Talking stocks, trading, and investing in general

[UnFacconable]

I have some money to deploy but very concerned about a serious connection looming with the interest rate hike and general private company over-unicornification filtering its way into the public markets. The research says that I should go lump sum and invest now but it also shows that 1/3 of the time you're better off dollar cost averaging and given all the indicators my gut is telling me this is more than 1/3 likely to be a better time to DCA.

What do you all think? If you had a material (to you) amount to invest right now, would you go lump sum now or would you trickle it into the market over the next 12-18 months? I'm only looking at the broader market and not temporal factors relating to individual stocks. I'm likely to invest almost exclusively in index funds (possibly just vanguard total market) because I'm prohibited from investing in a lot of the high performing stocks due to family relationships (not worth going into but sufficed to say, it's become quite a hassle to figure out what I can invest in and not worth tracking any more).

 

[brokencycle]

Confirmed.
Not sure what "perceived convenience" is. Room for reasonable disagreement of course on how to value that, but ordering a bulk package of tp or paper towels off Amazon, having it show up on my doorstep the next day, and then being set for a month or two is a concrete comvenience for me.

Or go to Sam's once and have it for a year and pay less than Amazon.

I can see the arguments against Walmart's long term value, but I think Target is in far more trouble. They are a middle ground. They're not much more convenient than Walmart (though they are perceived that way). Walmart has more international presence than Target and seemingly better supply chain and ability to minimize their costs. What is Target's value add other than being cleaner than Walmart and not getting as much blowback for the exact same business practices?

 

[guyver00]



I have some money to deploy but very concerned about a serious connection looming with the interest rate hike and general private company over-unicornification filtering its way into the public markets. The research says that I should go lump sum and invest now but it also shows that 1/3 of the time you're better off dollar cost averaging and given all the indicators my gut is telling me this is more than 1/3 likely to be a better time to DCA.

What do you all think? If you had a material (to you) amount to invest right now, would you go lump sum now or would you trickle it into the market over the next 12-18 months? I'm only looking at the broader market and not temporal factors relating to individual stocks. I'm likely to invest almost exclusively in index funds (possibly just vanguard total market) because I'm prohibited from investing in a lot of the high performing stocks due to family relationships (not worth going into but sufficed to say, it's become quite a hassle to figure out what I can invest in and not worth tracking any more).

Lump sum is better than DCA 2 out of 3, and that's based on statistics and past history. Your gut feeling is based on...your gut feeling, whether that's greed or fear. The advantage of DCA is that if the market tanks soon after you start your investing, you're more likely to feel better and stick to your investment goal.

But as studies have shown, on average market trend up 2 out of 3, so it is always more favorable to go lump sum. It's like a bet, if you know, on average, you will win 2 out of 3, wouldn't you want to keep playing?

On a personal note, I put a 6 figures amount into my portfolio Sept 2014, and I'm happy I did that. Will I do so again? Absolutely.

 

[jbarwick]

I have some money to deploy but very concerned about a serious connection looming with the interest rate hike and general private company over-unicornification filtering its way into the public markets. The research says that I should go lump sum and invest now but it also shows that 1/3 of the time you're better off dollar cost averaging and given all the indicators my gut is telling me this is more than 1/3 likely to be a better time to DCA.

What do you all think? If you had a material (to you) amount to invest right now, would you go lump sum now or would you trickle it into the market over the next 12-18 months? I'm only looking at the broader market and not temporal factors relating to individual stocks. I'm likely to invest almost exclusively in index funds (possibly just vanguard total market) because I'm prohibited from investing in a lot of the high performing stocks due to family relationships (not worth going into but sufficed to say, it's become quite a hassle to figure out what I can invest in and not worth tracking any more).

I don't know what material is to you but Vanguard funds for the most part need at least $3,000 initially for the investor shares or $10,000 for Admiral Shares which have a lower expense ratio. If you want to DCA then go ahead. You could always speed up the process and buy dips or put more in if you think the market will starting booming for whatever reason. It is your choice.

As for single stock investing, usually there are only issues when a direct decedent (Grandparent>Parent>Offspring) or sibling is in a influencing role within the organization so they would have to be senior management or directors.

 

[Concordia]



As for single stock investing, usually there are only issues when a direct decedent (Grandparent>Parent>Offspring) or sibling is in a influencing role within the organization so they would have to be senior management or directors.

Not necessarily. At my last job, we had to report any single-stock purchases. Normally not a big deal, but one of my colleagues had a husband who ran a hedge fund and she had to file reports on HIS trades as well, which turned out to be a full-time job by itself. Which doesn't sound quite like this guy's problem, but there are funny things that can happen.

 

[lawyerdad]



Or go to Sam's once and have it for a year and pay less than Amazon.

