OT: Stock Market

[intlzncster]

Today's investing technology enables anyone to profit in a down market. Forever's investing human psychology generally stops most from moving to short positions. Investing is primarily an optimistic sport. That said, the pure quant types basically have not out performed a long term dollar cost averaging into the S&P strategy. Quants remove emotion and emotion is a powerful force in markets.

Problem is quants haven't figured out how to reliably beat the market year in year out.

Wallstreet's biggest problem is two fold. 1) for the most part, they have to be in the market in some form or fashion all the time. One of the biggest advantages a private investor has is to be able to be out of a market for stretches. Then profit on bigger up/down swings. 2) they are largerly quarterly driven, and their investing strategy/timeline reflects that. This forces them in and out of positions at less than favorable (higher) rate Private investors can look longer term, and do not have to churn their accounts.

 

[QDOG5]

@Kemba'sYogurt, I agree with most in this thread that I would strongly urge you not to day trade. It will detract from your other job and might effect relationships in ways you wouldn't have thought of beforehand. Having active positions in the market can become all consuming. If you're bound and determined to give it a try I would make a few recommendations. If you want to try trading I would look to expand your time horizon. The trades you enter should have a longer time horizon than a day. Also, do you intend to trade fundamentally or technically? That needs to be figured out because seat of the pants trading is doomed to failure. Will you have fixed price points for entering and exiting trades? Those are a few of the many questions before you begin. Possibly, you should paper trade before you start actual trading(you have honest with yourself on the results). When you do start trading you need to keep your commission fees as low as possible. You need to research that area completely, too. (Take a look at Interactive Brokers for one) Finally, as a futures trader with 25+ years of experience I can't tell you that there is a surefire way make money but I can guarantee how you would lose money. The phrase is called adding to a loser. If you bought XYZ at $10 to sell it at $13 and it goes to $8 DON'T buy more. This strategy make work on occasion but I've seen many a good trader go belly up because they got stubborn with adding to a position. Many of your best trades will be trades that cover a losing position.

 

[Uconnfanatic]

If you are that sure on the timing you should own the world by the time that all shakes out

As I said, it is my expectation. I will adjust if I see the need to. Been calling markets and economic cycles professionally for a long time. Understanding the bigger picture is far more important than preciseness. Much more focused on preserving capital than "owning the world".

 

[intlzncster]

@Kemba'sYogurt, I agree with most in this thread that I would strongly urge you not to day trade. It will detract from your other job and might effect relationships in ways you wouldn't have thought of beforehand. Having active positions in the market can become all consuming. If you're bound and determined to give it a try I would make a few recommendations. If you want to try trading I would look to expand your time horizon. The trades you enter should have a longer time horizon than a day.

Actual day trading is a mugs game. If you want to actively 'trade', having a medium term time frame is probably your best bet. The daily vagaries of the market--especially with today's bots moving so fast in different directions and responding to seemingly random stimuli--will eat you alive.

Also, do you intend to trade fundamentally or technically? That needs to be figured out because seat of the pants trading is doomed to failure. Will you have fixed price points for entering and exiting trades? Those are a few of the many questions before you begin. Possibly, you should paper trade before you start actual trading(you have honest with yourself on the results).

This is a valuable piece of advice and very true. Whatever you do, you have to have some sort of defined system, and and stick to it. You're system will define your approach and should determine when to cut your losses, not your emotions/gut.

When you do start trading you need to keep your commission fees as low as possible. You need to research that area completely, too. (Take a look at Interactive Brokers for one)

I'll second IB. It's who I use. Most big brokers are the same, just different platforms and commissions. IB's are very low, and their interface and number of markets are good.

Finally, as a futures trader with 25+ years of experience I can't tell you that there is a surefire way make money but I can guarantee how you would lose money. The phrase is called adding to a loser. If you bought XYZ at $10 to sell it at $13 and it goes to $8 DON'T buy more. This strategy make work on occasion but I've seen many a good trader go belly up because they got stubborn with adding to a position. Many of your best trades will be trades that cover a losing position.

In other words, don't fall in love with your position and throw good money after bad.

