Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Buehler445]

Originally Posted by scho63

I sold my AAPL calls, pushed out my peacock feathers and had my buddy tell me what a great trade and then I watched it go up another $80,000.

Just when you think you are real smart, the market smacks you in the face and tells you that you're not as smart as you think you are.

About the 3rd time in 5 years I left more than $50,000 on the table getting out early. It's a reflex action from so many times riding a quick winner longer than I should have and not only giving back large profits but losing all my principal.

I have a pretty quick trigger on everything that has market exposure. I've paid too much storage on grain that is ****ing TANKING. I'm like Pavlovs dogs at this point.

[lewdog]

Originally Posted by scho63

I made $26,700 in 3 days this week with APPL call options that I sold Thursday and Friday. I would have made another $80,000 if I didn't sell them so damn early. I bought 250 puts in AAPL that expire this Friday and think I may have a good Monday.

What size trade was that to start with? I am getting more into options and it's crazy how those premiums swing when VIX is high.

[scho63]

Originally Posted by lewdog

What size trade was that to start with? I am getting more into options and it's crazy how those premiums swing when VIX is high.

Right around $3,100 got me 200 calls that expired that Friday.. I bought in and averaged down. Then sold the $172.50's and moved up to the $175's. I took about $10k of profit out of the market and then reinvested just $2,250 for 150 calls for that Friday The $175's jump and pulled another $16k out and then went and bought 250 puts at $23 for a total of $5,750 for this Friday's expiration.

I normally don't invest that much in one option trade but I am using the markets money.

[lewdog]

Any options spread traders here? Seems like that may be a higher percentage play with a determined down side risk (nothing naked). You won't see the huge gainers but pretty common 10-20% without the infinite risk to the downside.

[scho63]

I can't believe the week I have had. Winner after winner, both calls and puts. The only negative is I left a LOT more money on the table by selling out early, close to $110,000 total of additional profits.

Best week of my option trading life. $35,711 banked profits.

I have 260 PUTS left as my only open position in SHOP (Shopify) for $65 strike that expire this Friday. Paid .15 ($15) and closed at .29 ($29)

The chart on SHOP looks real week and I just saw an article yesterday a day after I bought them about a lot of professional put buying on SHOP.

Hoping to see options hit $1 ($100) a contract.

[myselff77]

For you option traders, any advice how you got started and avoid anything stupid that pisses away your money?

Also, I assume any gains are getting taxed at the short term rate unless in something like a roth or does some other tax situation exist when trading options?

[UteChief]

I think it’s the 60/40 rule. I need to research as it’s been a while.

[lewdog]

Originally Posted by myselff77

For you option traders, any advice how you got started and avoid anything stupid that pisses away your money?

Also, I assume any gains are getting taxed at the short term rate unless in something like a roth or does some other tax situation exist when trading options?

There is no faster way to blow up an account than options trading.

What's your investing experience?

[Dunit35]

First off. I’m not a big investor. I have a separate police retirement growing but started a Roth IRA in December. I don’t put much in it, $100/every two weeks. I noticed it’s been dropping all week. Should I continue putting money in it or save my money since it’s tanking? I’m not negative yet but should be next week when this continues.

I only buy two mutual funds through Charles Schwab. SWTSX and SWISX. Mainly because I have no idea what I’m doing and just saw these on other forums.

[Rain Man]

Originally Posted by Dunit35

First off. I’m not a big investor. I have a separate police retirement growing but started a Roth IRA in December. I don’t put much in it, $100/every two weeks. I noticed it’s been dropping all week. Should I continue putting money in it or save my money since it’s tanking? I’m not negative yet but should be next week when this continues.

I only buy two mutual funds through Charles Schwab. SWTSX and SWISX. Mainly because I have no idea what I’m doing and just saw these on other forums.

If you're still in your working career, the accepted rule is that you keep putting money into it when it's going down. Eventually it'll go back up and you picked up some cheap shares. The concept is called dollar cost averaging.

We're all taking big hits this month. I have to adjust my mindset to know that it's just going to happen, and as long as I've got a system that lets me avoid selling during a pullback, I can soldier through it and it'll eventually go back up.

[lewdog]

Now is one of the better times to be buying. The market has been extended far too long and a healthy pullback and reset was due for equities.

[Buehler445]

Originally Posted by Dunit35

First off. I’m not a big investor. I have a separate police retirement growing but started a Roth IRA in December. I don’t put much in it, $100/every two weeks. I noticed it’s been dropping all week. Should I continue putting money in it or save my money since it’s tanking? I’m not negative yet but should be next week when this continues.

I only buy two mutual funds through Charles Schwab. SWTSX and SWISX. Mainly because I have no idea what I’m doing and just saw these on other forums.

Few things. You're doing the right thing.

I don't know what all you know, so if you already know it, accept my apologies.

What you have is a ROTH IRA. Understanding how it works impacts how you view it.

A ROTH IRA is a retirement account, meaning there are penalties if you pull it out before 59.5 years old That gives you a long term approach. The other component of ROTH that is important to know is that contributions go in after tax. Meaning you have paid tax on all contributions...BUT everything that comes out is tax free. So presuming there are capital gains, that is tax free. So the perspective to adopt here you are accumulating as many shares as possible because you have a long time for those shares to appreciate and capture the tax free gain.

Look up Dollar Cost Averaging. That prevents trying to time the market (and potentially being catestrophically wrong). Since you have time, I'd just buy it every 2 weeks and not even look at the balance. Just let it go.

Here is a 90 year graph of the S&P 500. At any point in history, if you have a 30 year time window, it will appreciate. Plus, if you're dollar cost averaging, you're buying more shares as the price goes down, so if it takes off, you're growing a bigger position. One way to think about it is when the market goes down, you're buying on sale. Same asset, cheaper price.



NOTE: I'm not licensed. I can't advise you, this is just what I'd do.

As far as the funds, I'm not a big International fund guy. There hasn't been a big time when International has outperformed American ones. But almost every fiduciary or CFP will tell you international is important to a diversified portfolio. They're probably correct. I just disagree.

I'm also a big S&P500 guy. But I ran a quick backtest of Schwabs S&P500 Index fund (SWPPX) to your SWTSX, and there isn't much of a difference so I think you're good there.

Backtest Link

If it's me (and it's not - it's very much you. We may have different risk tolerances), I'd switch it up a bit. What you have is about as diversified as you can be. Which is fine if that's what you're after. Since you have your pension, you have the base covered as essentially a risk free return, so I think you can be a little less conservative with your IRA. If it's me, I switch the funds up a little bit, and shoot for a little higher return and pull off some diversification. If it's my account I put 50% in SWPPX (S&P 500 Index Fund) and SCHG (Schwab Growth fund).

I ran a backtest on it, and the more aggressive approach yielded 4% better. Those haven't been around too long, so the test only goes back to 2010, so it doesn't look that much different, but it will over time as compounding happens.

Backtest link.

I feel pretty confident about the DCA comments, but probably less so about picking funds. I can be pretty wrong on that, but given what you described, this is what I'd do.

[scho63]

My SHOP options were a FLOP. Market took back some of my profits.

[ReynardMuldrake]

I just noticed my IRA has been quietly killing it this year. Up nearly 50% since Nov 1.

[Rain Man]

Originally Posted by ReynardMuldrake

I just noticed my IRA has been quietly killing it this year. Up nearly 50% since Nov 1.

Wow. What are you in?