Another Recession?

[Superbone]

Nodack, that is pretty pathetic if you haven't made money in the last 10 years with that brokerage firm. It doesn't sound like they have your best interests in mind and you're paying a fee on top of that for their disservice. You might want to think about pulling your money out and opening a Vanguard account. You can invest in a simple three or four fund portfolio there and they have the lowest index fund fees in the industry. All you have to do is rebalance it if necessary once or twice a year. I guarantee you would have done much better had you done that 10 years ago. It probably should have at least doubled in that time frame. I'd be happy to answer any questions if you're interested in pursuing this.

I have a four fund portfolio:

http://www.bogleheads.org/wiki/Vanguard ... _portfolio

[Nodack]

I am a long term guy. I don't day trade different stocks all the time. When I bought Apple, that was the only stock I had ever purchased until the crash at the end of Bush's Presidency. I do 't remember the date, but it has to be a decade of owning it before selling it. I did pick one of the hottest stocks during that time. I had no idea what Apple had up their sleeves. I just knew with Jobs at the helm they weren't going to go out of business and since their stock was almost free at the time it seemed like a great opportunity that I wasn't going to pass up. I was upset that it took so long to get an account going before I could buy. I was worried a lot of other people would see what I was seeing and make the stock go up before I could purchase it, but it stayed low until the iPod made it big.

After the crash I stayed in for a long time, maybe six months before bailing and selling Apple. The day after I sold Apple it reached its bottom price proving Superbones concept. The market hovered right there for a month or so as I recall before starting its climb. I decided right after that that it was time to enter the ring again while everything was low and starting its climb. I got Apple again, but decided to diversify and also bought big companies like GM, GE, U.S. Airways and a little later some little Chinese company Shengda Tech that makes carbonated bubbles or something on an Internet stock tip that couldn't possibly fail. Apple went up around 800% by the peak from the recession. U.S. airways became American, but went up around a whopping 1000%. GE went up pretty good, but not near those numbers. GM has struggled and hovers about break even. Shengda Tech went bankrupt.

My other account is a large investment management company who managed my dads money, so we just kept it with them. It's a mixure of things, mutual funds, ira's, life insurance.

Andy I didn't lose that much in one day. It was at its peak a month or so ago and has been falling steadily since causing concern. The Chinese economy has taken a turn for the worse a has everybody spooked. China is now in trouble and on Friday the stock market took a big hit . I stewed over the weekend and decided it was time to bail. I set my internet app to sell all my shares the second the market opened Monday morning and from the time the market opened to the time my app actually sold the shares I had lost an additional 7k which really pissed me off, but then I read that the market plunged over 1000 points in the first half hour after opening I figured everybody else was doing the same thing. In fact I heard later that day that the company I use was having a lot of problems with their online orders because of the heavy traffic bogging them down.

[Nodack]

Thanks for the advice Superbone. I have thought long and hard about dumping that brokerage firm a long time ago, but didn't know how to go about doing it. Watching the movie Wolf Of Wall Street only added to my paranoia.

Life insurance. There are different kinds of life insurance policies out there and they can get complicated. I get confused. We have a kind that is like an investment account. You don't have to die to get money back. It matures and you stop paying into it at some point, but are covered and can cash it in. I am not sure how that works when you just cash out early and do something else. I guess I could keep the life insurance with them and move everything else. I have also heard from my tax lady that used to do a brokers taxes that according to him, life insurance is their biggest money maker and is kind of a scam.

I am kind of a fan of the online trading thing and wonder if the company I use can handle things like IRAs, Mutual/Index funds like the Vanguard one. Their trades are something like $7.50. That seems reasonable and the app is so convenient. I am interested in the Vanguard thing Superbone. BTW, what is the difference between an Index fund and Mutual fund?

[Nodack]

At my online investor site they do sell IRAs and mutual funds. I looked up Vanguard and there are hundreds of different Vanguard funds to choose from. That's not confusing.

[Superbone]

A mutual fund costs more because somebody manages it and attempts to "beat the market" while an index fund is less expensive because it just tries to copy the movements of an index of a specific financial market. For example, I have a total US stock market index fund which basically buys every stock in the stock market and just follows the performance of the overall market. The stock market has averaged 10% per year since 1926.

My understanding is the kind of life insurance that you invest into is called Whole Life Insurance and that it is a ripoff. Everything I read says to get term insurance at a much lower cost and invest the difference yourself in the stock market.

