Xring01
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There have been several different threads regarding various topics on this. I hope this thread takes off, and gets come creative dialog going. Disclaimer: This is not my profession, just a guy trying to share some advice on what I do in my personal accounts. I do not make anything by sharing the below. For those that have the necessary $$$ to retire in comfort, then you dont need any of my advice. Move on to the next thread.
I have a major problem with "Financial Advisers"...
Why you may ask... Because there is absolutely no accountability in that profession. They make money regardless if your account goes or down. Either make $$$ on the balance, or make $$$ on the transactions they do for you. When they screw you over, there is nothing you can do about it, except transfer you $$ to the next guy who will do the same thing to you.
If they were truly good at what they do, then the could charge and hourly fee, just like a lawyer does. Seriously consider why you cant hire a Financial Adviser on an hourly basis. Because its a rigged system, to prevent the Markets from a total collapse in bad times. If everyone pulled the $$$ out at the same time, the markets would fail. So Financial advisers are in place to prevent that from happening, but alot of hard working people get screwed in that process.
The moment that I figured out the above, then I started reading alot of books, and taught my self how to plan for my own retirement.
Some of the Myths that are being spread:
You have to be diversified. I agree with this to a small point. The problem with Mainstream retirement advise, is spread your $$$ in to alot of different Mutual Funds. Thats stupid. The average Mutual fund cant beat the S&P 500. Fund managers have the regulations stacked against them. Thats a long story, which can be covered later.
Being over diversified, is a bigger problem than not being diversified. Because if you spread your $$$ around to many places, then you are hoping the market just goes up overall. If thats the goal, then just put the $$$ into a S&P 500 ETF, pay alot less fees than a mutual fund, and make alot more money.
Dollar Cost Average over 30-40years: Fuck that strategy, I only have $$$ Exposed to stocks when I feel we are in a Bull Market. The moment I feel the Bull, swinging to Bear, I sell everything and sit on the sidelines, waiting for another bull market to return. Hopefully I buy back in alot lower than I sold at. I will never follow the market down again, like I have done in the past. The argument against my thoughts above: No One Can Time The Market.. They are right, I do not have perfect timing, but I will not watch 50% of my $$$ disappear in a bear market.
My advice for people that want to grow there retirement account. Meaning you are willing to take some risk. Before you follow my below advice, you need to read up on the stocks you own at least a few times a week, if not daily. Go to yahoo finance, look up that stock symbol and read articles below it.
Buy individual stocks, in sectors that you feel have the strongest argument for going up. Then buy the best of breed in that sector. Never buy all in at one purchase. Buy into that position in 4-5 purchases, over time, dollar cost averaging your way in. Once you have a full position on that stock, set a trailing stop loss order on that stock, and continually move that stop loss order up, as the stock goes up in value. Which locks in your gains, and prevents major loss's.
For Example:
Amazon: Retail Sector, who does better than Amazon in retail. Lets say you want to put $10k into Amazon. Buy 4 Blocks of $2500, over a 3-6 month window. Then set a trailing stop loss on that order at what ever you are willing to lose. Say 10% lower, as AMZN goes up, move the trailing stop loss up... Say your 4 Buys into AMZN gave you $10K at average of $1000/share. Set your Stop Loss at $900. As AMZN goes past $1100, move the stop loss to $1000... As it goes to $1200, move the stop loss to $1100 ish... Until you own AMZN at $1575, with a stop loss at $1350... Meaning you have 35% ROI.
Entertainment: NFLX
Medical: ISRG
Oil & Gas: Not a sector I believe, I will not own anything in Oil/Gas.. Not going to happen.
Defense Stocks: there are several that I am watching.
SECTOR - Best in Class Stock in that Sector is what we focus on.
American and Global Politics, should give you a pretty good hint of what sectors have the best chance of going up, and what sectors have the best chance of going down.
Overall Portfolio should be less than 10 stocks, most likely less, unless you can find 10 sectors you truly believe have a good chance of going up. Set your stop loss orders and honor them. Sometimes they help, sometimes they hurt. BUT WE ALWAYS PROTECT THE PROFITS WE HAVE EARNED.
Yes, I understand most 401K plans do not allow for the purchase of individual stocks. Nothing is preventing you from transferring (say once/year) $$$ from a 401K to an Individual IRA plan that allows you to invest into individual stocks. This creates a Win/Win, because you still get your Company match on your 401K, (Which is 100% ROI for the most part), then you shift those funds into something that has alot better chance of appreciating in the long term.
Looking forward to your thoughts on this.
