Ask HN: You have $300k in stocks. What would you do?
31 comments
This is terrible advice, major bank stocks have been stagnant for a decade
Two things: dividends, and significantly less covid-drop than all my other stocks.
I don't consider myself a brilliant trader (that would be Warren Buffet) but I do like a bit of the balance he preaches. Banks are indeed slow moving, but they are less likely to die away in today's rough and tumble.
Since everything is universally down right now since Covid became more of a reality than distant news, I'll happily leave a chunk of my money on shares that I know will still be worth something when I'm ready to exercise them. I have "play money" which I would refer to a pool of shares that wobble around insanely and generally make good for me, and a bunch on banks as a safe buffer. The dividends are automatically put back into shares on the bank, so I have now some fractional shares, too.
I bought the majority of my bank shares at the point I figured the banks "bottomed out" from the initial shock of Covid lockdown. I certainly wouldn't buy them when everyone is up since, as you have alluded to, it would take forever to profit on it then. Slow and steady wins that particular race. Volatile over a longer period of time is too risky if you want to "set it and forget it" and it'll make more money for you than simply leaving it in the bank.
I don't consider myself a brilliant trader (that would be Warren Buffet) but I do like a bit of the balance he preaches. Banks are indeed slow moving, but they are less likely to die away in today's rough and tumble.
Since everything is universally down right now since Covid became more of a reality than distant news, I'll happily leave a chunk of my money on shares that I know will still be worth something when I'm ready to exercise them. I have "play money" which I would refer to a pool of shares that wobble around insanely and generally make good for me, and a bunch on banks as a safe buffer. The dividends are automatically put back into shares on the bank, so I have now some fractional shares, too.
I bought the majority of my bank shares at the point I figured the banks "bottomed out" from the initial shock of Covid lockdown. I certainly wouldn't buy them when everyone is up since, as you have alluded to, it would take forever to profit on it then. Slow and steady wins that particular race. Volatile over a longer period of time is too risky if you want to "set it and forget it" and it'll make more money for you than simply leaving it in the bank.
Do you expect a once in a decade (and by some measurements, once in a lifetime) crash to happen twice in the same year, or several years from now? I don't doubt there will be a second wave - the US is by most accounts still mired in the first wave, but I suspect most people probably missed the boat on the "bottoming out" event. Stranger stuff has happened though. Interesting take.
It depends on if it can be considered one drop or two, and who decides. If you look at many of the stock crashes. There is an initial drop, followed by a recovery, and then a further drop.
This recovery seems strangely stable (to me) but from what I understand there has never been a government who has pumped this much money into the market in order to maintain the highs.
One thing to consider which I heard the other day. [paraphrasing] "Invest in the market in front of you, not the one you think should be." There are so many people saying "well the market would be lower if the fed hadn't printed so much money, etc etc" but you can't invest in the market where they didn't, so you have to look at where you are, what you think will happen and go from there.
This recovery seems strangely stable (to me) but from what I understand there has never been a government who has pumped this much money into the market in order to maintain the highs.
One thing to consider which I heard the other day. [paraphrasing] "Invest in the market in front of you, not the one you think should be." There are so many people saying "well the market would be lower if the fed hadn't printed so much money, etc etc" but you can't invest in the market where they didn't, so you have to look at where you are, what you think will happen and go from there.
Exactly this. And people doubting there could be a second wave are completely ignoring what happened with the Spanish Flu. Given how people are treating the current pandemic, I fully expect a repeat show of that historical period. So I'm preparing for that. And if it doesn't happen, ah well, at least the money I didn't sink into the market yet isn't lost - it's just stagnant for a few months.
I've been thinking about this "not lost - just stagnant" thing the last week, unfortunately, I don't think it's actually true. You are always losing or gaining depending on what you are comparing to. If the economy is measured by the market, then it costs you more to get in later, it's effectively the same as losing.
Sure, you may not be losing on purchasing power of staple goods, but on almost any scale where an investment is valuable, you are losing, unless you can get in at the net crash. Just a different perspective.