The problem with these brokerages is that they have a vested interest in getting you to purchase their products which benefits them and not you. The fees that these brokerage firms charge add up big over time and cut way into your profit.

http://money.usnews.com/money/blogs/the ... our-broker

[Superbone]

At my online investor site they do sell IRAs and mutual funds. I looked up Vanguard and there are hundreds of different Vanguard funds to choose from. That's not confusing.

There are no fees to buy directly from Vanguard. Just the underlying cost of the funds.

Here, I'll make it easy for you:

Here are my four Vanguard funds and their expense ratios:

VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) - 0.05%
VTIAX (Vanguard Total International Stock Index Fund Admiral Shares) - 0.14%
VBTLX (Vanguard Total Bond Market Index Fund Admiral Shares) - 0.07%
VTABX (Vanguard Total International Bond Index Fund Admiral Shares) - 0.19%

I'm aggressive too. My stock/bond allocation is 80% stocks and 20% bonds.

[Ghost]

I will leave it alone. I highly recommend you spend some time researching what you are doing before you jump back in, because you are playing a very risky game and having a few big wins might make you feel like you know what you are doing, but (and not to be snarky) when you have to ask someone from a basketball message board what the difference between fund types is, that's a rather huge red flag.

Sent from my Nexus 6 to annoy Superbone using Tapatalk

[Indy]

I use Vanguard for some of my investments too. Unfortunately my company 401k is very limited to which vanguard funds you can choose. They are all very low cost, but not the best performers in their portfolio.

Since August 1st I have lost 50k. That's not cool.

[Indy]

Thanks for the advice Superbone. I have thought long and hard about dumping that brokerage firm a long time ago, but didn't know how to go about doing it. Watching the movie Wolf Of Wall Street only added to my paranoia.

Life insurance. There are different kinds of life insurance policies out there and they can get complicated. I get confused. We have a kind that is like an investment account. You don't have to die to get money back. It matures and you stop paying into it at some point, but are covered and can cash it in. I am not sure how that works when you just cash out early and do something else. I guess I could keep the life insurance with them and move everything else. I have also heard from my tax lady that used to do a brokers taxes that according to him, life insurance is their biggest money maker and is kind of a scam.

I am kind of a fan of the online trading thing and wonder if the company I use can handle things like IRAs, Mutual/Index funds like the Vanguard one. Their trades are something like $7.50. That seems reasonable and the app is so convenient. I am interested in the Vanguard thing Superbone. BTW, what is the difference between an Index fund and Mutual fund?

Hey Nodack, you don't have kids right? Why do you have life insurance? Seems like it would be much better spent putting that money somewhere else.

[Indy]

I am kind of a fan of the online trading thing

I am too. But I only do that with a portion of my account (about 20%). I think I own 5 stocks right now, and I change those around as I see fit. I haven't owned any of them more than 2 years. My good buys are Amazon, Facebook and Disney and my company stock. The worst of those is Disney (which was up 40% before this month), and the best is Facebook which is still up 110%. The worst is Apple, as I bought high on that, but I plan on keeping that for a while.

[Nodack]

I will leave it alone. I highly recommend you spend some time researching what you are doing before you jump back in, because you are playing a very risky game and having a few big wins might make you feel like you know what you are doing, but (and not to be snarky) when you have to ask someone from a basketball message board what the difference between fund types is, that's a rather huge red flag.

I think I have been successful not because of luck, but because I just used common sense. I am not a stock or mutual fund expert by any stretch of the imagination. I was sort of an expert on Apple's history and when Jobs was rehired I was positive that he would help the company more than hurt it. I saw an opportunity. I was poor, scraped some cash together and it paid off. Reinvesting in established companies that were down from the last recession right at the bottom when things were just starting to turn around also seemed like a no brainer to me and it paid off. I wouldn't know what to invest in now and wouldn't just buy in just to buy in without a solid plan. I try to go for sure things and if it isn't I don't do it. Getting back in the stock market today is definitely not a sure thing, therefore my money is going to sit in the bank.Investing in the vanguard thing sounds like a fairly safe bet, but I wouldn't even start that up today with the markets all in fear mode.

The worst is Apple, as I bought high on that, but I plan on keeping that for a while.

Apple has seriously peaked and is riding the wave that Jobs made. I have been an Apple fan forever, but they are at a dangerous place. Can they continue to make magic without Jobs? After Jobs was fired the company went a completely different bad direction and it almost killed the company. The only reason Apple didn't die is because Bill Gates needed them to survive and gave them money to stay afloat, so that Microsoft didn't become a Monopoly. Jobs totally turned things around, but now he is dead. They are going to have to prove they can keep it going without Jobs. I would seriously be afraid to buy Apple today unless the bottom fell out of the market and it became cheap. It's fairly cheap right now, but not cheap enough for me.

