After reading, researching, and analyzing stocks, I gave up and dumped $25K in a 1 yr CD @ 2.45%. At least, it beats sitting in a savings acct.
Stock Advice Thread
- Thread starter dgtatu01
- Start date
EVOP 52 Week low is $19 and the 52 Week high is $26.10. It is currently at $24.25.
What did you buy at?
What did you buy at?
It’s 52 week high? Just went public in May I believe.
I’m in around $21, but as my first individual stock purchase with 188 shares its fun to see it consistently up, with a few drops.
Edit: Just checked I’m in at $21.78 to be exact. But it’s taking a dive after market.
I’ll be helping them expand into the KY/IN market soon:grimace:
I’m in around $21, but as my first individual stock purchase with 188 shares its fun to see it consistently up, with a few drops.
Edit: Just checked I’m in at $21.78 to be exact. But it’s taking a dive after market.
I’ll be helping them expand into the KY/IN market soon:grimace:
You could set up a very cheap brokerage account, put your money in Vanguard’s Total Stock Market etf and be much happier with that $25,000 given time.
Couple quick questions:
1. Many economists have been predicting a pending downturn......maybe next yr, etc. How do you all adjust investing during downturns?
2. Do the major dividend payers.....P&G, Coke, etc........do they change their dividend payouts during downturns?
1. Many economists have been predicting a pending downturn......maybe next yr, etc. How do you all adjust investing during downturns?
2. Do the major dividend payers.....P&G, Coke, etc........do they change their dividend payouts during downturns?
I keep getting slapped on the wrist for asking #1. [laughing]
Looking historically at those two stocks, it looks like they held their dividend steady during the middle to late 2000's downturn. Those are consumer staples so they do better than others in downturns. During the same time period, the financials (obviously), were hammered and were cutting dividends, some more than others. I know Bank of America cut theirs to one cent.
This may be stupid but someone along time ago told me this.
If you can see a downturn coming sell everything and get your cash. If you have a 401K borrow against it before losing and pay yourself interest.
Then once things seem to bottom out pay your loan back and repurchase your stocks for less than you owned them before.
Now I don’t know if that’s right or wrong advice, and never been in a position to find out, but it seems to make some sense.
If you can see a downturn coming sell everything and get your cash. If you have a 401K borrow against it before losing and pay yourself interest.
Then once things seem to bottom out pay your loan back and repurchase your stocks for less than you owned them before.
Now I don’t know if that’s right or wrong advice, and never been in a position to find out, but it seems to make some sense.
Lol.
What I was just getting at is this.....
I know you can't predict when and where downturns will occur.
Most of my investment portfolio are funds. I have a handful of stocks that I dabble with, but the majority of the $ is in funds of some sort. So, with every paycheck I automatically put 'x' amount into one of my mutual funds. If we're sitting in a downturn next yr, would I just keep the same habit? Or should I pile up the cash and wait till things settle a bit? Or, instead of automatically putting in in funds.......do I target a stock or three to put the money into....you know, "buy low, sell high."
It doesn't sound like good advice to me. If you are borrow against it and lose your job, then the full amount is due, which is possible in a down economy. I guess as long as you are disciplined enough to not use that money and store it away for an immediate repayment, you'd be fine. The other option, 401k's I've been in have a money market option. So if you just want to stay safe in a downturn, move the money to that option and you'll save the interest and not have to worry about unexpected repayment.
The book I'm reading, tagged it above, had a great quote about "timing". Basically said, when they economy is doing well, when "business is good", everyone is buying in and there isn't much of a surprise. The growth is then "expected" whereas the downturn isn't. Therefore, the gains aren't as much.
I'll grab it tomorrow. It was such a good excerpt that I grabbed a pen to highlight it.
I'll grab it tomorrow. It was such a good excerpt that I grabbed a pen to highlight it.
I know everyone wants to be smarter than the market, but when you are investing for a retirement that is 30 years away, you just put it in and forget it, with the expectation that the market will continue over the long run to do just what it has in the past, which is to provide a return of 10% a year. Don't worry what it does. My Ex, who works at Fidelity, was advised that you want to buy in the downturn when the price is low, again with the expectation that stocks will rebound (same as the old adage, "buy low, sell high").
