SkyDiving - what do you keep your cash in? I've got emergency funds in a no-yielding savings account but like to generate income with whatever is left over. FWIW, I've got a mix of BND - Vanguard Total Bond Fund that yields about 3% and TPINX - Templeton Global Bond Fund that yields about 5% but has a large upfront fee.
This is getting ugly, made 5k currency trading this weekend
Anyone have any advice for how to play AAPL? It's basically gone up consistently without many major pullbacks. Part of me thinks it will just keep going and the other thinks this run up cannot be sustainable.
If you're in it now (are you?) good for you. I love AAPL and think that its growth potential is still very strong. Consumer Discretionary was also a sector that had major 'market perform' and 'outperform' ratings assigned to it by numerous firms a few weeks ago, so that's a comforting sight as well.Originally Posted by greekdeac2011
Without going into all of the technicals on AAPL or another equity, I will just say that sell stops are your friend. Layer in one sell stop that is 5% below the 20 day moving average, another sell stop that is 5% below the 50-day moving average and then another that is say 5% below the 200 day moving average (which admittedly is pretty low from where AAPL is today). Or if you're not willing to lose more than say 5-10%, put in a full sell stop or at least two sell stops below the 20 day moving average and sleep better at night. What brokerage firm are you dealing with?
Last edited by SkyDivingDeacon; 04-03-2012 at 10:29 PM.
Hmmmmm, do I reveal something that took me a really long time to find or not? Sorry, can't do it. It pays 4.1% (almost like a 401(k) Plan option called 'stable value') but it's essentially guaranteed insurance contracts that have been packaged into a neat little box that literally took me close to six months to find and tear apart and understand. Anyone can get their hands on it, but I'm willing to bet 99.9% of the people in my field, let alone the general public, know about it. I hope that doesn't sound pretentious, but it became a goal of mine to find a 'retail stable value fund' and I found it. Can't show you that card...
However, answer me this and then I'll maybe send you a PM: Why are you buying Templeton Global Bond A shares with a 4.25% up front charge? Dr. Hasenstab is brilliant and I love the fund, but just curious why you're settling with a large up front charge.
ETA: I do not put emergency cash, or even 'dry powder' cash inside a portfolio, in this 4.1% yielding investment. Cash is cash and unfortunately, it just doesn't pay anything right now. Even tiered cash accounts at a place like Morgan Stanley (where they theoretically lump in a very large amount of retail brokerage cash and shop for the best rates out there with say $100MM instead of say an individual's $1K) are yielding next to nothing.
Last edited by SkyDivingDeacon; 04-03-2012 at 08:26 PM.
I've been in it for quite some time, which is why I asked. I don't know how unlimited their growth potential is so I don't want to lose the healthy profits I already have in it, but I definitely don't want to sell it while it keeps running up.
Ha, ok. Sounds like it would be over my head anyway, but I'd be happy for a PM.
I got into TPINX after doing some cursory research on diversification options. Dipped my toe in it a couple years ago and, despite the initial fee, was comfortable with the investment so I've added to it. I assume other comparable funds charge similar fees. I'm not talking big dollars here.
Sky, I have about 80% in a mutual fund that I dont touch and about 20% in a Simple IRA. I've been fooling around with some stocks in the simple, but mostly ETFs, some gold, bonds. I do have let's call it 25% of the simple in individual stock picks. I did take profits about a month ago and was sitting on about 25-30% cash for most of March. Mostly because I feel like its going to pull back. I did move to get in to VXX and VIXY last week with some of the cash. I just noticed you mentioned those in this thread. Bascially, am I doing it wrong? I'm not an experienced investor, in case you haven't already realized. I'm 30 and have a mortgage. No kids. No other debt. I'm obviously willing to be exposed to some risk but am is it too much/too little?
ETA: I pretty much just want to know if I'm doing anything overly stupid.
Last edited by TwentyONE; 04-06-2012 at 12:29 PM.
How much initial capital do I need to start investing? Thoughts?
As much as you can afford
Great question. And I'm humbled that some of you have asked me for my opinion either via PM or out in the open. Thank you for that.
