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[QUOTE="Klbsa, post: 21102903, member: 220601"

One of the biggest transfers of wealth in history this next time around is going to be in crypto currency IMO.
Crypto is imaginary "money" even more so than the US Dollar, and that is saying something. Both are only numbers in a computer.
[/QUOTE]

Aye..... But I can change my crypto into US dollars with the click of a mouse...... and then turn those dollars into anything else no matter how real or imaginary you may think it is with another click of a mouse.

Gold is mostly valuable because people think it is too....... But I could turn my crypto into food, ammo or any other useful thing MUCH faster than I could with my gold.

If I can buy real things with it.... Its money

Speaking from experience
 

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most big name stocks have been overvalued based on traditional metrics for a five years particularly AAPL and TSLA...technophiles can't get enough though. People have been crying "bubble" for a long time, but I never seem to be amazed how big a bubble can get before it pops.
Apple's P/E ratio is 30. Their 10 year growth rate is like 12% annual. They may not continue to grow that fast, but if they do then they arent necessarily overvalued.
 

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Best wishes to those who are still in... my advice is to watch those markets like a hawk!

P.S. do not believe in Bitcoin, et al, but Blockchain has its merits. It's just not for me these days.
This is terrible advice. You should buy broad index funds and completely ignore the market. The biggest problem people have is they try to time the market and lose out on huge gains.

When I was younger I used to buy distressed stocks and that worked well, but I had to constantly pay attention to news and the market. These days I just have a few index funds and I check the market maybe once a week. A 30% correct could happen, but who cares.

The companies that make up the indices are still making money and over the long term that is what stocks are based on.

Individual investors have a huge advantage of hedge funds and other professional investors. We dont have to show a profit every quarter. This means that we dont need to get the timing right to make money. As a result we can buy into the market in general not pay attention and get the benefit of compounding - which hedge funds and other pros dont get.

Individual investors can have multi year time horizons which pros cannot have. We are playing a completely different game and what the pros do is just noise to long term investors. As the companies grow, the stocks that represent those companies grow in value.

Im way underweighted in stocks by accident, but as soon as I sell my company ill be more heavily weighted in stocks.

Im approximately
70% my business
15% real estate
10% cash
2.5% stocks
2.5% crypto (it increased a lot)

After I sell my company it will be something like

45% real estate
10% cash
40% stocks
5% crypto
 

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I am still in the market, but I over the last 18 months I have been making some significant shifts to a much more conservative posture designed to provide greater protection against a fall. Its coming down. Its only being kept afloat by the feds printing of ”free” money and the tremendous amount of cash in the market from all of those 401k/pension funds with no real alternatives that can provide short term gains, and bonuses to the people who manage them due to those gains.
 
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Discussion Starter · #45 ·
Its only being kept afloat by the feds printing of ”free” money and the tremendous amount of cash in the market from all of those 401k/pension funds with no real alternatives that can provide short term gains, and bonuses to the people who manage them due to those gains.
^^^ This has been my contention for a couple of years now. Money is going into the market because there's really no other place investor can get any real return. I don't know for sure, but I'm guessing the Fed is buying treasury debt because it's not selling that well, except maybe to foreign investors who still like the U.S. Dollar.

This all turns around when interest rates start to rise, which is inevitable. And that's another reason I'm pulling out of the market. Other investors will see that you can make some gain on treasuries and bonds and will shift their funds from the stock market to treasury debt.
 

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Yes, my Spidersense is tingling.

I am still in the market, but I over the last 18 months I have been making some significant shifts to a much more conservative posture designed to provide greater protection against a fall. ...
Same, I've gone from out of market (1/13/20, give or take) to back in, conservative, more conservative, out, balanced (now) and about to go back to conservative. Made a dent in retiring by getting out as soon as I saw China's reaction to the virus, then back in after we crashed our economy. Once my 90-day lockout on re-balance expires I'll do it again. Sad to see the stock market grow only as good as inflation these days... but I'm more interested in locking in gains than risking higher returns at this time. Too many variables, and this time around we wont get the obvious indicator (virus coming out of China).