Sure, you may not be losing on purchasing power of staple goods, but on almost any scale where an investment is valuable, you are losing, unless you can get in at the net crash. Just a different perspective.
You might have noticed a whole lot of stocks dropped today. If I had my float money on some other stocks instead, they would have lost along with the rest. Instead, because it was liquid, I was able to buy at today's lows. Mainly today I bought more of some shares I already own because they were down a fair amount (bought pre-covid), and today's purchase made the loss a much smaller percent. Eventually the markets will rebound and I'll have a lot of money there and a much shorter route to green territory.
To avoid fees, I have to make 2 trades a quarter minimum. I consider those fees to be losses, even though they aren't terribly substantial. So there is also that incentive to keep a float and wait for good moments like today for buys. There's no reason to buy immediately just because I got paid today.
I'm not done for the day yet. But that's why I say stagnant and not lost. It's more than just the one-phrase simplification I originally posted, as I was just focusing on that one aspect of it.
To avoid fees, I have to make 2 trades a quarter minimum. I consider those fees to be losses, even though they aren't terribly substantial. So there is also that incentive to keep a float and wait for good moments like today for buys. There's no reason to buy immediately just because I got paid today.
I'm not done for the day yet. But that's why I say stagnant and not lost. It's more than just the one-phrase simplification I originally posted, as I was just focusing on that one aspect of it.
I’m going to assume this is a serious question, although if not serious go to r/wsb and have fun making Robinhood founders & Big Daddy Elon even more wealthy.
If it is I’d first look at your current positions and see if you owe any tax and how to minimize that. Then I would think about what goal you are investing for and what your risk tolerance is. This basically explains it http://www.simplestockinvesting.com/SP500-historical-real-to... Put it all into large cap index funds and/or international too and leave 30k for your cash emergency fund. Dollar cost average over the next year if you are worried about Covid related market instability.
This is what I did and I only have 1/2 the money you have but it will be enough to retire on when I’m ready barring unforeseen events.
If it is I’d first look at your current positions and see if you owe any tax and how to minimize that. Then I would think about what goal you are investing for and what your risk tolerance is. This basically explains it http://www.simplestockinvesting.com/SP500-historical-real-to... Put it all into large cap index funds and/or international too and leave 30k for your cash emergency fund. Dollar cost average over the next year if you are worried about Covid related market instability.
This is what I did and I only have 1/2 the money you have but it will be enough to retire on when I’m ready barring unforeseen events.
I would go to Reddit WSB pag and buy $3000 TSLA calls
This is hard to answer without more context. For example: where in the world do you live, do you have a family or other dependents, are you employed, if so what, do you have any other sources of income, how old are you, what is your tolerance for risk, what is your IQ & EQ level etc. A good financial advisor would take all of these things into account before giving advice.
That was kind of the point - getting some wild ass ideas :)
But for a bit more contexts. No kids, 36 years old, only dependent is my partner who also works but earns less.
I have a high paying job and a mortgage.
I appreciate I'm not giving a lot but indulge me :)
But for a bit more contexts. No kids, 36 years old, only dependent is my partner who also works but earns less.
I have a high paying job and a mortgage.
I appreciate I'm not giving a lot but indulge me :)
Sell covered calls.
October VIX calls
This is the best suggestion I see.
For myself, I see high inflation coming from governments printing money. I am heavily levered into real estate, and have put options on 2 year out TLT puts.
For myself, I see high inflation coming from governments printing money. I am heavily levered into real estate, and have put options on 2 year out TLT puts.
Real estate seems like a great asset type for the next decade. CPI isn't going to move as much as it should. With low interest rates and the gov buying bonds, equities are going to see inflation. I think real estate will go up, especially since there is a recent jump in the number of people moving out of the cities. I would love to buy land, but I have to do some WSB style trading to get that kind of capital.
I'm heavy in VIX calls (28, 30, 32.50), DIS puts (I think they should drop back to $110 for a bit, but maybe I'm stupid), and some SPY puts (310). I plan to buy 2 year SPY calls (400 and 425) on the next dip since equities should continue to inflate due to interest being so low.
