# Objective, experienced stock market opinion needed please.



## deesierra (Jul 9, 2015)

After selling my mother's home earlier this year, I had about $50K to decide how to put to work for me. With such low bank and CD rates, I opted to go the "risk" route and dive into the stock market. Having no experience in this area, I chose to enlist the services of my bank's financial advisor. That was in April. My brokerage account is now standing at $44K and I am panicking that it has sunk so fast . The advisor keeps saying an upswing is expected by the end of the year, but I just don't trust what's going on in the market and world economy and feel like I should cut my losses and run. Also, I expect to sell my home in about a year and move out of state, so I don't feel like I have a lot of time to wait for this major slump to come back to what it was. I obviously have a very low risk tolerance and diving into the stock market was probably a big mistake...but here I am. I have been struggling with the decision to bail out for several days now. Would very much appreciate your thoughts and opinions!


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## Lon (Jul 10, 2015)

You & me and everyone that has any money invested in the MARKETS has suffered some losses and seen the value of their investments drop since the first of the year. Since I have pension income and do not need any of my investment assets to live on I will leave them invested. My personal opinion is that the market will gradually recover.


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## Don M. (Jul 10, 2015)

Investing in the stock market MUST be a Long Term decision.  The markets are a roller coaster, and if a person cannot stomach the "ride", they are far better off putting their money into something like an Annuity.  Over time, the market trends are UP...but if a person gets nervous every time something like Greece or China occurs, they will get an ulcer.  There are an almost infinite number of conditions and events which can drive the markets up or down, and even the "experts" can only make a semi-educated guess as to what the future will bring.  

I try to follow the markets closely, and move the funds around as conditions dictate.  So far...so good....however, if/when I reach the point where I can no longer comprehend what is going on, I fully intend to roll everything into an Immediate Annuity.


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## WhatInThe (Jul 11, 2015)

Personally I would start by investing the money in mutual fundS if unsure of what stocks to buy. I would go in three different sectors via mutual funds. And yes that includes bond funds even they are taking a hit now. I would go income/high yield for dividends/income even if put right back into the account, another third in an aggressive fund(buy low sell high) and the final third in a specialty fund like metals or utilities a mix of dividends and increasing stock prices. 

Just make sure the funds or clear about the return because it's usually a mix of dividends and stock price. Anything based on stock price means you have to buy low and sell high. The trailing or sec yield tends to give the return on dividends and distributions.

I would leave a couple K in the brokerage as speculative money for individual stocks.

Research & repeat with different sources

Good Luck


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## deesierra (Jul 12, 2015)

:thanks: for your thoughts and ideas. My ultimate decision was to bail out and take the hit, rather than keep stressing that I would lose even more. But the investment world still intrigues me and I've been inspired to learn as much as I can, so at some future point I will feel somewhat confident in jumping back into the market...only this time doing it on my own!


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## Don M. (Jul 13, 2015)

Investing in the stock market is something that requires a lot of knowledge and education...plus, some basic luck.  For anyone who is a "newbie" in this endeavor, I would recommend that they do some good reading beforehand.  A couple of the better books I've read on the subject are "How To Make Money in Stocks", by William O'Neill...the founder of Investors Business Daily, and "You Can Do It" by Jim Stowers, Jr., the founder of American Century Investments.  If a person studies the markets, and follows them closely, they can stand a chance of winning.  However, to just dive in blindly, they might as well go to the casino, and put everything on Red on the Roulette table.


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## Lon (Jul 13, 2015)

Dow jumps triple digits into black for the year as Street cheers Greece…


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## Jackie22 (Jul 13, 2015)

Ahh...that is good news, I'm thinking I'll get out of energy, if it ever gets up to where it was a few months ago....if...if...if..

What are some thoughts on energy... (oil and gas)..


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## Don M. (Jul 13, 2015)

What are some thoughts on energy... (oil and gas)..[/QUOTE]

Energy investments (oil and gas) are a Real Roller Coaster.  The globe is currently experiencing a Glut...so much so that many of the oil rigs and fracking operations are being mothballed.  If the Iran sanctions are lifted, there will be even more oil flooding the markets.  On the flip side, there was news yesterday that gas prices in California are pushing $4 a gallon again, because of that states lack of refineries, and pipelines, etc., such that they are looking for oil and gas supplies arriving by shiploads...once again proving the impact of environmental concerns which do not take consumption into consideration.  

