| oceanMDX |
Prospects for the market look fairly good for 2004, but what to invest in? Many people don't have the time to follow individual stocks, so knowing the best time to sell can be difficult. Too many mutual fund managers have been taking advantage of their position so I'd rather put my money elsewhere. Fees can also be too high with some mutual funds. So what's the answer? Have you looked into ETFs (exchange traded funds)? Generally, the fees associated with them are relatively low, and you can buy ones that track one particular sector. One very popular ETF is DIA (aka Diamonds). It tracks the Dow Jones Industrial Average, and is very liquid. You can short ETFs and you are exempted from the uptick rule. http://www.amex.com/?href=/etf/prod...duct_Symbol=DIA
The market appears to be undergoing a rotation: http://biz.yahoo.com/bizwk/031219/b3864603_1.html
For 2004, you'll want to look beyond the many technology equities and small- and micro-cap stocks with lower quality earnings that have been hands-down winners this year. According to a study by Richard Bernstein, chief U.S. and quantitative strategist at Merrill Lynch & Co (NYSE:MER - News)., shares of lower-quality companies that lost money over the past decade were up 33% for the year through Nov. 25, beating the 22% gain of top-rated companies whose earnings rose. The catch is that many of these stocks are now overpriced. That's why many experts now favor large caps with solid earnings that have been trading at a discount to the market. Consider energy stocks. "Energy earnings have been phenomenal, but (the group's) performance is the second-worst among 10 sectors," says Bernstein.
If Bernstein is correct you may want to own some Diamonds (DIA)
and an ETF that tracks energy stocks - one like "The Energy Select Sector SPDR" (symbol XLE). http://www.amex.com/?href=/etf/prod...duct_Symbol=XLE
Click on the "Tear Sheet" button (upper right) for an abstract.
What do you think? What are you investing in? I think I'll buy XLE on Monday. I already have lots of DIA. |
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| DaleB |
One needs to develop stratagies away from 'too many' mutual funds these days. Those are interesting alternatives you are referencing.
Even my IRA investment broker, knowing I am going for a real estate license to 'dabble' in, suggested I look at commercial property investemnts, since I live in an area with tremendous growth.
We tend to invest by 'remote control' with very little knowledge other than what a broker may reveal or the standard prospectus.
One should also look around their own locale, there could be potential you never considered. Plus, something you can have greater control over, as well as an understanding of how it works.
Just a thought. Be creative but cautious, when putting your money to work. |
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| oceanMDX |
| Good comments DaleB... You're right it's best to have more control over your investments, that way, you'll also have a better understanding of what's going on. My issue, is that I'm too lazy to get involved with direct ownership in commercial real estate. :( |
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| DaleB |
quote:
Originally posted by oceanMDX
Good comments DaleB... You're right it's best to have more control over your investments, that way, you'll also have a better understanding of what's going on. My issue, is that I'm too lazy to get involved with direct ownership in commercial real estate. :(
I can appreciate that. I could not have done it before I was retired. Not to say how involved I am willing to get into it now. Time will tell! |
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| oceanMDX |
| After I retired 9 years ago - at the age of 40 yr. - that's when I really got lazy. :o |
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| DaleB |
quote:
Originally posted by oceanMDX
After I retired 9 years ago - at the age of 40 yr. - is when I really got lazy. :o
That's young, and it is a constant battle. But enjoying life is not to be taken too lightly! |
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| laborlitigator |
quote:
Originally posted by oceanMDX
After I retired 9 years ago - at the age of 40 yr.
OceanMDX,
If you don't mind me picking your brain, how'd you do it? |
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| oceanMDX |
quote:
Originally posted by laborlitigator
OceanMDX,
If you don't mind me picking your brain, how'd you do it?
I was ambitious and had a goal LL. After I graduated from the University of Waterloo in '79 with an OD degree (optometry), I really went to work. By the way, I paid my own way through University - I would work 7 days/week through each summer (factory shift work). Any debt (home mortgage, car loan) was paid off as quickly as possible, then I invested extra money in the stock market - but 95 % of the money I made was in my practice. It also helped that I was on the frugal side when it came to spending. I didn't have much time to spend money since I was working most of the time. As soon as I saw changing trends in my profession, I would make the necessary changes to stay up-to-date.
In '94 I sold my practice for a very good price then retired 6 months later. I've never received any inheritance money.
Since retiring I've lived on Paradise Island in the Bahamas, Daytona Beach Shores, La Jolla (CA), Las Vegas, and Cabo San Lucas. Basically, life is a beach. :1:
My investments have mainly been in the stock market because I'm too lazy to invest in much else. :o |
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| laborlitigator |
quote:
Originally posted by oceanMDX
I was ambitious and had a goal LL. After I graduated from the University of Waterloo in '79 with an OD degree (optometry), I really went to work. By the way, I paid my own way through University - I would work 7 days/week through each summer (factory shift work). Any debt (home mortgage, car loan) was paid off as quickly as possible, then I invested extra money in the stock market - but 95 % of the money I made was in my practice. It also helped that I was on the frugal side when it came to spending. I didn't have much time to spend money since I was working most of the time. As soon as I saw changing trends in my profession, I would make the necessary changes to stay up-to-date.
In '94 I sold my practice for a very good price then retired 6 months later. I've never received any inheritance money.