I can see the arguments against Walmart's long term value, but I think Target is in far more trouble.  They are a middle ground.  They're not much more convenient than Walmart (though they are perceived that way).  Walmart has more international presence than Target and seemingly better supply chain and ability to minimize their costs.  What is Target's value add other than being cleaner than Walmart and not getting as much blowback for the exact same business practices?

You (obviously) don't live in LA. Nearest Sam's Club is like 15 miles away. Walmart probably the same. More to the point, either is probably an obnoxious several hour roundtrip in LA traffic once you factor in weekend traffic, parking, dealing with the lines, etc. There's a Costco slightly closer, but it's also a pain ********** traffic/parking wise. Even when I lived 3-4 blocks away I couldn't stand to go. I'm not a patient person, I hate navigating parking lots full of idiotic drivers, and I've got lots of stuff I'd rather do on a weekend or in the evening. So yeah, clicking a button on my phone or computer while I'm on a conference call and having the stuff appear on my doorstep is worth it to me. I'm the FatWallet dudes could tell me to the penny how much less they pay for toilet paper in a year buying pallets of open-box single-ply from the toiletries outlet store an two hours' drive from their homes. They're welcome to those bragging rights.

 

[UnFacconable]



But as studies have shown, on average market trend up 2 out of 3, so it is always more favorable to go lump sum. It's like a bet, if you know, on average, you will win 2 out of 3, wouldn't you want to keep playing?

I wouldn't say it's always more favorable but I agree with what you are saying. I think losing 10-20% off the bat would disappoint me more than losing 10-20% of upside so this is largely a psychological determination. Being honest with myself, this is probably the best reason to DCA.

You could always speed up the process and buy dips or put more in if you think the market will starting booming for whatever reason. It is your choice.

As for single stock investing, usually there are only issues when a direct decedent (Grandparent>Parent>Offspring) or sibling is in a influencing role within the organization so they would have to be senior management or directors.

I would be admiral shares so no issues there - actually I also have some Vanguard ETFs purchased commission free from my brokerage and I believe those are equivalent of admiral shares but I created a taxable account specifically to invest this money so I would be purchasing mutual funds straight from the source in this case. Vanguard automatically bumps you up to admiral shares when you pass the threshold ($10k for most funds but some are still $50k like the California muni bond fund that I may be interested in if not for the rate hike concerns) so the investor/admiral share issue is largely short term and small dollar - I think quite literally around $10 per year per fund max.

Not necessarily. At my last job, we had to report any single-stock purchases. Normally not a big deal, but one of my colleagues had a husband who ran a hedge fund and she had to file reports on HIS trades as well, which turned out to be a full-time job by itself. Which doesn't sound quite like this guy's problem, but there are funny things that can happen.

Yes, pretty much this.

 

[brokencycle]

You (obviously) don't live in LA. Nearest Sam's Club is like 15 miles away. Walmart probably the same. More to the point, either is probably an obnoxious several hour roundtrip in LA traffic once you factor in weekend traffic, parking, dealing with the lines, etc. There's a Costco slightly closer, but it's also a pain ********** traffic/parking wise. Even when I lived 3-4 blocks away I couldn't stand to go. I'm not a patient person, I hate navigating parking lots full of idiotic drivers, and I've got lots of stuff I'd rather do on a weekend or in the evening. So yeah, clicking a button on my phone or computer while I'm on a conference call and having the stuff appear on my doorstep is worth it to me. I'm the FatWallet dudes could tell me to the penny how much less they pay for toilet paper in a year buying pallets of open-box single-ply from the toiletries outlet store an two hours' drive from their homes. They're welcome to those bragging rights.

This is tangential to my point. I should have put a wink after my first sentence. My point is that there is a continuum of what people are willing to pay for convenience. If two stores are similarly convenient (eg. Walmart and Target), what advantage does the more expensive one have when there is a slightly more expensive one that is even more convenient? I just see that Target is more risky in the long term over Walmart - I think Walmart is better positioned to weather the storm - which is why you see Target doing all of these online promotions for basics (it seems every week there is a slickdeals front page ad for soap or toilet paper or whatever at Target by ordering online).

Then again, I live in the land of Target koolaid, so I may just be a contrarian.

 

[jbarwick]

That's interesting you guys have to report single stock purchases. I assume a very different industry than any I have worked in before.

 

[lawyerdad]



This is tangential to my point.  I should have put a wink after my first sentence.  My point is that there is a continuum of what people are willing to pay for convenience.  If two stores are  similarly convenient (eg. Walmart and Target), what advantage does the more expensive one have when there is a slightly more expensive one that is even more convenient?  I just see that Target is more risky in the long term over Walmart - I think Walmart is better positioned to weather the storm - which is why you see Target doing all of these online promotions for basics (it seems every week there is a slickdeals front page ad for soap or toilet paper or whatever at Target by ordering online).