Personally, I think the future upside in energy investments lies primarily in alternative energy...mainly solar.  The costs of production are coming down nicely, and the demand is increasing rapidly.


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## Jackie22 (Jul 13, 2015)

Don M. said:


> What are some thoughts on energy... (oil and gas)..



Energy investments (oil and gas) are a Real Roller Coaster.  The globe is currently experiencing a Glut...so much so that many of the oil rigs and fracking operations are being mothballed.  If the Iran sanctions are lifted, there will be even more oil flooding the markets.  On the flip side, there was news yesterday that gas prices in California are pushing $4 a gallon again, because of that states lack of refineries, and pipelines, etc., such that they are looking for oil and gas supplies arriving by shiploads...once again proving the impact of environmental concerns which do not take consumption into consideration.  

Personally, I think the future upside in energy investments lies primarily in alternative energy...mainly solar.  The costs of production are coming down nicely, and the demand is increasing rapidly.[/QUOTE]

Thanks for the reply, Don, I'm thinking the same on alternative energy.


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## imp (Jul 13, 2015)

IMO, buying common stock blindly, or even placing your funds in the hands of an "account manager", guarantees results about the same as would a craps-shoot. Every stockbroker one speaks to will be most happy to give "hot-tips" of the day. Ask him how many millions of dollars HE has made from them.

Again, IMO, I would carefully study the _preferred _stocks of some well-known and long-time profitable companies, and believe a reasonable dividend rate can usually be found which is above and beyond "going rate".    

A trick I used years ago, but have not studied markets in recent years to see if it even applies anymore: buy corporate bonds on margin, putting up perhaps 30% of the cost. 70% is borrowed, many bond issues could be found which produced dividends sufficient to more than pay the interest, with enough "gravy" left over to beat any other yield found.   imp


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## Cali-Guy (Jul 16, 2015)

deesierra said:


> After selling my mother's home earlier this year, I had about $50K to decide how to put to work for me. With such low bank and CD rates, I opted to go the "risk" route and dive into the stock market. Having no experience in this area, I chose to enlist the services of my bank's financial advisor. That was in April. My brokerage account is now standing at $44K and I am panicking that it has sunk so fast . The advisor keeps saying an upswing is expected by the end of the year, but I just don't trust what's going on in the market and world economy and feel like I should cut my losses and run. Also, I expect to sell my home in about a year and move out of state, so I don't feel like I have a lot of time to wait for this major slump to come back to what it was. I obviously have a very low risk tolerance and diving into the stock market was probably a big mistake...but here I am. I have been struggling with the decision to bail out for several days now. Would very much appreciate your thoughts and opinions!


I'm amazed at how many people have never heard of age-appropriate diversification (into bonds). If you have low tolerance for risk then you diversify into bonds. Bonds smooth out stock volatility, even in 2008.  http://www.yourinvestmentadvise.com/images/chart-33-67-port.jpg

BTW one of THE worst things you can do is dump money into an annuity. Where do I begin! http://www.yourinvestmentadvise.com/annuity-1.html


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## Lara (Jul 16, 2015)

Cali-Guy said:


> BTW one of THE worst things you can do is dump money into an annuity. Where do I begin! http://www.yourinvestmentadvise.com/annuity-1.html


I have an IRA and I was recently told that all IRAs are annuities. Is that true?


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## Don M. (Jul 16, 2015)

Lara said:


> I have an IRA and I was recently told that all IRAs are annuities. Is that true?



It all depends upon HOW your IRA is invested.  Some Ultra Conservative IRA investments are probably little more than an annuity, but most IRA's that are invested in stock market holdings are the opposite of an Annuity.  A good, well managed IRA should be returning high single digit percentages...maybe even double digit...returns, over time.  An annuity returns almost Zilch.


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## Jackie22 (Jul 16, 2015)

Lara said:


> I have an IRA and I was recently told that all IRAs are annuities. Is that true?



Hi Lara, the annuity thing is not true, I have a Roth IRA and regular IRA set up with Fidelity, they both consist of mutual funds and stocks....also an individual Annuity, that I'm already drawing payments on that I bought into many years ago.