Maxim one of trading: don't lose money.

 

[the Q]

And if we are being honest, nobody will, as it's not politically expedient. Not beforehand anyway*. Sad but true.

*the only thing being done from this perspective, is the Fed trying to raise rates minimally at best, without hurting momentum, in anticipation of having to lower them during the next downturn.

the thing to do is to hoard some money and go on a buying spree when things go down.

 

[huskyinfl]

"The market fixes itself"
I would also try to make friends with someone that had access to a Bloomberg terminal.
The data and computing power make the day trading of 10-20 years a joke.

Seriously go check out Wall Street bets on Reddit and see how foolish and fast people lose money.

 

[Dream Jobbed 2.0]

I’m too much of a whimp to put money into stocks.

I’m 30, just married with a decent income and pension. I’m pretty clueless about saving and investing. Met with a financial planner for the first time expecting to be kinda put down for not having as much as I feel like I should have put away. I was pretty shocked when he told me a lot of people my age don’t even have savings accounts, or if they do they pull from it for day to day stuff. I have no real credit card debt aside from rotating balances and I’m on schedule with my student loans. He said those few things alone but me way ahead of most people my age. Kinda scary.

He opened an IRA tied to mutual funds and set up a direct withdrawal of $250 a month that I would be putting into a savings and have just sitting there. Hopefully the growth is awesome.

 

[the Q]

I’m too much of a whimp to put money into stocks.

I’m 30, just married with a decent income and pension. I’m pretty clueless about saving and investing. Met with a financial planner for the first time expecting to be kinda put down for not having as much as I feel like I should have put away. I was pretty shocked when he told me a lot of people my age don’t even have savings accounts, or if they do they pull from it for day to day stuff. I have no real credit card debt aside from rotating balances and I’m on schedule with my student loans. He said those few things alone but me way ahead of most people my age. Kinda scary.

He opened an IRA tied to mutual funds and set up a direct withdrawal of $250 a month that I would be putting into a savings and have just sitting there. Hopefully the growth is awesome.

It is scary that he’s not wrong.

66% of Millennials have nothing saved for retirement

 

[DaveHuskiesFan]

It is scary that he’s not wrong.

66% of Millennials have nothing saved for retirement

Right, I’ve put about 17% + an 8% match into my 401k every paycheck for the last 6 years. I saw something the other day that my networth puts me in the 98th percentile for my age which is pretty absurd considering I don’t make a ton and feel like I could be doing even better than I am.

 

[the Q]

Right, I’ve put about 17% + an 8% match into my 401k every paycheck for the last 6 years. I saw something the other day that my network puts me in the 98th percentile for my age which is pretty absurd considering I don’t make a ton and feel like I could be doing even better than I am.

I get it man. I started behind the eight ball chasing my baseball related dreams. So I always feel behind. With a 13% contribution to 401k Plus a private Roth IRA at over 10% for the last 5 years. But I’m already in my early 30s cause of what I said before.

It could be ugly when the people in our and DJ2.0’s general age range hit retirement age.

 

[intlzncster]

I get it man. I started behind the eight ball chasing my baseball related dreams. So I always feel behind. With a 13% contribution to 401k Plus a private Roth IRA at over 10% for the last 5 years. But I’m already in my early 30s cause of what I said before.

It could be ugly when the people in our and DJ2.0’s general age range hit retirement age.

We are all gonna be retiring at 75+ anyway.

 

[the Q]

We are all gonna be retiring at 75+ anyway.

Facts.

 

[superjohn]

I get it man. I started behind the eight ball chasing my baseball related dreams. So I always feel behind. With a 13% contribution to 401k Plus a private Roth IRA at over 10% for the last 5 years. But I’m already in my early 30s cause of what I said before.

It could be ugly when the people in our and DJ2.0’s general age range hit retirement age.

You play minor league ball? I saw a Bryant Gumbel Real Sports segment on how minor league baseball players get paid nothing. The guy selling peanuts in the crowd made a lot more, it's insane how little they get paid.