Then again, I live in the land of Target koolaid, so I may just be a contrarian.

Nah, I got the implied wink. And your overall reasoning seems sounds - I haven't given the investment considerations much thought either way. I do think that at least in LA, Target is perceived as slightly less downmarket than Walmart. People in my professional/neighborhood circles will make a bit of a joke of it by ironically giving "Target" the fake French pronunciation, but they nevertheless happily shop there whereas many of them think Walmart is where the rural poor in flyover country shop. There's a very busy hipster-filled Target in heart of Hollywood/West Hollywood; I can't imagine a Walmart there.

None of which is to take issue with your investment analysis, but I do think Target has done a good job of creating a brand identify that distinguishes itself from Walmart, at least among certain populations.

 

[guyver00]

Yup, you're describing loss aversion.

 

[otc]

I've done fairly little shopping at walmart (all we have near me are "Walmart Express" which are basically just small grocery stores), but my experience shows the quality is lower at walmart by far.

So many walmart goods are either house-branded or made to spec for them at a low price point (I think this is also where a lot of the hate comes from...people blaming them for destroying once-great brands by forcing them to drop quality). Other than some walmart-only Tramontina cookware which has done well, everything I have bought from walmart has failed in some way. There's the duffle bag whose straps decided to catastrophically fail when I stepped off a curb...or the fleece sleeping bag whose elastic retaining straps rapidly disintegrated and then fell off. I could come up with more examples...just seems like a lot of their stuff is ****. And for stuff that they can't take down-market, like video game discs or consoles, it seems like their pricing is just on par with everyone else.

Target has always seemed to me like they sell the same sort of goods I would buy elsewhere at a decent price. They don't strive to make everything literally as cheap as possible, and I get a product that actually lasts. Also around here, they tend to have a pretty dang good beer selection at decent prices. Walmart is all about cases of macro brews...
Target's in-house product lines can actually be pretty decent. Some of their clothing basics are quite well made, and their bath towels are The SweetHome's runner up pick (and cost under half the money of the "best" pick). In-house groceries are all excellent...but I can't comment on the quality of Walmart generics, so that might be a moot point.

 

[Master-Classter]

WMT stock had a nice pickup today. I'm nearly at breakeven. I think I'll wait to make a few % and sell and move on. Not sticking around long term. I'm sure it'll do fine but I want to trade and was hoping this was oversold and would take a few days or a week to come up a few % and I'd just flip it. Instead I'm holding and I don't want to.

 

[brokencycle]

I've done fairly little shopping at walmart (all we have near me are "Walmart Express" which are basically just small grocery stores), but my experience shows the quality is lower at walmart by far.

So many walmart goods are either house-branded or made to spec for them at a low price point (I think this is also where a lot of the hate comes from...people blaming them for destroying once-great brands by forcing them to drop quality). Other than some walmart-only Tramontina cookware which has done well, everything I have bought from walmart has failed in some way. There's the duffle bag whose straps decided to catastrophically fail when I stepped off a curb...or the fleece sleeping bag whose elastic retaining straps rapidly disintegrated and then fell off. I could come up with more examples...just seems like a lot of their stuff is ****. And for stuff that they can't take down-market, like video game discs or consoles, it seems like their pricing is just on par with everyone else.

Target has always seemed to me like they sell the same sort of goods I would buy elsewhere at a decent price. They don't strive to make everything literally as cheap as possible, and I get a product that actually lasts. Also around here, they tend to have a pretty dang good beer selection at decent prices. Walmart is all about cases of macro brews...
Target's in-house product lines can actually be pretty decent. Some of their clothing basics are quite well made, and their bath towels are The SweetHome's runner up pick (and cost under half the money of the "best" pick). In-house groceries are all excellent...but I can't comment on the quality of Walmart generics, so that might be a moot point.

I agree with almost everything you and LD are saying. I just wouldn't invest in Target because I think there are better retailers out there.

I don't like shopping at Target because I hate the parking at the one by me. I'm a very angry driver, who can't stand ****** MN drivers, especially middle-class moms driving their giant SUVs they can't park worth ****.

 

[SkinnyGoomba]

I avoid big box as much as possible. They've driven more 'semi-local' like proprietor run Ace Hardware type stores to do much better on pricing and offer a higher quality selection in order to capture a better audience. I patronize these places before big box, the experience is much better. I bought some paint recently to paint my bathroom, 5 gal in total....so not a whole lot....and the proprietor was incredibly helpful having everything prepped and waiting for me, helped find all the odds and ends I needed for the project.

My father loves big box stores, which baffles me but I digress, his experiences are usually; you call to order, they order incorrectly. When you arrive they have no idea what the hell is going on, you wait...ect ect.

When it comes to groceries/booze for me it is; Whole Foods, Wegmans, local guys.

Maybe it's best that I missed out on wally-world, I kind of hate them anyways.