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## Lara (Jul 18, 2015)

Don M. said:


> It all depends upon HOW your IRA is invested.  Some Ultra Conservative IRA investments are probably little more than an annuity, but most IRA's that are invested in stock market holdings are the opposite of an Annuity.  A good, well managed IRA should be returning high single digit percentages...maybe even double digit...returns, over time.  An annuity returns almost Zilch.


Thank you Jackie and Don. My IRA is very conservative I was told by my advisor. I read somewhere online that if it's an annuity you can't get out of it. My IRA was managed by Merrill Lynch who took me to the cleaners (Enron etc) so I moved it to VALIC who had an office at the hospital I worked at...so I trusted them but they were there more for 403B management for the employees I think. He was the one that told me all IRAs are annuities and that mine is (he first told me mine wasn't and then changed…hmm). I've had it for 28 years and it's just barely doubled in value. Luckily it's enough for my retirement with other investments (and I have no debt) but I wish I had been more attuned all those years. I foolishly felt no one would take advantage of a young overwhelmed widow raising 4 kids alone…and I trusted them. It's only when I retired this April that I had time to start reading and educating myself.


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## oldman (Jul 18, 2015)

I also shorted stocks several years back when I was more of an aggressive trader and did some day trading. It was a way of earning quick cash, if I was successful at making the proper picks. I did get hit a few times, but overall, did make money. You have to be a real player to short stocks. My favorite short plays were mostly in the utilities sector. I also have a friend that has a lot of money. He is an options trader. You need a lot of money to get into this type of trade. Buying and/or selling puts and calls requires much diligence and a lot of guts. Like they say, "No guts, no glory."  I did try a few trades, but it went nowhere. I would never buy enough to make any real money and I hated coming out on the short end when the options prices would expire and the prices were lower than I paid, especially on the day they call, "Triple Witching Friday." You had to hope that if option prices were down that either bond prices or stocks would be up. There were days when all three would go down and on those days, I would have to go lie down and lick my wounds.


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## Don M. (Jul 18, 2015)

I don't put much faith in "financial advisers", or "investment managers".  Far too many of them are more interested in the commissions they can generate by moving their clients holdings around....charging a Commission, of course, for every move.  This is called "churn", and it makes these "advisers" rich.  A far better approach is to research the various mutual funds on sites like Morningstar or Lipper, and chose those that match your needs, and have a team of managers who have been in the business for many years, and charge a low annual fee.  Then, you need to be aware of market conditions, and be able to move your funds around as market conditions dictate.  Such a "self managed" IRA can return a nice amount of growth and safety, and provide a lifetime of good income.  

At the risk of jinxing myself, I have been pulling payments out of my IRA for over 12 years, and as of yesterday, I have 98% of what I started out with...essentially giving me 12 years, and almost $300,000 of "free money".  My latest annual statement shows an average return of 10.3% over those 12 years.  I moved everything into the Money markets in 2007/8, when it became obvious that we were headed for a major recession, then got back in when the recovery began in 2009.  I probably move my funds around about twice a year, on average....the old saying of "Go away in May, and Come back in October" seems to hold true, most years.  

Keeping on top of the daily financial news, and watching CNBC frequently can be time well spent.


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## oldman (Jul 18, 2015)

Don M. said:


> I don't put much faith in "financial advisers", or "investment managers".  Far too many of them are more interested in the commissions they can generate by moving their clients holdings around....charging a Commission, of course, for every move.  This is called "churn", and it makes these "advisers" rich.  A far better approach is to research the various mutual funds on sites like Morningstar or Lipper, and chose those that match your needs, and have a team of managers who have been in the business for many years, and charge a low annual fee.  Then, you need to be aware of market conditions, and be able to move your funds around as market conditions dictate.  Such a "self managed" IRA can return a nice amount of growth and safety, and provide a lifetime of good income.
> 
> At the risk of jinxing myself, I have been pulling payments out of my IRA for over 12 years, and as of yesterday, I have 98% of what I started out with...essentially giving me 12 years, and almost $300,000 of "free money".  My latest annual statement shows an average return of 10.3% over those 12 years.  I moved everything into the Money markets in 2007/8, when it became obvious that we were headed for a major recession, then got back in when the recovery began in 2009.  I probably move my funds around about twice a year, on average....the old saying of "Go away in May, and Come back in October" seems to hold true, most years.
> 
> Keeping on top of the daily financial news, and watching CNBC frequently can be time well spent.