With no commission apps where you can buy $1 worth of stock... It is opened to a whole new demographic. Get ready for a wild ride. As a side note... I wonder when lots of young people and less wealthy people have some money invested, will feeling change? Will they finally realize killing businesses with taxes and regulations affects more than just millionaire stick holders?
Young folks I know don't care about 401k and mutual funds, they're investing in individual stocks and cryptos.
 

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Index investing is a strategy that involves creating portfolios around a stock index, a benchmark, or a market average. The idea is that, since most fund managers fail to outperform the market, the optimal way to invest in a diversified portfolio is to track an index, such as the S&P 500 Index, while minimizing costs and fees. Index investing is often used synonymously with the term passive investing, but there are a handful of reasons why some people believe that the average investor should avoid index funds altogether:

1. Lack of Downside Protection
The stock market has proved to be a great investment in the long run, but over the years it has had its fair share of bumps and bruises. Investing in an index fund, such as one that tracks the S&P 500, will give you the upside when the market is doing well, but also leaves you completely vulnerable to the downside. Investors with heavy exposure to stock index funds can choose to hedge your exposure to the index by shorting S&P 500 futures contracts, or buying a put option against the index, but because these move in the exact opposite direction of each other, using them together could defeat the purpose of investing (it's a breakeven strategy). In most cases, hedging is only a temporary solution.

2. Lack of Reactive Ability
Index investing does not allow for advantageous behavior. If a stock becomes overvalued, it actually starts to carry more weight in the index. Unfortunately, this is just when astute investors would want to be lowering their portfolios' exposure to that stock. So even if you have a clear idea of a stock that is overvalued or undervalued, if you invest solely through an index, you will not be able to act on that knowledge.

3. No Control Over Holdings
Indexes are set portfolios. If an investor buys an index fund, they have no control over the individual holdings in the portfolio. You may have specific companies that you like and want to own, such as a favorite bank or food company that you have researched and want to buy. Similarly, in everyday life, you may have experiences that lead you believe that one company is markedly better than another; maybe it has better brands, management or customer service. As a result, you may want to invest in that company specifically and not in its peers. At the same time, you may have ill feelings toward other companies for moral or other personal reasons. For example, you may have issues with the way a company treats the environment or the products it makes. Your portfolio can be augmented by adding specific stocks you like, but the components of an index portion are out of your hands.

4. Limited Exposure to Different Strategies
There are countless strategies that investors have used with success; unfortunately, buying an index of the market may not give you access to a lot of these good ideas and strategies. Investing strategies can, at times, be combined to provide investors with better risk-adjusted returns. Index investing will give you diversification, but that can also be achieved with as few as 30 stocks, instead of the 500 stocks that the S&P 500 Index would track. If you conduct research, you may be able to find the best value stocks, the best growth stocks and the best stocks for other strategies. After you've done the research, you can combine them into a smaller, more targeted portfolio. You may be able to provide yourself with a better-positioned portfolio than the overall market, or one that's better suited to your personal goals and risk tolerances.

5. Dampened Personal Satisfaction
Finally, investing can be worrying and stressful, especially during times of market turmoil. Selecting certain stocks may leave you constantly checking quotes, and can keep you awake at night, but these situations will not be averted by investing in an index. You can still find yourself constantly checking on how the market is performing and being worried sick about the economic landscape. On top of this, you will lose the satisfaction and excitement of making good investments and being successful with your money.

The Bottom Line
There have been studies both in favor and against active management. Many managers perform worse than their comparative benchmarks, but that does not change the fact that there are exceptional managers who regularly outperform the market. Index investing has merit if you want to take a broad economic view, but there are many reasons why it's not always the best route to achieving your personal investing goals.


Key Takeaways:

Index investing is a popular investment strategy, but there are also reasons why some investors might want to avoid index funds.

While indexes may be low cost and diversified, they prevent seizing opportunities elsewhere.

Moreover, indexes do not provide protection from market corrections and crashes when an investor has a lot of exposure to stock index funds.

If the above appears within your investment / risk tolerances, then by all means follow the accountant's advice. Best of luck.
 
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