Since retiring I've lived on Paradise Island in the Bahamas, Daytona Beach Shores, La Jolla (CA), Las Vegas, and Cabo San Lucas. Basically, life is a beach. :1:
My investments have mainly been in the stock market because I'm too lazy to invest in much else. :o
Excellent. Now I have something to strive for. Retirement by 40's my goal too but the thing is I've got 2 girls to put through college. So maybe 50 is more realistic.
But didn't you get hurt by the decline in the market around Jan 01? |
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| oceanMDX |
quote:
Originally posted by laborlitigator
Excellent. Now I have something to strive for. Retirement by 40's my goal too but the thing is I've got 2 girls to put through college. So maybe 50 is more realistic.
But didn't you get hurt by the decline in the market around Jan 01?
No $hit, I lost just under $6 million US - I'm talking about after tax dollars here. :1pat:
It hasn't changed my lifestyle though. :) I made a lot of money, and I lost a lot too.
Um... Warning: before investing do your own research! :19: |
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| renov8r |
I have been a "investor" since I was in high school. I was very fortunate to have a dad who made extremely conservative investments, but he was willing to let me learn "the hard way" with small amounts. If I was more ambitious/huckersterish I could write a book...
Over short periods of time (maybe as long as 5 years or so) individual stocks & funds can have STELLAR returns, then they either start to behave like an index themselves (largely because their marketcap becomes so large, but also because they are no longer "entrepreneurial") and they go POOF (due to malfeasance {enron}, shifting market conditions, or the"insiders" leaving for the 'next, next big thing'...
It is hard to argue with the fact that an index fund will give you great upside potential while limiting the negatives that OFTEN hit any individual company. Sure, you won't have those very encouraging "runups" that can mean an IPO investor in MSFT is now a millionaire, but that really isn't investing -- it's gambling.
OK, so that leaves one to simply "pick an index" -- basically I feel that one can simply stick to one of the 'majors' -- traditionally the S&P 500 is the least 'volatile' it won't move fast to good or bad times; the old line DJIA tends to be only slightly more volatile , but the sheer size of the companies makes it a poor choice for passive investors ; the smaller AMEX index is a bit more volatile, but lately seems to have more upside , the consensus seems to be that truly unhealthy 'second tier' companies (that have been the mainstay of the AMEX ) are ripe for take-over and healthy ones have figured out how to been "lean & competitive"; that leaves the 'exciting' and tech-heavy NASDAQ , while certainly far more volatile than any any other broad index the potential for IPO-like returns makes the index attractive -- it may be suitable for 'semi-passive' investors, the kind of person who will re-balance their investments at least yearly (but if you don't you can get whacked -- hard , wish I'd remembered that about two years ago!)and if one can remain un-emotional and take profits off the table without fear that "there is more room to before the top" it is almost ideal...
Lately, with my daughter just having turned two and my son at 6 months, we are much, much more concerned with planning for their future than thinking about when we can retire... (and for the first time in memory having to be tight fisted).
I just saved you from thumbing through 500 pages of stuff in the "Investing"section of Amazon that says pretty much the same thing. |
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| oceanMDX |
You can easily invest in the S&P500 using "SPY" - which trades like a single stock, but is comprised of 500 stocks. The "management fees" associated with "SPY" (that's the symbol) are very low. These are called "spydrs".
As I said before, you can invest in all 30 stocks in the Dow Jones Industrial Average simply by buying "diamonds" (symbol "DIA") - the "management fees" associated with owning "diamonds" are also very low.
Mutual funds tend to have much higher fees associated with them - so on average, over time they have to be poorer investments.
The only thing that I would take issue with what you said regards which has been the more volatile. You may have been referring to a different time frame, but over the last 5-year-period, the S&P 500 has been more volatile than the DJIA. I also feel that they (companies in the DJIA) are a relatively safe (for stocks) investment because of their huge size - particularly when purchased in the form of "diamonds". Of course, stocks really aren't "safe" to begin with - I'm only speaking in relative terms to other smaller companies.
http://finance.yahoo.com/q/bc?s=SPY...n&z=m&q=l&c=dia |
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| renov8r |
When I typed "less" I meant "more" -- of course the SPY is more volatile than the DIA! Either makes a great "long haul' investment, with the about the lowest fees possible, so more of your dollars are working for you (or your kids) & not some "investment firm"...
Although many folks think they are "archiac", fixed intrest investments are something that I bet ocean must rely on. My dad sold his business in 1976 for a realitively small sum, he put most of the proceeds into Treasuries -- my mom has been well taken for 27 years! |
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| oceanMDX |
It looks like someone agrees with me on XLE:
“Our chart this week shows the weekly closes of the Amex listed (XLE) Select Sector SPDR-Energy exchange traded fund plotted above the Amex listed (XLK) Select Sector SPDR-Technology exchange traded fund.
The XLE is a basket of large energy stocks and the XLK is a basket of large information technology stocks.
The 12-month October 2002-03 gain of the energy unit was about 11 per cent, while the 12-month October 2002-03 gain of the technology unit has been a hot 63 per cent.
We may now have a rotation opportunity on our hands. Note the recent greater strength of the energy unit relative to the recent strength of the technology units.
The Ned Davis study supports the asset shift from technology to energy. In the last six election years, energy gained 32.2 per cent and technology returned 7.6 per cent.
This obscure rule is a keeper so don't pass it around”.
http://www.thestar.com/NASApp/cs/Co...ol=968705923364 |
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| XStatic |
| Has anyone heard of or participated in a training from INVESTools Investor Education? Their training and web site resources are also branded by BusinessWeek and CNBC. |
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