Are you sure of your dates? The bottom hit in March of '10 as the Dow fell to 6600. The recovery then began in May and has never stopped, other than for the few hiccups along the way. As for watching CNBC, I have always recommended to my investment friend that yeah, I agree, there is some good stuff on there, but one still has to have the insight to be able to cut through the BS. Some advisers, analysts or whatever you want to brand these guys, can give some very contradicting opinions. One guy or gal will say it's a good time to buy into corporate bonds and the next person will say to stay away from the bond markets. You almost have to have a sixth sense when it comes to investing. I am not a genius by no means, but I have been at this since 1974 and day traded for almost 15 years. I was into everything from equities, bonds, currencies, options, futures and on and on. I tried most everything, except margin trading. I was never attracted to that because I never felt comfortable with the protocol it presents. I did like to short stocks. That was always fun to me. 

I have my major accounts with Fidelity. They have guided me very well over the years. I do my single transactions with Scottrade. When you place the order with them, they buy in real time, so I always know exactly what I paid for a stock. Some investment houses do a 20-minute delay. I would advise against that type of company. I also like T.D. Waterhouse, but seldom use them. Have you shorted any stocks? What was the outcome? Not trying to be nosey, but just curious. I just shorted a stock yesterday. We'll see how that works out. 

People keep telling me that "playing the market" is like a crap shoot, but quite honestly, if we do our homework, we can invest wisely. We may not always come out on top, but we will be OK in the long run.


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## Don M. (Jul 18, 2015)

oldman said:


> Are you sure of your dates? The bottom hit in March of '10 as the Dow fell to 6600.
> 
> People keep telling me that "playing the market" is like a crap shoot, but quite honestly, if we do our homework, we can invest wisely. We may not always come out on top, but we will be OK.



Yeah, those dates that I flung out are pretty close.  I went back and looked at my latest annual statement from American Funds, and it looks like I got out in late Oct. 2007, and stayed pretty much on the sidelines until April of 2009.  During that 18+ months, I probably lost about 15% of my IRA, but the major indexes were down almost 50%.  In the years since, the IRA has recovered quite nicely.  The Housing bubble is what got me out of the markets.  Banks were making loans to anyone with a pulse, and then packaging those bogus loans into CDO's, etc., with virtually Nothing to back that worthless paper up.  It still makes me mad that some of these bankers and hedge fund managers weren't sent to jail.  After the S&L crisis in the 1980's, hundreds of those crooked bankers were fired, and many went to jail.  

I flip through CNBC, Bloomberg, and even Fox Business channels most mornings during the week.  I don't put much faith in any of the "pundits", but if I listen to enough of them I can usually get an idea of where the markets are headed, and adjust my holdings accordingly.  I would like to find some Safe Haven for our money that didn't require some constant vigilance, but there really isn't anything out there other than the stock market to help people stay even or make some gains.  Bank accounts pay virtually nothing, bonds are of minimum value, and CD's etc., barely keep up with inflation.  I am convinced that this nations massive National Debt is what is keeping the Fed from raising its rates, and this is suppressing virtually everything else.


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## Bullie76 (Jul 19, 2015)

I enjoy following the markets and do my on investing. I have been an individual stock guy over the years with ok returns. But in all honesty, would have done just as well if I had just put my money in a blend of mutual funds and let it ride. I am slowly selling out of my individual stocks and buying index etf's. Will give me better diversification. For people who do not care to spend much time studying the markets, lifestyle funds and age related target funds are a great way to go. See Vanguard link. Fidelity has similar stock/bond blended funds. 

https://personal.vanguard.com/us/funds/snapshot?FundId=0724&FundIntExt=INT#tab=0

As far as tv financial shows, I find most of them are more for short term traders. CNBC for example seems to be dominated by guys who are only interested in short term values, not the long haul. Easy for a causal investor to get spooked out of the market by some of their short term discussions. I do tune in early in the morning and after the close just to see what is going on, but that's about it. I actually like the Nightly Business Report on PBS the best. They just give the news w/o trying to entertain you.


