Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Buehler445]

Originally Posted by lewdog

I'm just trying to avoid the fact that you can't go back and add money later to a ROTH for years you didn't max it. If I put it in, even to sit in a money market account, in case I need access to it this year in a worse case scenario, it also leaves open the fact that I may not need it this year and then can invest it as needed for the next few decades.

So while my emergency fund needs built back a bit to my normal level, I feel like not maxing my ROTH this year is a bad idea just to put my emergency fund where I want it, even though I can withdraw on a ROTH if needed almost like an emergency fund.

I hope I'm making sense.

Makes sense. I hadn’t thought of it that way.

[ChiliConCarnage]

Lew,

Yeah, that makes sense. Depending on your broker, you may need to choose a money market fund or they may default free cash into one. Vanguard defaults to a good one, Schwab puts me into a cash account that pays nothing but you can buy SWVXX or one of the others and get 4% interest or so

Schwab Value Advantage Money Fund® – Investor Shares (SWVXX). 7-day yield (with waivers) as of 12/28/20224. 4.26%. Minimum Initial Investment.

Short term tbills are pretty juicy (nominally) so money market returns are alright. Well, based on what was available for years

[Hog's Gone Fishin]

Originally Posted by myselff77

Who is the company paying a monthly dividend at 8%? I'll put some money into that. I need to start building a car fund anyway.

I've got my daughter in "MAIN" It pays monthly at 7.4% right now

Keep in mind it's 7.4% yearly but pays monthly which gives you an advantage in compounding.

[Hog's Gone Fishin]

Originally Posted by lewdog

Math doesn't add up, although I agree on not paying cash for a depreciating asset like a car when interest rates are low.

Dividends are paid off the stock price. So getting an 8% dividend is not like it's extra cash. After a stock goes ex-dividend, the share price typically drops by the amount of the dividend paid to reflect the fact that new shareholders are not entitled to that payment.

So while you're getting a "dividend," you capital tied up in the share price is dropping too. Couple that with a stock that still changes value like any other stock and that $50k you put in this year, could easily only be worth $30k just from a bear market alone.

Too many people think dividends are free money, and most are not.

I was throwing a generality out there . I know the math isn't correct. It's the concept.

I'm interested in what you say about the price action of a dividend stock dropping when a dividend is paid. That's interesting. Seems like there would be no point in owning a dividend stock.

My daughter invested $3200 in MAIN exactly 2 years ago and the value now is $4181. ETRADE says her gain is 12.56%

Thats 30.65% increase by my calculation 3200 to 4181 . What am I missing?

[Rain Man]

Originally Posted by Hog's Gone Fishin

I was throwing a generality out there . I know the math isn't correct. It's the concept.

I'm interested in what you say about the price action of a dividend stock dropping when a dividend is paid. That's interesting. Seems like there would be no point in owning a dividend stock.

My daughter invested $3200 in MAIN exactly 2 years ago and the value now is $4181. ETRADE says her gain is 12.56%

Thats 30.65% increase by my calculation 3200 to 4181 . What am I missing?

Maybe the 12.56 is an annualized result. The numbers don't work out exactly, but maybe there was some dividend reinvestment that muddies it up or it's not exactly two years.

[Hog's Gone Fishin]

Originally Posted by Rain Man

Maybe the 12.56 is an annualized result. The numbers don't work out exactly, but maybe there was some dividend reinvestment that muddies it up or it's not exactly two years.

All the dividends were reinvested back into the stock to help it grow over time

Her initial purchase was 100 shares at 31.962 on 1/6/2021

So why don't they calculate the dividend reinvestment into the end result ??

STUPED computers!

[Rain Man]

Originally Posted by Hog's Gone Fishin

All the dividends were reinvested back into the stock to help it grow over time

Her initial purchase was 100 shares at 31.962 on 1/6/2021

So why don't they calculate the dividend reinvestment into the end result ??

STUPED computers!

Yeah, that's a pet peeve of mine. If you buy $1,000 of stock and it pays at 10% dividend and doesn't change in price, then reinvesting dividends will report that you have a return of 0% when it's really 10%.

[Miles]

Originally Posted by Rain Man

Yeah, that's a pet peeve of mine. If you buy $1,000 of stock and it pays at 10% dividend and doesn't change in price, then reinvesting dividends will report that you have a return of 0% when it's really 10%.

I suppose since you paid taxes on the dividends that were reinvested it’s technically not a gain. However, I have the same annoyance since I just want to be able to glance at my brokerage account and get a good picture of how much return I’ve had on my original investment.

[Hog's Gone Fishin]

What about SSSS It's near a 52 week low pays a qtly dividend at a rate of 11.37%

Has a "strong buy" rating and a PT nearly 100% above the current price

[Rain Man]

Originally Posted by Miles

I suppose since you paid taxes on the dividends that were reinvested it’s technically not a gain. However, I have the same annoyance since I just want to be able to glance at my brokerage account and get a good picture of how much return I’ve had on my original investment.

Yeah, that's a good point about taxes. So there's probably no perfect way that a brokerage could report it without knowing a lot of stuff about us that we don't want them to know.

It just seems like it should be a problem that's been solved, and it hasn't.

[lewdog]

Good reminder to pump those investment accounts in red years to gain a significant compounding interest advantage and savings for the future. These large red years don't happen as often as you think. It can be hard mentally for people to look at their account and see the decline. My passive investing into my 401k/IRA are down 19% from their all-time highs but I am looking to invest even further now as my gains for the future will be greater.

Hope this helps someone sock away a little more!

[Iconic]

my prediction: this year will suck more cock like last year

patience is key, probably won't see a real bottom till extremely late 23/early 24

[lewdog]

Originally Posted by Iconic

my prediction: this year will suck more cock like last year

patience is key, probably won't see a real bottom till extremely late 23/early 24

Market predictions are worse the KC Chiefs seasonal record prediction threads.

[Rain Man]

Originally Posted by lewdog

Market predictions are worse the KC Chiefs seasonal record prediction threads.

I saw an article the other day that said that the median error of stock forecasting by the major Wall Street firms was something like 8 percentage points. So that basically means that they're off by nearly the entire amount of the average annual return.

I'm liking 2023 so far. I was hoping that the market would do a reset at year end, and maybe we'll get that.

I do think that the market is trying to run a year ahead, so I think it'll be better than the news indicates if there's an expectation that 2024 will be back to normalcy. I'll bet that I'm right, plus or minus eight percentage points.

[Jenson71]

Yeah, for all the doomsday talk I've read . . . it's not a terrible start. At least, Apple hasn't gotten down to the level where I want pick it up at. Is below $100 asking too much?