 

[Huskygamble19]

It’s hard to see a market crash with a strong economy, but more importantly, sentiment hugely biased towards an impending crash. Crashes happen on excesses & especially optimism.

I am in the business and have tried day trading and still trade a lot in my personal accounts, but it is still easy to be humbled by the market. Be prepared to learn some expensive lessons early on. What has helped me is I keep a core bunch of positions and then trade other positions with less than half my working capital.

Whatever u do, steer clear of penny stocks and pump and dump schemes, that was an expensive lesson i learned when i stepped away from my computer for a vacation about a decade ago.

Good luck!

Penny stocks are strictly bought on hype. Once it dies down the stock dies with it. Follow the hype and watch the stock rise a bit and then sell it because it won't get much higher.

 

[the Q]

You play minor league ball? I saw a Bryant Gumbel Real Sports segment on how minor league baseball players get paid nothing. The guy selling peanuts in the crowd made a lot more, it's insane how little they get paid.

No. My startup Baseball agency. It’s brutal to startup. We borrowed a lot of money just to be able to go see players and sign them.

No savings during that entire time period.

But yes they make peanuts. It’s amazing what those guys all go through to make the big leagues.

 

[Scrutineer]

@Kemba'sYogurt, I agree with most in this thread that I would strongly urge you not to day trade. It will detract from your other job and might effect relationships in ways you wouldn't have thought of beforehand. Having active positions in the market can become all consuming. If you're bound and determined to give it a try I would make a few recommendations. If you want to try trading I would look to expand your time horizon. The trades you enter should have a longer time horizon than a day. Also, do you intend to trade fundamentally or technically? That needs to be figured out because seat of the pants trading is doomed to failure. Will you have fixed price points for entering and exiting trades? Those are a few of the many questions before you begin. Possibly, you should paper trade before you start actual trading(you have honest with yourself on the results). When you do start trading you need to keep your commission fees as low as possible. You need to research that area completely, too. (Take a look at Interactive Brokers for one) Finally, as a futures trader with 25+ years of experience I can't tell you that there is a surefire way make money but I can guarantee how you would lose money. The phrase is called adding to a loser. If you bought XYZ at $10 to sell it at $13 and it goes to $8 DON'T buy more. This strategy make work on occasion but I've seen many a good trader go belly up because they got stubborn with adding to a position. Many of your best trades will be trades that cover a losing position.

Great comment about adding to losers. A lawyer friend was getting advice from a neighbor whose son-in-law was a hedge fund manager in NY during the tech boom of the late 90's. The neighbor got tips from his son-in-law and would take positions at say $5, they would quickly go to $10 or $15 and then he'd tell my friend how great the stock is. My friend would buy it and it would go to $20 and then drop to $15 and he'd buy more and then it would go to $10 and he'd buy more. This happened multiple times over a couple years when the tech stocks were going wild without earnings or other evidence of value and he ended up losing much of his then $500,000 401K account.

 

[Hoophound]

Great comment about adding to losers. A lawyer friend was getting advice from a neighbor whose son-in-law was a hedge fund manager in NY during the tech boom of the late 90's. The neighbor got tips from his son-in-law and would take positions at say $5, they would quickly go to $10 or $15 and then he'd tell my friend how great the stock is. My friend would buy it and it would go to $20 and then drop to $15 and he'd buy more and then it would go to $10 and he'd buy more. This happened multiple times over a couple years when the tech stocks were going wild without earnings or other evidence of value and he ended up losing much of his then $500,000 401K account.

All I got out of that entire post was that you know a lawyer that actually listens to other people. I’ve never met one.

 

[Drame]

Anyone familiar with trading? Interested in starting day trading as a second source of income. If anyone does this or is familiar with it please PM me. Trying to learn the ropes. Opened an E-Trade account and funded it a little, but haven't made any trades yet.

Thanks.

Dont day trade now. Keep funding your account and listen to Marc Cuban about the market right now. In 1-2 years there will be a recession and everything will be on sale. The market will be super volatile until then, esp with Trump in office. If you want to buy something now, buy apple. They're maxing on iphones but AR and self driving are coming.