Anyhow, when you say that you were 25-30% cash for most of March, do you mean 25-30% cash for the portion that's allocated to the Simple IRA which is only 20% of your holdings? So in other words, 25-30% of a total 20% position/give or take, 6% of your total portfolio?
If VIXY or VXX is only a 6% position out of all of your holdings, I think that's fine. If it's 25-30% out of all of your holdings, that's way too much. However, I cannot lie. I have (as of this past Wednesday morning) roughly 7% in VIXY, 7% in UVXY and another 10-12% in TZA along with an enormous amount of puts expiring in September that I bought for dirt cheap over the past six-eight weeks. Can you tell I'm Bearish?
Also, one *major* difference between VXX and VIXY is that VXX is an ETN where as VIXY is an ETF. For many, many reasons I prefer ETF's to ETN's. And with structured products like this, (and other investments) something called Contango is a big concern and cannot be combated without a lot of nerve and patience.
Saying all of that, and knowing that there are a lot of issues/problems/inefficiencies/tracking error(s) with something like VIXY and UVXY, I still think it's a great diversifier for right now. I think watching a position each and every day can give you an ulcer, but something like UVXY and VIXY have to be monitored closely. If (and in my opinion, when) they both have a large increase (I mean really large, like +50% or more) I'm going to start to put sell stops on a couple of the blocks I have. I've seen things like this zoom all the way to the top and stay there for a day, and then drop 30% the following week. They're very volatile, so it won't be a pretty ride, but my conviction is strong that volatility will increase at some point soon, and there's no direct and easy way to invest directly with the CBOE-VIX. Instead, VIXY and UVXY will have to do for now, and I think they'll do well. So no, you're not doing anything wrong in my very humble opinion.
Also, a Simple IRA with access to ETF's and individual stocks is awesome. Who does the employer have it through, and what's the mutual fund with 80% of your cake in it?
Caturday is right. Depends on your situation and a lot of other things, but I say have six months of pure hard cash sitting in a savings account earning nothing before you start putting your milk money into volatile investments. Establish a good base of cash, and then put away whatever you can into some index funds or no load funds until you hit, say, $5,000-$10,000 and then go to someone who knows what they're doing.
Thanks Sky. Huge posrep. Check your PM.
This is my approach as well and the advice I've gotten from every financial planner I've ever spoken with.
And while we're at it, please every single one of you, go and buy an umbrella policy from your local property and casualty rep.
Two weeks ago, we (my client and I) got a verdict on a settlement that she had been in for close to a year. She was in an accident, going 56 in a 45, rear-ended a lady who consequently broke her collar bone and messed up her neck.
My client got sued for a lot of money, car insurance pitched in their part and then the remaining $2MM umbrella policy that I forced her to get two and a half years ago kicked in to cover the rest. She's a dentist and makes some nice bank, but she honestly could have lost a lot of her assets in the suit if she didn't have that coverage. Plaintiff was awarded $1.63 MM. Go buy one...now
Some people say a year, but I think that's overkill. Depending on the circumstances, though, I've had multiple people have close to two years of cash in the bank because of their job(s).
You're getting good advice, though. It's a good rule of thumb that is too often overlooked
You need two umbrella policies - one for auto and one for home, correct? I think ours run about $100/year for each.
Right now we have about a year's worth of cash based on our current (employed) spending levels and need to do something with a chunk of it. Looking into a couple of funds, though I may just be safe with it and put it into some of the same stocks I'm already in (or similar ones) that pay decent dividends. Can't decide.
mine from travellers is one policy but covers both i think.
Yeah, you only need one Umbrella policy. You generally have to up coverage on your underlying home and auto policies, but jack up the deductibles and cost-wise it more than likely will be a wash or maybe $100-$200 for the whole year.
Cannot tell you how many cases I have seen where someone has gotten sued for doing something stupid, or not knowing anything about it at all, (loose floor board on their back deck, for example) and not having wanted to pay $200 for the YEAR to cover themselves and their assets/net worth before the event happened. People are stupid. Don't be. Go buy one...
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