So now that the stock market is crashing, probably a good time to invest for the long term?
Anybody have any recommendations for smart stock investments?
Anybody have any recommendations for smart stock investments?
Yes. Buy low cost index funds through a tax advantaged account. Vanguard is a good option. There are others. Consider a target-retirement date fund until you feel savvy enough to pick and choose stocks yourself. Even then, realize that the majority of professional investors, all certain they know enough to beat the market, don't. Buy every month from now until you retire, regardless of whether the market is up or down. When it goes up, it will soon go down. When it's down, it will soon go up. The overall long term trend will be up. Don't take a penny out until you retire. Check the balances no more than once every six months. Be patient. Wait for returns. They will come. Patients is rewarded. Panic is punished.So now that the stock market is crashing, probably a good time to invest for the long term?
Anybody have any recommendations for smart stock investments?
So now that the stock market is crashing, probably a good time to invest for the long term?
Anybody have any recommendations for smart stock investments?
1+ AgreeYou could probably wait another 1-3 weeks and the DJI will go down more, probably below 20,000. You can buy then. Just buy index stocks.
Look, you could probably buy now for your retirement account and be OK.
The Dow Jones
Feb 13th: 29,432
Mar 13th: 21,300
That is a 27.6% drop in 1 month. On pure fear.
If you get in now all you have to do is wait 1-2 years and it will probably be back up to were it was before. Everything will soon be back to normal once we develop a vaccine or some anti-viral drug for COVID-19.
Now is a fine time to get in for your retirement accounts!
I have about 30K in cash in my SEP-IRA. I'll probably distribute among my 5-6 funds shortly. If it continues to drop another 5-10 percent, I'll probably fully fund my SEP-IRA (56K) immediately for this year and just buy more.
For long term investors THIS IS EASY MONEY
I'm roughly buying 15k per month right now. Vti, vxus, bnd. Keeping it simple. Doing some occasional tax loss harvesting as well.
Well if you bought today, it should settle at market close, right?I bought VTI earlier today too. What is the probability of that?
nyc is on true 48 hour lock in right? Should probably start investing right after that. Economy cant get much lower than 48 hours of no activity from our financial center.
That's still timing the market, hard to get timing right. I'm my opinion dollar cost averaging is the way to go. I have automated weekly deposits going on.
Over the next few months, businesses especially the hotels, restaurants, and travel industry will start laying people off. World wide economies will see drops in their gdp. Earnings from the quarter will start showing drops, analysts will start doing downgrades. What happens when some large corporation goes bankrupt? What if a smaller country goes bankrupt?
So yes, things can still continue to go down even after 48 hours of new York shutting down. No one can truly predict what will happen. Dollar cost averaging is the way to go. If there is a day with a massive drop, of course you can add more on those days into the market.
i got a pretty significant windfall a few months ago and have been pre-contempletive about getting investments going ever since. i'm a resident who is working a lot right now. paid off my student loans and still have a pretty nice chunk of cash just sitting in a savings account. i have read some intro level stuff, but would love any practical guidance on how i can start investing now that the time seems very right.
You make an incredibly good point. You often hear that we should expect the stock market to go up 6-8% a year in the long term and not to expect anything more or less than that to last. So I did some more research, like you did. The S&P 500 was 782, twenty five years ago (3/1/95). Then, even considering the post 9/11 crash, '08/'09 crash, and the current crash to 2,296, it's been up 7.7% per year, every year for 25 years. Go back 30 years to 3/1/1990 and it's gone from 645 to 2,296, which is 8.5% per year, every year for 30 years, including the current low point we're at today.2 - At the moment I type this post the stock market is up 9% from where it was 5 years ago. Noone on this forum is going to become homeless because of COVID 19.
You make an incredibly good point. You often hear that we should expect the stock market to go up 6-8% a year in the long term and not to expect anything more or less than that to last. So I did some more research, like you did. The S&P 500 was 782, twenty five years ago (3/1/95). Then, even considering the post 9/11 crash, '08/'09 crash, and the current crash to 2,296, it's been up 7.7% per year, every year for 25 years. Go back 30 years to 3/1/1990 and it's gone from 645 to 2,296, which is 8.5% per year, every year for 30 years, including the current low point we're at today.
Lessen: The stock market is very risky in the short term. In the long term, if you're someone who hopes to be around in another 10, 15, or 25 years as I would like to (God willing), it's very safe. But you gotta get in and stay in through these ups and downs, for decades. If you try to time the market, you'll end up selling when it's down (because that's when everyone's panicking and telling you the stock market's bad), and not selling when it's up (because everyone's saying, 'Stay in, it's only going to keep going up') and that's the opposite of what you want to do, which is, "Buy a low prices, sell at high prices." You almost have to the opposite of what everyone else is saying at any given time.