Having said all that, I actually lost money in my 401K over the last 2 weeks, looks like my 35% investment in an international fund was the culprit. Took most of it just this morning and moved it into a blended fund.
Having said all that, I actually lost money in my 401K over the last 2 weeks, looks like my 35% investment in an international fund was the culprit. Took most of it just this morning and moved it into a blended fund.
Your advice is the best for those with 10 or more years to retirement because you are buying things low during a downturn!
In retirement accounts, stay the course, you’re buying low! It would be good to have investable cash raised outside your retirement accounts to buy some fine, currently high flying, high PE stocks once the market hits bottom. I want to add to my ADBE ALGN NVDA AMZN type stocks for sure after a big correction.
Never borrow against a 401K except dire necessity. Get a second job or something to raise a pot of cash for bottom investing outside of your retirement accounts.
Wonderful, if you can time the market perfectly! Warning-nobody can, consistently.[devil][devil]
I feel like I’ve said that ten times in this thread and others now. :smiley:
lz I’m not saying it’s good advice, but it made sense in that if you borrow against the 401K I assume that money isn’t in the market to lose? And if your paying yourself interest into the acct would it not be better than losing?
Just how I always took it, but again only recently has this even come close to mattering to me.
Just how I always took it, but again only recently has this even come close to mattering to me.
You’re assuming perfect timing, a dangerous risk if you lose opportunity cost on profit you could have been making on that dead, borrowed money. How will you truly know when the market has bottomed and you should then invest? You would be better off getting a second mortgage loan if you need cash badly.
Wasn’t about needing the cash. But for example(exactly as I was told in the investment class) let’s say the market was hovering around 14K like before the 2008 recession......and it dropped to 7500.
Most people lost roughly have of their 401K, and from personal experience the old’s in My family were all shook as they were mid 50s early 60s and facing retirement but just lost anywhere from 30-40% of their life savings.
What he was saying is borrowing half of that would stop you from the loss, and paying yourself the 7% interest keeps money coming in.
Again, I wouldn’t call it sound advice at all especially as I’m in my 30s and would easily bounce back, but his idea was stop the bleeding and don’t spend it and when things look to pick up pay off that loan in full and capitalize.
It made sense. But I’m in my stuff for the long haul and seemingly have crushed at all angles, for now.
I hope my purchase of SENS today pays off, but if not it’s for a cause that hits home so whatever.
Most people lost roughly have of their 401K, and from personal experience the old’s in My family were all shook as they were mid 50s early 60s and facing retirement but just lost anywhere from 30-40% of their life savings.
What he was saying is borrowing half of that would stop you from the loss, and paying yourself the 7% interest keeps money coming in.
Again, I wouldn’t call it sound advice at all especially as I’m in my 30s and would easily bounce back, but his idea was stop the bleeding and don’t spend it and when things look to pick up pay off that loan in full and capitalize.
It made sense. But I’m in my stuff for the long haul and seemingly have crushed at all angles, for now.
I hope my purchase of SENS today pays off, but if not it’s for a cause that hits home so whatever.
I’m retired and probably older than your “olds” were, where they screwed up was having too much retirement at risk late in their working lives. I’m not rich, but had an investing safety net I grudgingly built up outside my retirement account, so I had time to let the 401K come back during that hit, used the safety net for 5+ years along with SS before tapping any 401K money.
One more explanation about problems of borrowing from your 401K:
“The caveat, though, is that paying yourself 5% loan interest doesn’t actually generate a 5% return, because the borrower that receives the loan interest is also the one paying the loan interest. Which means paying 401(k) loan interest to yourself is really nothing more than a way to transfer money into your 401(k) plan. Except unlike a traditional 401(k) contribution, it’s not even tax deductible! And as long as the loan is in place, the borrower loses the ability to actually invest and grow the money… which means borrowing from a 401(k) plan to pay yourself interest really just results in losing out on any growth whatsoever!
The end result is that while borrowing from a 401(k) plan may be an appealing option for those who need to borrow – where the effective borrowing cost is not the 401(k) loan interest rate but the “opportunity cost” or growth rate of the money inside the account – it’s still not an effective means to actually increase your returns, even if the 401(k) loan interest rate is higher than the returns of the investment account. Instead, for those who have “loan interest” to pay to themselves, the best strategy is simply to contribute the extra money to the 401(k) plan directly, where it can both be invested, and receive the 401(k) tax deduction (and potential employer matching!) on the contribution itself!”
