Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Rain Man]

Epic day today. I love days like today. It worked out well because I had a nearly unprecedented credit card bill this month, and I was still able to easily gain in net worth.

[Hog's Gone Fishin]

Oh Boy, these are going to be fun and Mike's excited!

[Buehler445]

Lots of red today. What's happening?

[Rain Man]

Originally Posted by Buehler445

Lots of red today. What's happening?

It seems like the market massively overreacts to every bit of news that points toward a slowdown.

I saw an article today where some random investment banker said, "This is a data-driven market right now," and I agree. Every day produces some random report that's a small part of the big picture, and every day the market acts like that random report is a revelation of the future.

[ChiliConCarnage]

Originally Posted by Rain Man

It seems like the market massively overreacts to every bit of news that points toward a slowdown.

I saw an article today where some random investment banker said, "This is a data-driven market right now," and I agree. Every day produces some random report that's a small part of the big picture, and every day the market acts like that random report is a revelation of the future.

I just think there's not much going on right now. We're up a lot. There's elections and we'll see if the economy holds up in the 4th q. Wait to see if AI starts to really make productivity boosts and profits for anyone not selling the hardware. I think that might take some time.

[Hog's Gone Fishin]

September is notoriously a bad month in the stock market for whatever reason.

Cash rules right now to buy those dips.


ZIVB and SVOL for the dividend plays look good

[lewdog]

Recession fears, rate cuts coming and job data that seems non-believable. When NVDA get crushed, so do other stocks/indexes.

Could see an actual needed correction this month.

[philfree]

Originally Posted by Rain Man

It seems like the market massively overreacts to every bit of news that points toward a slowdown.

I saw an article today where some random investment banker said, "This is a data-driven market right now," and I agree. Every day produces some random report that's a small part of the big picture, and every day the market acts like that random report is a revelation of the future.

How much of that reaction comes from the algorithms? I'm no expert but at this point I think the algorithms start the big selloffs. They'll pick up a headline and boom!

[Rain Man]

Originally Posted by philfree

How much of that reaction comes from the algorithms? I'm no expert but at this point I think the algorithms start the big selloffs. They'll pick up a headline and boom!

That's my theory, too. I think a lot of it is automated.

[Buehler445]

Originally Posted by philfree

How much of that reaction comes from the algorithms? I'm no expert but at this point I think the algorithms start the big selloffs. They'll pick up a headline and boom!

That's not new.

Even in the old world of brokers, you could put on stops, and a little price movement triggers your stops, then the next guys and the next guys, and a small movement gets exacerbated. Old futures traders still talk about "running stops".

I think "trading algorithms" that move any volume have gotten more refined.

But I could be wrong there.

[ChiliConCarnage]

Originally Posted by Buehler445

Interesting.

Financials don't look terrifying. Any idea why they ate shit so bad? I mean everything did, but almost 60% is a lot. Was it just their Q42023 sales decline?

Looks like a pretty good play to me.

Dropped another 12% today.

But around noon, management made an appearance at Barclays' 17th Annual Global Consumer Staples Conference. During the chat, management said something that sparked fear in investors: In the current quarter, sales to PepsiCo (NASDAQ: PEP) are down $100 million to $120 million compared to last year.

Investors took action, and that's why Celsius stock was down a painful 12% as of 3:15 p.m. ET.

Sounds like inventory was just stuffed and the brand is still doing really well. Expanding internationally is probably the next big step.

[ChiliConCarnage]

https://www.theverge.com/2024/9/17/2...lty-plea-fraud

Former MoviePass CEO admits the $9.95 ‘unlimited’ ticket scheme was fraud / The CEO behind 2017’s ridiculous movie deal is facing up to five years in prison for committing securities fraud.

This was the darling/it stock for a while.

[philfree]

So I'm 63 years old and I have a life insurance policy for $250,000.00 that's costing me $300.00 a month. Let's say I have over a $million with no mortgage or car payment. I going to live off dividends. I drained my insurance policy a couple time some years ago so there's only about $5,000.00 in it. I'm looking to cut my expenses so I'm thinking about cashing out my policy, paying some bills and lowering my expenses that $300.00 a month. With the value of my house and the money I have I think they'll be plenty to leave for the kids and If I were to die unexpectedly everything is covered for the wife so I'm thinking I don't need life insurance.

What does the Oracle that is Chiefs Planet think?

[Buehler445]

Originally Posted by philfree

So I'm 63 years old and I have a life insurance policy for $250,000.00 that's costing me $300.00 a month. Let's say I have over a $million with no mortgage or car payment. I going to live off dividends. I drained my insurance policy a couple time some years ago so there's only about $5,000.00 in it. I'm looking to cut my expenses so I'm thinking about cashing out my policy, paying some bills and lowering my expenses that $300.00 a month. With the value of my house and the money I have I think they'll be plenty to leave for the kids and If I were to die unexpectedly everything is covered for the wife so I'm thinking I don't need life insurance.

What does the Oracle that is Chiefs Planet think?

Most of the "will it be enough?" questions are way too dependent on you to answer.

If you're planning on living off dividends, that can be tricky depending on what you have. For instance if you have $1M in like VOO Which is an S&P index fund, that's only like 15K a year in dividends.

Something like JEPQ has a pretty big dividend which $1M would get you close to 90K (this year), but it has historically a negative dividend growth rate, so in future years you wouldn't be getting as much in dividends. Add in inflation, and you'd better be living well below that 90K a year and hanging onto the extra.