Hey Nodack, you don't have kids right? Why do you have life insurance? Seems like it would be much better spent putting that money somewhere else.

No kids. I have whole life insurance because my salesman sold me on it. I bought too much coverage and at one point I asked them to lower the amount from 500k to 200k coverage, so I could put some of that money to better use, but my life insurance premium stayed the same which really irritated me. I asked my guy and he gave me a bunch of mumbo jumbo investment talk. You guys are right, every fiber in my body tells me these guys are ripping me off with this stuff. One good thing about the whole life policy over term is that if I decide to cancel it, I get a chunk of my money back.

I think I will fire my investment company and manage everything myself. I can transfer my IRA's without penalty. I am not sure what happens to the bonds, annuities, money market funds. I assume I just have to cash out and take a big tax hit and then reinvest. Thats the part that scares me. I don't know this stuff very well and I am afraid I will take a big tax hit. I'm not really trying to cash out, I am just trying to move my investments. You would think there would be a way to do this without making it look like I am retiring and cashing in. Like Ghost said, RED FLAG Warning! I do have that online account and those guys do offer different levels of interaction. Maybe I could talk to them and they would be able to answer my questions. Then again they want my money too and how much do I trust them too. At least with you guys I can get honest answers because you have no stake in it.

[Indy]

Whole life is an investment that nearly everyone says never to buy (except Whole Life salesmen).

Market closed up over 600 points today. I wonder how lasting that is...

[Nodack]

http://www.marketwatch.com/story/dows-4 ... 2015-08-25
Dow's 4-day streak of 200+-point losses is the longest in its history. Now a 600 point gain in one day. I guess that's why they call it volatile.

[Superbone]

I think I will fire my investment company and manage everything myself. I can transfer my IRA's without penalty. I am not sure what happens to the bonds, annuities, money market funds. I assume I just have to cash out and take a big tax hit and then reinvest. Thats the part that scares me. I don't know this stuff very well and I am afraid I will take a big tax hit. I'm not really trying to cash out, I am just trying to move my investments. You would think there would be a way to do this without making it look like I am retiring and cashing in. Like Ghost said, RED FLAG Warning! I do have that online account and those guys do offer different levels of interaction. Maybe I could talk to them and they would be able to answer my questions. Then again they want my money too and how much do I trust them too. At least with you guys I can get honest answers because you have no stake in it.

Nodack, I just helped my mom move from a brokerage to Vanguard at the end of last year. You can transfer most of your assets "in kind" without having to sell and incur tax hits.

Check out Rob Berger's Dough Roller podcast if you can. He has a ton of great podcasts for the DIY investor:

http://www.doughroller.net/thepodcast/

[Ghost]

http://www.marketwatch.com/story/dows-4 ... 2015-08-25
Dow's 4-day streak of 200+-point losses is the longest in its history. Now a 600 point gain in one day. I guess that's why they call it volatile.

I'm sure you will guess it right tomorrow.

Sent from my Nexus 6 to annoy Superbone using Tapatalk

[Nodack]

Thanks for all the help Superbone. I really appreciate it.

Thanks for the encouragement Ghost.

[Superbone]

Thanks for all the help Superbone. I really appreciate it.

Thanks for the encouragement Ghost.

No problem. Feel free to ask any questions here or in private. I'll do my best to answer them. I used a service called Betterment for a couple years that I paid 0.15% to keep a diverse, balance portfolio but I have gone full on DIY since then.

Don't worry about Andy. He lives to annoy.

Sent from my TitanBlack 64 computer using my fingers to type on a keyboard

[Nodack]

Investing can be pretty complicated and I am just doing basic stuff. I have a friend that is into tvix and he is always trying to get me into it. Sounds too scary for my blood. I like the DIY stuff though. Having control over your own finances is a little scary, but empowering at the same time.

[Superbone]

Investing can be pretty complicated and I am just doing basic stuff. I have a friend that is into tvix and he is always trying to get me into it. Sounds too scary for my blood. I like the DIY stuff though. Having control over your own finances is a little scary, but empowering at the same time.

Nodack, it doesn't have to be overly complicated. Check out those three and four fund portfolios I linked to. They are extremely diverse while being quite simple to manage. They cover the entire stock and bond markets in single funds. But you're right, it's definitely empowering.

I've never heard of tvix. I'm not looking to gamble though with my life savings.

[Nodack]

I hear that. Me either. My friend tried to explain tvix to me. It's one of those day trading things where you never own anything long and kind of bet against the market I think. You have to stay way up on it at all times. Way scary. I'm with you, keep it simple and safe.