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

[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.

[Anonymous]

Anonymous wrote:

Anonymous wrote:2019 was already a good year. Where was this $300k all this time? I had $70k from sale of my, condo which I put into the market March and April 2020. It's $250k right now. There are ETF's that went from $25 March to $105 now. Your $300k would be $1 million right now. Etf's are not even that scary.Had you invested in 2019 already, you'd have a lot more. The March "crash" wouldn't been a problem.
I'd definitely invest in - it's going to be another decent year in the market. There is no reason tho think that the money won't be up in 5-10 years. You are saving it for long term, right?
Invest $200k and wait for a crash with the $100k, so both of you can be happy.
Again, 2019 was a good year also. How could anybody with cash around not have noticed it and get in the market.

Any recommendations?

I've bought VOO and VTI and neither has gone up that much.

When did you buy them? VOO is up like 18% for the year and VTI is up 20%. Those are some pretty good returns. If you are expecting big jumps in the short term, that's not what those funds are for. Those are buy and ignore for years ETFs.

[Anonymous]

Anonymous wrote:

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.

Thanks! Also a noob to investing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Thanks! Also a noob to investing.

OP, tinkering with investments and trying to time the market is a great way to loose money. Most people do buy and hold investing. We invest regularly and do not care what the market is doing. At retirement after decades of investing, we will withdrawal the money.