Is it a big mistake not to invest in the stock market right now?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes it’s a waste not to be in market.

This. It's been so hard not to make make money in 2020. I bought about 25 different stocks and all of them went up 50% or more. Many doubled, tripled- Novavax (10times), Nio (bought at $7), Tesla ($100), Zoom ($170 and I thought it was too high), even Apple (40%) and Amazon (60%) did ok.[b] I just bought another stock based on a "tip I heard on a bus" and even that went up 40% in a month.
Everybody talks about crashes and how we need to diversify and stay away from individual stocks and how market only makes 10% a year if you are lucky. Might be true, but lets also talk about stock stocks doubling, tripling. There are so many more people in the market and buying and selling costs almost nothing. Put a stop loss on it if too scared.

Isn't this classic bubble territory, where everyone starts hyping stock picks that are all rapidly increasing?

[Anonymous]

I would not sit with $300k in cash.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes it’s a waste not to be in market.

This. It's been so hard not to make make money in 2020. I bought about 25 different stocks and all of them went up 50% or more. Many doubled, tripled- Novavax (10times), Nio (bought at $7), Tesla ($100), Zoom ($170 and I thought it was too high), even Apple (40%) and Amazon (60%) did ok.[b] I just bought another stock based on a "tip I heard on a bus" and even that went up 40% in a month.
Everybody talks about crashes and how we need to diversify and stay away from individual stocks and how market only makes 10% a year if you are lucky. Might be true, but lets also talk about stock stocks doubling, tripling. There are so many more people in the market and buying and selling costs almost nothing. Put a stop loss on it if too scared.

Isn't this classic bubble territory, where everyone starts hyping stock picks that are all rapidly increasing?

They haven’t all rapidly increased over Jan 2020. We had a deep V shaped recovery.

[Anonymous]

My mom in 1995 got 200k pay out and we ended up buying 10k bonds maturing over next 20 years. She was afraid to do stock market all at once as newly retired. Plan was for her to take all interest payments to live off and roll bond maturities into a diversified stock fund.

She died 2005 and her stock broker actually said had highest return over the decade of his clients. Little Luck Locked in bonds when rates were high. And when market crash in 2000 to 2002 she was dollar cost averaging back in.

But BIG difference she could buy 9 percent 10 year IBM and GE bonds back then. Today those bonds pay 3 percent tops!

[Anonymous]

Anonymous wrote:If you are investing for long term (5+ years), go for it. If you need cash in the near term (next 2-3 years), save it in bonds.

Won’t bond prices go down if interest rates go up? And aren’t interest rates sure to go up?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you are investing for long term (5+ years), go for it. If you need cash in the near term (next 2-3 years), save it in bonds.

Won’t bond prices go down if interest rates go up? And aren’t interest rates sure to go up?

Depends

Floaters, kickers, TIPS, VRDO, step up bonds all do fine.

Long term investment grade non callable bonds get hurt badly in rising rates.

Here is an example of a kicker muni.

Maryland muni bond maturing in 2032. Has a 5 percent coupon but is callable at par as callable Feb 1, 2022. It is not trading at a big premium as if rates stay low will be called Feb 1, 2023. If rates shoot in a lot this year bond might not get called and they get a “kick” in yield. Bond now paying 5 percent.

If you bought a non callable 10 year 5 percent coupon bond today you pay a big mark up on bond and bond would fall in value a lot when rates rise

[Anonymous]

I love all the market cheerleading. Who the F knows.

It sure looks like market is over valued, but I assume they are counting on a roaring 20s scenario after pandemic.

https://www.multpl.com/s-p-500-pe-ratio

Depends on what you need money for; we keep a little higher cash than just 6 month expenses (which is still by $100k) bc my spouse hates their job and wants the option to quit anyway.

Of course, if we invested well enough , we would have FU money and could quit earlier forever; all depends on your risk tolerance. But we want optionality now not after another potential bull run.

[Anonymous]

the market is being propped up by fed policies and new investors FOMO, average in over the next couple of years instead of going all in right away.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you are investing for long term (5+ years), go for it. If you need cash in the near term (next 2-3 years), save it in bonds.

Won’t bond prices go down if interest rates go up? And aren’t interest rates sure to go up?

If the interest rates go up, the world is screwed led by the US.. US will have to borrow at progressively higher rates to service their loans leading to eventual default and the collapse of the current monetary system across the world. To prevent this, they will do everything in their power to keep interest rates low, keep the $ the reserve currency. If that doesn't work, start a war so money keeps flooding into US bonds driving rates down..

Short answer: Rates will not be going up for a LONG time. Many very smart people bet that rates will go up after the last QE cycle and we are still waiting.

[Anonymous]

Anonymous wrote:the market is being propped up by fed policies and new investors FOMO, average in over the next couple of years instead of going all in right away.

Robinhood FOMO Is likely huge driver

[Anonymous]

It’s all great to think about roaring 20s but once there is no almost universal unemployment payments, fewer opportunities for WFH and therefore cutting costs, there will be many people in dire straits.

[Anonymous]

Invest on a pullback like today. Walmart, Dow, inc, Plug Power, Gbtc, I've bought today

[Anonymous]

Anonymous wrote:Invest on a pullback like today. Walmart, Dow, inc, Plug Power, Gbtc, I've bought today

Also IEMG

[Anonymous]

NOOB here, please bear with me.

As the stock price increases, is there some point where we sell it to realize the gains? If so, what would that point be? Or do you hold it for life?

[Anonymous]

Anonymous wrote:NOOB here, please bear with me.

As the stock price increases, is there some point where we sell it to realize the gains? If so, what would that point be? Or do you hold it for life?

Hold it for a year to avoid paying 40% capital gains taxes. If you sell after a year and one day, you owe only 20% of the gains.

I let things like Apple and Microsoft ride, the ones that you think have staying power.