Today is my off day! Let's take a look at a few stocks we can lose money with!
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Originally Posted by DonQuigleone
Rather then buying all these exotic mutual funds and whatnot, why not just buy stock in a relatively stable company, say, Coka Cola. Even if Coke's stock price takes a day to day tumble, it's not going to change the fact that at it's core Coke is a pretty profitable business, Coke isn't going to go out of business tomorrow.
There's a whole host of companies that are similiarly stable, you just have to make sure you're buying them at the right price. With market being what it is, I bet you could get stocks in those kind of companies for a steal.
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Who said anything about Coke being at the right price?
Take a look at the 10-year....Coke has almost doubled it's share price and it would be dumb to buy now. Even
Honeywell might make itself a better bet next year if the second dip does really occur.
And NEVER, NEVER, NEVER PUT ALL YOUR EGGS IN ONE BASKET.
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Originally Posted by Vexx
1) Mutual funds are not "exotic", they're very straight forward. For instance, one I use invests in socially responsible companies (ones that don't use slave labor, etc).
2) Investing in single companies.... here's a specific example: we invest in Walgreens, a retail pharmacy. Over the last few years it has dropped in value by half along with the rest of its sector and only started returning this summer before last week's tumbles. $45->$28->$35 ... depending on when you *need* the money, that could be damaging. The stock (like many others) has dropped 30% in seconds without any reason at all (high probability of stock manipulation?) Do you buy? Too late to sell... companies get punished even when they exceed their projections because a Goldman-Sachs analyst wasn't happy enough.
Plus, we have options with the company. Those have to be exercised before a given date. With the wild variation in the stock market, you could take a bath just because the date came at a bad moment - pure gambling. Recently, we've had to let options vaporize because the initiation value was higher than the current value... whee.
Even municipal bonds and utility bonds are unstable (historically a hugely safe bet and also tax exempt).
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Dow Jones SPDR or
HSI sounds like pretty good deals, but I am holding my breath at the moment because it might dip again. I don't have access to candlestick charts (1y or 6m) so I can't really do a full analysis, but judging from the shape I'd say we better wait until the first week of October.
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Savings accounts ~0.99% at best ($10000 or more)
CDs ... well if you're okay with the money locked up for 5 yrs ~2.2%
What I'm getting at is that unless you operate in values of a million $$ or better - you're probably getting raped every time you twitch.
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Philosophy : Don't react. Look through the "deal first", it is your money. If you miss it, then let it go, there may be another deal somewhere else.
Mark Hulbert has this case-in-point :
Commentary: Blaming Greece fails simple reality check
Except for their citizens of course (because their government is sitting on a pile of BS and dishing them out). For the rest of us : don't like it, don't buy it.
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Originally Posted by Decagon
I think the criticism can be made that people who don't believe themselves savvy with investments tended to leave things to people they trusted to do things well, that or they tend not to disturb what they have out of the belief that a long term investment is sound. As it relates to people in or close to retirement, some people who have enough invested in dividend providing stocks can rely on dividends, while others may have planned to gradually sell off investments, or have a financial product that behaves similarly, are stuck having to sell their assets at these prices to pay for normal expenses and may need to earn more money to replenish their nest egg.
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This. For our older generation who have less time to live and learn the stuff from scratch, I'd say that is excusable.
But for the rest of us at my age, I say it is stupid if we don't learn how to manage our funds ourselves.