“The caveat, though, is that paying yourself 5% loan interest doesn’t actually generate a 5% return, because the borrower that receives the loan interest is also the one paying the loan interest. Which means paying 401(k) loan interest to yourself is really nothing more than a way to transfer money into your 401(k) plan. Except unlike a traditional 401(k) contribution, it’s not even tax deductible! And as long as the loan is in place, the borrower loses the ability to actually invest and grow the money… which means borrowing from a 401(k) plan to pay yourself interest really just results in losing out on any growth whatsoever!
The end result is that while borrowing from a 401(k) plan may be an appealing option for those who need to borrow – where the effective borrowing cost is not the 401(k) loan interest rate but the “opportunity cost” or growth rate of the money inside the account – it’s still not an effective means to actually increase your returns, even if the 401(k) loan interest rate is higher than the returns of the investment account. Instead, for those who have “loan interest” to pay to themselves, the best strategy is simply to contribute the extra money to the 401(k) plan directly, where it can both be invested, and receive the 401(k) tax deduction (and potential employer matching!) on the contribution itself!”
If the intention is to mitigate your market risk because your 401k money is in a certain type of fund, why not just transfer it in a money market fund within the 401k portfolio, as opposed to pulling it out in the form of a loan? If you pull the money out in the form of a loan, what are you going to do with it? The 7% or whatever interest, is being paid by you, so that's really not your money working for you, it's you paying additional money you can use for anything.
Bottom line, in theory, a 401K loan would prevent you from losing money in a down market IF you had perfect knowledge of the highs/lows of the market AND there were absolutely no other funds in which you could invest to provide positive returns for your money. However, you can normally park your money in some kind of fund that is made up of bonds or other stable investments that should give you at least a minimal return. So, unless you have a time machine you DON'T have perfect knowledge, and there are almost always 401K investments that should provide at least some minimal return, so there's about a tenth of a percent chance that a 401K loan would be your best option.
I get it guys, and not arguing it, it was just a point my professor at the time was telling me. And based on what your posting it goes hand in hand with his point of minimizing the loss and not worrying about the interest.
But the main point is you’d have to know exactly when to get cash out and when to get the cash back in.
Moving on, can you really only contribute $17,000 a year to a 401K?
But the main point is you’d have to know exactly when to get cash out and when to get the cash back in.
Moving on, can you really only contribute $17,000 a year to a 401K?
$18,500 max contribution for 2018, if you are over 50, you can add $6k for catch up contributions. There might be some rules around catch up, I'm not 50 yet, so not worried about it.
I don't know why paying interest in an account where you can't declare the loss, is a good idea. Just go into cash and buy at lower levels or flip the money into a new sector or investment vehicle.
Good advice. Never interrupt the compounding formula at work.
Buy-and-hold and dollar cost average if you believe in the issues. Strategy works exceptionally well with Dividend Reinvestment Plans (DRiPs) and mutual funds because dividends reinvest at lower share prices. Proven success for me over more than 25 years. Financial crisis was a rare exception. Even then, except for losing my *** in National City (NCC), everything else rebounded.
Do it if you can and much more importantly, if you love the investment choices. Usually you can get a cheaper fund, ETF or a better stock than your company stock, elsewhere. I'll say it again, don't fear these low commissions.
I only went in for $1000 @ $15/share. I just bought it after hearing my brother talk about why he was going to buy some (he didn’t).
My investment was just mad money that was sitting in savings. It did spur to set up an Ally account and it is fun to check throughout the day. My main retirement accounts are with UBS. This is just a side thing. I am not going to pretend to know **** about picking stocks
My investment was just mad money that was sitting in savings. It did spur to set up an Ally account and it is fun to check throughout the day. My main retirement accounts are with UBS. This is just a side thing. I am not going to pretend to know **** about picking stocks
Might as well have good luck as bad! Semi stocks are very cyclical, you happened to buy the survivor, I have NVDA but thinned it out recently and hope to buy more in a big drop.