I'm heavy in VIX calls (28, 30, 32.50), DIS puts (I think they should drop back to $110 for a bit, but maybe I'm stupid), and some SPY puts (310). I plan to buy 2 year SPY calls (400 and 425) on the next dip since equities should continue to inflate due to interest being so low.
Why not write a bunch of OTM VIX puts? This way if volatility spikes in October you get to hang on to the premium . If you end up being wrong about October but you think things are going to get a little bit crazy going into the US presidential election you can take delivery of the contract and profit when volatility ramps up.
Sell stocks and:
- invest into overseas quality real estate.
- buy physical gold.
- invest on cryptos.
In that order.
We need to protect assets from potential inflation, likelyhood of high taxes and overall instability caused by politics and social unrest.
Basically my (untraditional approach) is DO NOT keep any liqud assets in USA. In addition - leverage low interest rates and mortgage the hell out of your real estate assets and do the above.
If inflation will hit - let bank have a problems, not you.
- invest into overseas quality real estate.
- buy physical gold.
- invest on cryptos.
In that order.
We need to protect assets from potential inflation, likelyhood of high taxes and overall instability caused by politics and social unrest.
Basically my (untraditional approach) is DO NOT keep any liqud assets in USA. In addition - leverage low interest rates and mortgage the hell out of your real estate assets and do the above.
If inflation will hit - let bank have a problems, not you.
Trade options. Hold TSLA/AAPL. In essence continue doing what I have been doing.
The market looks fine right now but after today we may chop a bit.
The market looks fine right now but after today we may chop a bit.
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What is your allocation?
Do you want more risk or less risk now?
I'm worried about inflation and considering starting a business. So I'm looking at inflation hedges that are still pretty liquid.
If you don't need liquidity fast you might want to buy real estate to ward off inflation.
Do you want more risk or less risk now?
I'm worried about inflation and considering starting a business. So I'm looking at inflation hedges that are still pretty liquid.
If you don't need liquidity fast you might want to buy real estate to ward off inflation.
FAANG Stocks. Dont over think it
I guess I'm old school for here, just VTI.
Index fund for most. “Rule #1 investing” for a smaller portion. Also consider rental properties depending on your total portfolio.
I would write far out of the money puts on TSLA. Look at the options chain! If you were to sell 1 put on TSLA with a strike price of $1200 and maturity date of 7/24 you would collect $780! That means that if TSLA doesn't drop from 1600 to 1200 by Friday you get to keep that $780! Only issue is you need to put up ~120k in collateral
If that was all the money to my name I’d put 10% in bitcoin, 40% in large-cap leading tech stocks (Apple, Microsoft, etc.), and 50% in cash in a bank.
If it was $300k I could afford to lose, I’d put it all in income-producing assets like rental properties or private equity.
If it was $300k I could afford to lose, I’d put it all in income-producing assets like rental properties or private equity.
What terrible advice in this thread - bitcoin, single stock/industry portfolios, gold, overseas real estate, option trading etc are all highly risky investments.
I suggest to read "The Elements of Investing". It's a quick read and will help you have a broader (and more sane) perspective.
But in general, ensure sufficient diversification and time horizon, then add more over time. If you're all in one stock - diversify asap.
I suggest to read "The Elements of Investing". It's a quick read and will help you have a broader (and more sane) perspective.
But in general, ensure sufficient diversification and time horizon, then add more over time. If you're all in one stock - diversify asap.
Why not just pay down your mortgage? You’ll get 3-4% risk and tax free where else are you gonna get that kind of guarantee?
Sell all stock, save enough to cover taxes, then buy a tiny plot of land with access to water and electricity. I will build and live in a yurt while I plan my next move.
Yes, I realize the markets are kinda doing well right now if you completely ignore how much they dropped earlier this year. But if we get a second wave (and we very most likely will) consumer confidence will go through the floor and take the market along with it. That's the bottoming out I'm expecting to happen, and am preparing to take advantage of.
I'm doing pretty much this exactly right now. A lot of my cash that could be on stocks is sitting there waiting for that bottom side. All my current trades are with money that's already in the market.