If you leave it in higher returning stocks, you can fund retirement through sales of your positions, which leaves much higher growth potential, but you're eating your capital. Most things I've read suggest a 4% withdrawl rate is pretty safe. At $1M that puts you at 40K a year.

Dave Ramsey says you're good to go at an 8% withdrawl rate, which is the historic return of the S&P (I think that's where he's getting that), meaning that your returns would replace what you take out, but in down years, I think that would substantially eat into capital, then when the market has positive returns you'd be dealing with a materially smaller capital position. I'd probably get jittery in a down year if I was taking 8% out.

I tried to do some modeling a year or so ago. I'm 41, so it's exacerbated, but trying to genuinely forecast what I'm going to need to have in 40 years is pretty tough. Like impossibly tough.

For instance, inflation over the long term is almost unfathomable. The fed after this recent fiasco is consistent that it wants to hit a 2% inflation number. Well, 40K compounded at 2% (presuming the fed hits their target perfectly) for 30 years (it's not unreasonable you'll live to 93) is $71,033. Now who knows how it will manifest itself, for instance TVs are way cheaper than they were 20 years ago, but protein is not. It's impossible to know how cost structures will look in the future, but throughout your retirement you won't be completely unaffected by inflation.

So to the "will it be enough?", I give you a hearty "**** if I know."

If the question is what would Buehler445 do?

Buehler445 would cash out the insurance, take that 300 and stick it in your brokerage to bolster it. All the better if you can take the 5K of cash value and put it in there too. You'd be dollar cost averaging that extra 300 into your plan and put yourself in a better position to live off the income and keep your capital intact if you're intending the residual value to act as life insurance proceeds.

The return on life insurance is pretty low. Last time I looked at any it was capitalizing at like 4% or something. While it is nice to think about your survivors getting a check, from a financial perspective, you're better off investing it yourself. Just make sure your beneficiaries are set right on your investment account and you'll end up in a better place, provided you can keep your capital intact.

Good luck. When I started pushing numbers out for retirement I got real uncomfortable real quick. I'm probably overly pessimistic, but my grandpa just passed and his rest home bill was almost 8K a month. Comparatively, in 08 when my other grandpa passed his rest home bill was like 2K a month so I was staring that down, and realizing that shit can get really out of control really quick while nobody is paying attention.

Hope all that rambling helps.

[philfree]

Originally Posted by Buehler445

Most of the "will it be enough?" questions are way too dependent on you to answer.

If you're planning on living off dividends, that can be tricky depending on what you have. For instance if you have $1M in like VOO Which is an S&P index fund, that's only like 15K a year in dividends.

Something like JEPQ has a pretty big dividend which $1M would get you close to 90K (this year), but it has historically a negative dividend growth rate, so in future years you wouldn't be getting as much in dividends. Add in inflation, and you'd better be living well below that 90K a year and hanging onto the extra.

If you leave it in higher returning stocks, you can fund retirement through sales of your positions, which leaves much higher growth potential, but you're eating your capital. Most things I've read suggest a 4% withdrawl rate is pretty safe. At $1M that puts you at 40K a year.

Dave Ramsey says you're good to go at an 8% withdrawl rate, which is the historic return of the S&P (I think that's where he's getting that), meaning that your returns would replace what you take out, but in down years, I think that would substantially eat into capital, then when the market has positive returns you'd be dealing with a materially smaller capital position. I'd probably get jittery in a down year if I was taking 8% out.

I tried to do some modeling a year or so ago. I'm 41, so it's exacerbated, but trying to genuinely forecast what I'm going to need to have in 40 years is pretty tough. Like impossibly tough.

For instance, inflation over the long term is almost unfathomable. The fed after this recent fiasco is consistent that it wants to hit a 2% inflation number. Well, 40K compounded at 2% (presuming the fed hits their target perfectly) for 30 years (it's not unreasonable you'll live to 93) is $71,033. Now who knows how it will manifest itself, for instance TVs are way cheaper than they were 20 years ago, but protein is not. It's impossible to know how cost structures will look in the future, but throughout your retirement you won't be completely unaffected by inflation.

So to the "will it be enough?", I give you a hearty "**** if I know."

If the question is what would Buehler445 do?

Buehler445 would cash out the insurance, take that 300 and stick it in your brokerage to bolster it. All the better if you can take the 5K of cash value and put it in there too. You'd be dollar cost averaging that extra 300 into your plan and put yourself in a better position to live off the income and keep your capital intact if you're intending the residual value to act as life insurance proceeds.

The return on life insurance is pretty low. Last time I looked at any it was capitalizing at like 4% or something. While it is nice to think about your survivors getting a check, from a financial perspective, you're better off investing it yourself. Just make sure your beneficiaries are set right on your investment account and you'll end up in a better place, provided you can keep your capital intact.

Good luck. When I started pushing numbers out for retirement I got real uncomfortable real quick. I'm probably overly pessimistic, but my grandpa just passed and his rest home bill was almost 8K a month. Comparatively, in 08 when my other grandpa passed his rest home bill was like 2K a month so I was staring that down, and realizing that shit can get really out of control really quick while nobody is paying attention.

Hope all that rambling helps.

That's quite the reply and I appreciate it. I have a wide range of investments that all pay pretty big dividends so this has been my plan for the last handful of years. I've been reinvesting up until recently so my money was growing at a decent rate. Some of it was tax exempt so that helps a little. I do have a financial advisor so he's been working with me on getting me plenty of money to live on. I just don't need to waste money and at this point Life Insurance for us seems a waste. I think I'll start saving that $300.00 a month.