 15% drop for something like P&G or Corning, would be significant. But for a smaller NASDAQ company, it wouldnt.

But Im sure you already know this.
 

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