SPX | S&P 500 Index Overview | MarketWatch
SPX | A complete S&P 500 Index index overview by MarketWatch. View stock market news, stock market data and trading information.www.marketwatch.com
Advice is simplei got a pretty significant windfall a few months ago and have been pre-contempletive about getting investments going ever since. i'm a resident who is working a lot right now. paid off my student loans and still have a pretty nice chunk of cash just sitting in a savings account. i have read some intro level stuff, but would love any practical guidance on how i can start investing now that the time seems very right.
That's still timing the market, hard to get timing right. I'm my opinion dollar cost averaging is the way to go. I have automated weekly deposits going on.
Over the next few months, businesses especially the hotels, restaurants, and travel industry will start laying people off. World wide economies will see drops in their gdp. Earnings from the quarter will start showing drops, analysts will start doing downgrades. What happens when some large corporation goes bankrupt? What if a smaller country goes bankrupt?
So yes, things can still continue to go down even after 48 hours of new York shutting down. No one can truly predict what will happen. Dollar cost averaging is the way to go. If there is a day with a massive drop, of course you can add more on those days into the market.
Step 1) decide stock to bond allocation depending on your perceived risk tolerance. For example , I'm 85 percent stock.and 15 percent bonds.
These graphs on the link below from vanguard can help you decide on what asset allocation you are comfortable with
Model Portfolio Allocation | Vanguard
Vanguard's portfolio allocation models are designed to help you understand different goals-based investment strategies. Discover what best fits your needs.personal.vanguard.com
Step 2) decide US to international stock ratios out of your stock portfolio. For example: I'm roughly 60 percent US, and 40 percent international. Vanguard has a white paper where they show a bunch of graphs and believe between 30-45 percent is an optimal percentage of international stocks for returns and decreased volatility. Google "vanguard international investing white paper" and you will get links to several pdf files.
Step 3) start dollar cost averaging (weekly deposits) into a broker account of your choice.
Step 4) buy VTI, VXUS, BND in the above determined ratios.
Step 5) intermittently as the market keeps dropping, do tax loss harvesting. This only applies to a taxable account, which someone putting in a large chunk of money will require. Tax loss pairs are as following:
Vti pairs well with schb, Iwb, itot, SPY, schx
Vxus - ixus, veu
Bnd - Agg
Step 6) rebalance every now and then to maintain your desired asset allocation as above.
And that's about it. That's all there is to it.
Alternatively if steps 4-6 seem too difficult. Invest in a Target retirement fund and just keep doing that automatically and forget about it.
Don't do target date in taxable.
It's not optimal, but people who know absolutely nothing about investing and have no willingness to learn, they can benefit from dumb Target date funds and life strategy funds.
But really vti, vxus, and BND/VTEB (vteb if taxable), is the way to go in my opinion.
I wish i had a lot of assets to invest ((( i guess I'll keep doing my 20k/month -_- but i wish i had an extra 1 mil in cash just lying around right now to put into the markets.
I wish i had a lot of assets to invest ((( i guess I'll keep doing my 20k/month (...)
I also have been putting away considerable amounts and wish I had a million dollars to invest, but listen to how you sound.
Respectfully, this is also a time for us to be grateful for the still-fortunate positions we worked very hard to be in relative to what it could be, especially right now.
Our Roth IRAs are 100% VASGX. At this point the balances are high enough that I could convert all of it to admiral shares of the underlying funds and drop the international bond portion, but I just haven't felt it worthwhile yet.
It's not worth it in a retirement account.
But in a personal account i think it's worth it for the tax loss harvesting benefit
Well if you bought today, it should settle at market close, right?
Ahh. I wasn't reading closely. I always buy admiral funds.VTI is an exchange traded fund (ETF) so it acts like regular stocks. As soon as you buy it, you own it at that price. Mutual funds, on the other hand, are bought after the market closes that day.
Don't do target date in taxable.
It's not optimal, but people who know absolutely nothing about investing and have no willingness to learn, they can benefit from dumb Target date funds and life strategy funds.
Dumb noob here. Why is this a bad idea (other than tax-advantaged is better than taxable)?
Dumb noob here. Why is this a bad idea (other than tax-advantaged is better than taxable)?
Difficult to tax loss harvest. Potential issues with distributions and capital gains.
Worse for tax loss harvesting. Individual items are better to tax loss harvesting. For example if US stocks are down and international are not, then you can tax loss harvesting the US stocks. The all in one portfolio may not give you as many opportunities to tax loss harvesting essentially.
Secondly, it contains the total bond market. High income earners may be better off keeping total municipal bond funds as they are tax free in a personal account.
Also, the all in one funds do not contain the admiral funds which have the lower ER.
Thanks for the replies.
Any recommended reading material on the specifics of this for a total beginner? I read the Whitecoat Investor book a while back and remember it being good on the general ideas (live like a resident, tax-advantaged accounts are good, fixed-asset allocation is the way to be), but quite light on the logistics on how to implement these plans.