Final Disclaimer: Dont beat me up to bad, I am not selling anything here... This is just my strategy and what I have developed in the last 10-15 years. Yes, I have lost alot $$$ learning the above.
I have a major problem with "Financial Advisers"...
Why you may ask... Because there is absolutely no accountability in that profession. They make money regardless if your account goes or down. Either make $$$ on the balance, or make $$$ on the transactions they do for you. When they screw you over, there is nothing you can do about it, except transfer you $$ to the next guy who will do the same thing to you.
If they were truly good at what they do, then the could charge and hourly fee, just like a lawyer does. Seriously consider why you cant hire a Financial Adviser on an hourly basis. Because its a rigged system, to prevent the Markets from a total collapse in bad times. If everyone pulled the $$$ out at the same time, the markets would fail. So Financial advisers are in place to prevent that from happening, but alot of hard working people get screwed in that process.
The moment that I figured out the above, then I started reading alot of books, and taught my self how to plan for my own retirement.
Some of the Myths that are being spread:
You have to be diversified. I agree with this to a small point. The problem with Mainstream retirement advise, is spread your $$$ in to alot of different Mutual Funds. Thats stupid. The average Mutual fund cant beat the S&P 500. Fund managers have the regulations stacked against them. Thats a long story, which can be covered later.
Being over diversified, is a bigger problem than not being diversified. Because if you spread your $$$ around to many places, then you are hoping the market just goes up overall. If thats the goal, then just put the $$$ into a S&P 500 ETF, pay alot less fees than a mutual fund, and make alot more money.
Dollar Cost Average over 30-40years: Fuck that strategy, I only have $$$ Exposed to stocks when I feel we are in a Bull Market. The moment I feel the Bull, swinging to Bear, I sell everything and sit on the sidelines, waiting for another bull market to return. Hopefully I buy back in alot lower than I sold at. I will never follow the market down again, like I have done in the past. The argument against my thoughts above: No One Can Time The Market.. They are right, I do not have perfect timing, but I will not watch 50% of my $$$ disappear in a bear market.
My advice for people that want to grow there retirement account. Meaning you are willing to take some risk. Before you follow my below advice, you need to read up on the stocks you own at least a few times a week, if not daily. Go to yahoo finance, look up that stock symbol and read articles below it.
Buy individual stocks, in sectors that you feel have the strongest argument for going up. Then buy the best of breed in that sector. Never buy all in at one purchase. Buy into that position in 4-5 purchases, over time, dollar cost averaging your way in. Once you have a full position on that stock, set a trailing stop loss order on that stock, and continually move that stop loss order up, as the stock goes up in value. Which locks in your gains, and prevents major loss's.
For Example:
Amazon: Retail Sector, who does better than Amazon in retail. Lets say you want to put $10k into Amazon. Buy 4 Blocks of $2500, over a 3-6 month window. Then set a trailing stop loss on that order at what ever you are willing to lose. Say 10% lower, as AMZN goes up, move the trailing stop loss up... Say your 4 Buys into AMZN gave you $10K at average of $1000/share. Set your Stop Loss at $900. As AMZN goes past $1100, move the stop loss to $1000... As it goes to $1200, move the stop loss to $1100 ish... Until you own AMZN at $1575, with a stop loss at $1350... Meaning you have 35% ROI.
Entertainment: NFLX
Medical: ISRG
Oil & Gas: Not a sector I believe, I will not own anything in Oil/Gas.. Not going to happen.
Defense Stocks: there are several that I am watching.
SECTOR - Best in Class Stock in that Sector is what we focus on.
American and Global Politics, should give you a pretty good hint of what sectors have the best chance of going up, and what sectors have the best chance of going down.
Overall Portfolio should be less than 10 stocks, most likely less, unless you can find 10 sectors you truly believe have a good chance of going up. Set your stop loss orders and honor them. Sometimes they help, sometimes they hurt. BUT WE ALWAYS PROTECT THE PROFITS WE HAVE EARNED.
Yes, I understand most 401K plans do not allow for the purchase of individual stocks. Nothing is preventing you from transferring (say once/year) $$$ from a 401K to an Individual IRA plan that allows you to invest into individual stocks. This creates a Win/Win, because you still get your Company match on your 401K, (Which is 100% ROI for the most part), then you shift those funds into something that has alot better chance of appreciating in the long term.
Looking forward to your thoughts on this.
Final Disclaimer: Dont beat me up to bad, I am not selling anything here... This is just my strategy and what I have developed in the last 10-15 years. Yes, I have lost alot $$$ learning the above.