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## Don M. (Jul 19, 2015)

As far as tv financial shows, I find most of them are more for short term traders. CNBC for example seems to be dominated by guys who are only interested in short term values, not the long haul. Easy for a causal investor to get spooked out of the market by some of their short term discussions. I do tune in early in the morning and after the close just to see what is going on, but that's about it. I actually like the Nightly Business Report on PBS the best. They just give the news w/o trying to entertain you.[/QUOTE]

Yeah, if a person followed these TV Pundits, and tried to keep up with their predictions, they would soon have a Stomach Ulcer.  There are any number of good fairly safe options for most people to invest in....If they do their homework, and are Not trying to get rich overnight.  

One thing that caught my attention recently was a report that "Counterfeit" Gold bars are becoming an increasing problem.  It seems that there is a thriving industry in China whereby these crooks mold a bar from Tungsten..which weighs almost the same as gold..and then layering a coat of gold over it, and selling these bars as the real thing.  Gold and Silver have always been considered a safe haven in times of extreme downturn, but now, even that option may be coming suspect.


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## oldman (Jul 19, 2015)

Don...You are correct. The TV financial shows speak of what's happening now, or what has already transpired. Since people like you and I do not have a seat on any of the exchanges, we have to rely on where we can get the best news. Many investors turn to the WSJ. I always preferred IBD for manly one reason. It is shorter and more compact. It gets to the point and eliminates many of the op-ed pieces. I also like their charts for tracking stocks. For me, it's just a better, easier and more clearer to read. The guys sitting in the seats on the exchanges gets their news long before any of us, thus the reason why the markets can spike up or down in an instant before any of us know what's going on. I think this is one of the things that always perturbed me about day trading. Trying to make decisions of when to buy-sell or sell-buy in an instant can sometimes be on a 'gut' feeling, which is not the best way to make financial decisions. 

Another thing that bites me big time is why so much emphasis is put on what's the Treasury (or Fed) going to do. Will interest rates go up, down or hold their position? Why would a small investor like me worry about if the Treasury raised rates by 25 basis points, which is a quarter of a point? To me, that's chump change and I would never hesitate to continue my daily trading activities. Some investors tell me that if the Treasury makes any raise at all, it may trigger a signal that more rates hikes may be in the future. So, the large investors worry about these sorts of things. It's just a never ending cycle of watching and learning and that's the reason I stopped day trading. I no longer wanted to invest the times that it takes to be proficient. However, that hasn't stopped me from making a trade now and then.


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## Don M. (Jul 19, 2015)

"Day Trading" is Not for the faint of heart...or the Individual Investor.  The deck is stacked against the little guy in that Arena.  A couple of years ago, there was a bunch of Hoopla about the various trading centers in NYC, and how the Big Guys were stacking the deck with their electronic trades.  It was shown that the "Speed of Light" was making some of these guys rich, while costing others millions per day.  They Literally had to install miles of fiber optic cable to some of these sites to even the odds.  Some of these sites were able to see transactions before they reached the NYSE, and make buy or sell orders microseconds before the real transactions took place.  

I like to flip through the TV channels at breakfast to see where the markets are headed on a given day....paying close attention to the Asian and European markets, which trade earlier in the day.  Then, I'll look a some other sources on the Internet, and be prepared to either cheer or curse the days activity.  My funds are allocated such that only a major change in the routine will have much effect....in which case, I have been lucky enough to see it coming, and bail out ahead of time....so far,(knock wood).  IBD is an excellent source for market information.  Perhaps the best book I've ever read on the subject was written by W.J. O'neill...the founder of IBD.  I have given up trying to buy/sell individual stocks...I'm not savvy enough to compete in that arena.  I did built up and keep quite a few shares of the company stock, when I was working...which pay me a nice little dividend 4 times a year.  I keep those shares just in case something happens where we need some extra money.  

Insofar as the Fed funds rate is concerned....I think the biggest issue is how that rate relates to the interest rate of T-Bills, and the impact that would have on the Interest on our National Debt.  Right now, with these ridiculously low interest rates, the US is paying out around 400 billion a year to the holders of these bills....mostly foreign investors.  If the Fed Funds rate were to climb back to a more normal 4 or 5%, the Entire Federal Budget would be consumed just paying the Interest on this 18 Trillion dollar debt....just imagine what That would do to our economy.  This National Debt is an 800lb. gorilla hiding in the closet, just waiting to leap out and crush us all.


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