General Category > Economy/Business
Investment Tips Thread
IsailedawayfromFR:
Good suggestions @catfish1957 I believe we are much alike.
I did not see the word 'diversification' anywhere, other than to build a conservative base and then speculate with a solid foundation, and would like to suggest that diversification is paramount
I initially had almost all investments in mutual funds as it was easier. When I was able to have more time available, I did my own research and changed mostly to individual stocks as it gave me more freedom, had improved tax effects, and zeroed out the charges mutual funds charged every year.
For myself, I place any stock investments into about 10 major categories. I also emphasize tangible assets like real estate, commodities and the like, as when times get tough, they retain at least some value to fall back on rather than simply a phantom enterprise value aka Enron.
My own portfolio shies away from tech companies as for me they are more difficult to understand how value is obtained compared to say Exxon or Johnson and Johnson. Tech companies rely more on stock price growth rather than paying dividends and to me that causes more fluctuations in long-term value. In retirement, I love dividends.
The best investments for normal folks are ones kept a minimum of five years but ideally ten or more years. These requires companies with longevity and a track record. Track records do not always make it as attested by GE, Xerox and the like, but certainly gives more comfort into the future.
One thing I have difficulty with is checking the investments only periodically. To do so often makes one make bad decisions based more on what is happening now rather than the basic premises of why one bought the stock in the first place. I can attest to several spur-of-the-moment decisions I made which I later regretted.
After retirement, I have also found a significant issue not considered earlier was the impact of holding most of one's investments in pre-tax holdings rather than holdings where Uncle Sam has already been paid. The balancing of how to distribute needed retirement income from both sources is a delicate issue that can have large tax implications as well as Medicare premiums changes.
For me personally, I shy away from government promises about future tax implications as these can change at the whim of government at any time. Roth IRAs with the promise of tax free withdrawals after five years is to me risky, although I understand why a lot of people do it.
Years ago I obtained and read the book "The Intelligent Investor" by Benjamin Graham written in 1949. Graham was heralded as Buffett's mentor and Warren says it is the best financial book of all time as its advice is timeless. I suggest anyone considering investments to take a look at it.
Bigun:
My wife and I are at an age now where preserving what we have has become more of a priority than it was twenty years ago and that task is becoming increasingly difficult given the current state of our country's "leadership".
catfish1957:
--- Quote from: Bigun on February 08, 2022, 10:17:18 pm ---My wife and I are at an age now where preserving what we have has become more of a priority than it was twenty years ago and that task is becoming increasingly difficult given the current state of our country's "leadership".
--- End quote ---
In ever significant downturn retirees and the elderly do suffer the most on the balance sheet, for the simple reason that the elderly have to invest conservatively which systematically hurts gains, and ROI. They just can't risk their capital base.
This is one of the biggest quandaries of all, and really the only rememdy is making sure you overshoot your goals for minimum needs.
Even with that I am at about 5X that base capital need and returns right now, and I still don't feel safe with Pedo Joe and his clown car running the economic show. I hope other Briefers have suggestions. Most fixed income instrument are in negative territory with Bidenflation, and that does not look like it is going to relent..... anytime soon.
But one i used to tell people who ask me how to reach retirement goals...... I said "Save until it hurts, then keep hurting till you feel your goals and needs are met with plenty of room to spare."
Bigun:
--- Quote from: catfish1957 on February 08, 2022, 10:34:07 pm ---In ever significant downturn retirees and the elderly do suffer the most on the balance sheet, for the simple reason that the elderly have to invest conservatively which systematically hurts gains, and ROI. They just can't risk their capital base.
This is one of the biggest quandaries of all, and really the only rememdy is making sure you overshoot your goals for minimum needs.
Even with that I am at about 5X that base capital need and returns right now, and I still don't feel safe with Pedo Joe and his clown car running the economic show. I hope other Briefers have suggestions. Most fixed income instrument are in negative territory with Bidenflation, and that does not look like it is going to relent..... anytime soon.
But one i used to tell people who ask me how to reach retirement goals...... I said "Save until it hurts, then keep hurting till you feel your goals and needs are met with plenty of room to spare."
--- End quote ---
I'm not even remotely playing in the same league with Warren Buffett but considering where we started from - with neither pot nor window - we've done alright for ourselves so far.
Having a son who works for a major bank doesn't hurt either. @catfish1957
IsailedawayfromFR:
As an example of keeping diversification in mind, my oil stocks have hit ridiculously high levels and I had to sell off some Chevron stock to keep it from being too much of my portfolio.
The good news is I made a lot of profit per share (over $100).
The bad news is I will be paying a lot in taxes next year.
I also have to find a replacement stock to buy which pays lucrative and reliable dividends.
It is a good problem to have compared to the alternative in reverse.
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