 

[jibsey]

Dont day trade now. Keep funding your account and listen to Marc Cuban about the market right now. In 1-2 years there will be a recession and everything will be on sale. The market will be super volatile until then, esp with Trump in office. If you want to buy something now, buy apple. They're maxing on iphones but AR and self driving are coming.

I agree with this and it’s really tough to do because the market edges up and you feel like you’re losing out if you are not in. . I’d rather buy when it’s 20-30% less.

 

[Caronimo]

TD Ameritrade is really good. I was a Scottrade customer and they got bought by TD and I am glad they did. Apple has been a good stock. Usually the advice is go with something "safe" with a dividend as your first trade and be patient or you could get pummeled.

 

[intlzncster]

Dont day trade now. Keep funding your account and listen to Marc Cuban about the market right now. In 1-2 years there will be a recession and everything will be on sale. The market will be super volatile until then, esp with Trump in office. If you want to buy something now, buy apple. They're maxing on iphones but AR and self driving are coming.

No offense intended, but I wouldn't go with Apple if you are entering now. You're ROI wouldn't be great. It's a terrible risk/reward at this point. You're buying close to a top in the market. In other words, odds of Apple's stock doubling (or whatever) from here over the next few years? Less than 3% I reckon. And importantly, during a downturn, they are going to lose like everyone else. jmo

If you must, must buy a stock now, buy something boring like a utility.

 

[the Q]

TD Ameritrade is really good. I was a Scottrade customer and they got bought by TD and I am glad they did. Apple has been a good stock. Usually the advice is go with something "safe" with a dividend as your first trade and be patient or you could get pummeled.

The nice thing about dividend investing is you can basically build a second income stream and/or pension depending on how you build it.

 

[intlzncster]

All I got out of that entire post was that you know a lawyer that actually listens to other people. I’ve never met one.

↑ definitely spends time on the Pool.

 

[GiladKatzDeli]

Day trading is speculating, don't confuse it with investing. There are few bargains in the market these days and we're long overdue for a correction. Interest rate hikes, trade wars, and overextended multiples. The majority of investors would be better off just buying an index fund and forgetting about it.

 

[Ewekon]

Day trading is speculating, don't confuse it with investing. There are few bargains in the market these days and we're long overdue for a correction. Interest rate hikes, trade wars, and overextended multiples. The majority of investors would be better off just buying an index fund and forgetting about it.

I posted earlier that I like a DRIP strategy for a good part of a portfolio and I would add especially in the current market. I am not a trader by any stretch but have never been shy about short positions. They make money just as well as long and when it is all said and done it is always about being on the correct side of a stock or trend.

In the current market environment I will remind of one absolute truth. No one has ever lost money on an investment they didn't make.

Imo cash isn't bad right now.

 

[DaveHuskiesFan]

I posted earlier that I like a DRIP strategy for a good part of a portfolio and I would add especially in the current market. I am not a trader by any stretch but have never been shy about short positions. They make money just as well as long and when it is all said and done it is always about being on the correct side of a stock or trend.

In the current market environment I will remind of one absolute truth. No one has ever lost money on an investment they didn't make.

Imo cash isn't bad right now.

Sure have. It's inflation. If you're not investing your money it's worth less today than it was yesterday.

 

[Ewekon]

Sure have. It's inflation. If you're not investing your money it's worth less today than it was yesterday.

Point taken and in the long haul you are 100% right.

I was more referencing folks that didn't buy brand X stock that went up and feel like they lost money which is a common feeling

Lost opportunity? Sure. Lost money? No.

Just on the side of people here saying cash accumulation right now can be used opportunistically in the not so far future.

 

[the Q]

Point taken and in the long haul you are 100% right.

I was more referencing folks that didn't buy brand X stock that went up and feel like they lost money which is a common feeling

Lost opportunity? Sure. Lost money? No.

Just on the side of people here saying cash accumulation right now can be used opportunistically in the not so far future.

Indeed. Bank of America stock was at 7 bucks like 10 years ago.

It’s over 30 now. Plenty of opportunities like that will come during the next recession.